Labour unveils 'bold' tax plan

Labour leader Phil Goff at the party's tax policy launch at Westpac Stadium in Wellington today. Photo / Mark Mitchell

Labour has confirmed it will go into the election this year with a policy to introduce a 15 per cent tax on capital gains and to reintroduce a top tax rate of 39c in the dollar for income over $150,000 a year.

Mr Goff said the package was "a bold plan to stop our valuable assets being flogged off overseas, give hard working Kiwis a tax break, pay off the country's ballooning debt and grow our economy".

He said under National, New Zealand was "drifting without a plan" with debt out of control, a poorLY performing economy, and record numbers of New Zealanders leaving the country for good.

"We are fighting for the future of the country, it's that simple. It's time to show courage and take action."

Labour estimates its capital gains tax which excludes the family home will raise $78 million in the first year, rising to $2.27 billion after ten years and would raise $26 billion over its first 15 years.

The new top rate - which Labour says would affect two per cent of salary and wage earners - would raise about $300 million a year.

More than half the revenue raised from the new taxes would be used to fund Labour's already announced policies to introduce a $5000 tax free threshold and to remove GST from fresh fruit and vegetables.

"These changes won't be easy and some people won't like them. But it's the right thing to do", said Mr Goff.

Pitching Labour's policy as an alternative to National's policy to partially sell off state owned assets, Mr Goff said the asset sales plan amounted to "putting our heritage up for sale" or "like selling the house to pay off the mortgage".

"They and all the people who get to clip the ticket each time one of our assets gets sold, want you to think there is no alternative."

Labour's plan on the other hand was "a game changer that creates greater fairness, a plan whose time has come".

Labour's Tax Package:

# A capital gains tax at 15 per cent

# Will exempt the family home

# Won't apply to properties in quake hit Canterbury for five years

# Will apply to farms but not the farmhouse and section

# Will apply to shares for those who trade them "on an occasional basis". (Professional share traders already pay tax.)

# A special concession for older long term owners of small businesses with the first $250,000 of gains from selling their business exempt

# Won't apply to "personal property" such a art, books and jewellery

# Expected to affect less than 10 per cent of New Zealanders