Election 2020: Labour's closest political ally, the Greens, is not happy with the tax policy

Labour's closest political allies, the Greens, are frustrated at the party's new tax policy, saying it's just "tinkering" which won't fix the systemic problems in New Zealand.

And National is not happy either – it has accused Labour of trying to tax New Zealand out of a recession.

In fact, its finance spokesman Paul Goldsmith said that this was "just the beginning" and Labour would "eventually widen the net and come after middle-income earners".

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But, speaking to media this afternoon, Labour leader Jacinda Ardern dismissed that as "misinformation".

Both she and her finance spokesman Grant Robertson said today's announcement was Labour's full tax policy.

"This is the totality of our tax policy," she said, ruling out any other new taxes.

This morning, Robertson promised that if Labour was re-elected, it would install a new 39 per cent top tax rate, which would capture 2 per cent of all New Zealand taxpayers.

It would raise $550 million, which would be spent on education, health and Covid-19 debt repayment.

But the tax policy was quickly criticised by the Greens, which was the first political party to respond to Labour's policy.

Although co-leader James Shaw said a higher top tax rate was "long overdue" it was simply not enough.

"It is tinkering that won't address the long-term challenges facing Aotearoa."

The party wants New Zealand's richest to be taxed much, much more.

"The Greens believe we should ask those who are benefiting the most to chip in a bit of what they've gained to help the people who need support during this crisis."

While Labour's policy would raise $550 million, the Greens say their tax policy would raise just under $8 billion by setting two new tax brackets – 36 per cent on those earning more than $100,000 a year and 42 per cent on those on $150,000.

But that plan, however, will probably never be Government policy as Robertson said this was Labour's final tax plan.

It appeared he was not open to it changing substantially in any post-election coalition negations.

The Greens would be Labour's most likely choice for a coalition partner – it has provided supply and confidence to the Labour/NZ First Government during this term.

Act called Labour's tax plan "divisive populism" which would raise little revenue for the Government.

He said the $550 million the tax would raise would not even begin to "repair the fiscal damage Labour has done".