Election 2020: Greens demand wealth tax if they are in coalition

A fracture has been riven into the Greens-Labour Party relationship after the Greens demanded a wealth tax be part of any future coalition government agreement.

The Greens' election policies include a plan to make Kiwis with a net worth greater than $1 million, annually pay 1 per cent of their wealth above $1m to the Government as a tax.

Those worth more than $2m would annually pay out 2 per cent of their wealth above $2m as tax.

Greens MP Julie Anne Genter yesterday told a Newstalk ZB small business panel discussion the tax policy was a "bottom line" condition that must be met for her party to join into a second coalition government with Labour.

However, Labour's Revenue Minister Stuart Nash quickly rejected the idea, saying Labour would not be introducing a wealth tax. "[A wealth tax was] off the table," he said.

The contradictory positions have thrown added uncertainty over the election, with tax policy a key weapon wielded by Opposition parties.

Labour's Revenue Minister Stuart Nash. Photo / George Novak

Should Labour be unable to win enough votes to govern alone, yesterday's comments raise the prospect that either Labour or the Greens would need to compromise on their stated positions in order to form a government.

NZ First MP Fletcher Tabuteau said Genter's comments showed why the prospect of Labour and the Greens governing by themselves — without the checks and balances provided by NZ First — was "frightening".

"We've proven ourselves in this last Government, we've achieved an immense amount of work, and what we're saying is we've stopped some nonsensical rubbish as well," he said.

"And this wealth tax is an example of that. And we've made that clear. No new taxes."

National MP Andrew Bayly called the Greens' policy absurd. "The big issue for New Zealanders, if in fact [the Greens] are around the negotiating table, is that [the Greens] do want to push policy like this, and that is the most dangerous thing," he said.

Simon Court from the Act Party said the comments showed what was in store for voters if they voted for either Labour or the Greens.

"What we're hearing from the Labour and the Greens Party is that your money is actually their money," he said.

Genter defended the wealth tax, saying it would only affect the wealthiest 6 per cent of Kiwis.

"Any sensible economist knows that we cannot carry on with the status quo. There is a tiny percentage of New Zealanders that would be affected by this tax — they are the top 6 per cent wealthiest New Zealanders.

Greens MP Julie Anne Genter. Photo / Mark Mitchell

"It's not an individual who owns a $2m house and has a $1.5m mortgage. Tax reform has to be a bottom line, this country is not going to be better off if we continue to allow the wealthiest people and the wealthiest New Zealanders to accumulate more and more wealth."

The wealth tax would work by levying 1 cent in the dollar on "net assets worth over $1 million" and 2c in the dollar for net assets over $2 million.

The new tax would only apply to the value above those thresholds and would discount the value of, for example, mortgages held by landlords owning a suite of rental properties.

Household goods, including cars, that were worth less than $50,000 would be exempt from the calculation.

However, Nash said Finance Minister Grant Robertson had ruled out imposing any wealth tax.

"As the Revenue Minister, I have had a look at a wealth tax and I think it is very, very difficult to implement," he said. "It's on unrealised gains, which make it very difficult for people to pay who are asset rich, cashflow poor."

The debate came as part of the Small Business General Election Discussion organised by MYOB to provide small and medium businesses the opportunity to hear from key representatives of each major political party on how they plan to help them recover from the pain caused by Covid-19.

Meanwhile, the political heat has ratcheted up another gear after political pundits analysed the first debate between Labour leader Jacinda Ardern and National leader Judith Collins.

After performing strongly in Tuesday's debate, Collins yesterday got on the front foot again by calling Ardern "a poor wee thing".

It came after Ardern emerged from the debate saying politics "was not a blood sport".

Collins, meanwhile, was in high spirits, declaring herself the winner as she campaigned in Matamata yesterday.

However, on polling numbers, Labour could govern alone after the October 17 election on the 1News/Colmar Brunton results.