Labour leader Chris Hipkins is seeking to hose down speculation the Green Party will demand changes to his tax policy in any future coalition negotiations, claiming he is not a “complete pushover like Christopher Luxon”.
It follows Green Party co-leader Chlöe Swarbrick describing Labour’s capital gains tax (CGT) proposal as a “starting point” as she calls for her party’s wealth tax to be adopted.
Hipkins on Tuesday announced his party would introduce a 28% tax on profits made after the sale of commercial or residential property, excluding the family home.
Labour’s policy, which would come into force from July 1, 2027, would also not apply to farms, KiwiSaver, shares, business assets, inheritances and personal items such as cars, boats, art and furniture.
The tax was projected to attract about $700 million on average per year, which would be ringfenced for health spending, specifically on funding three free GP visits for every New Zealander.
In a statement yesterday, Swarbrick described the policy as “watered-down”.
“Right now, the wealthiest pay half the effective tax rate of our nurses, teachers and firefighters. Labour’s announcement doesn’t even try to fix that.
“In a year, the richest family in this country can make more money in their sleep, without lifting a finger, than Labour’s proposed CGT would generate.”
In its alternative budget announced in May, the Green Party proposed implementing a 2.5% wealth tax on net assets, such as property and shares, over an individual threshold of $2m (or $4m for couples).
The party expected to raise $72.4 billion over four years, which the party said would be put towards free healthcare, dental care, early childhood education and environmental protection.
Te Pāti Māori also supports a wealth tax. Current polling suggests Labour would need both the Green Party and Te Pāti Māori to form a Government.
Labour has consistently stated it would have ownership over fiscal policy and hold the finance portfolio if it were the largest party in any future governing arrangement.
Labour MP Ginny Andersen, speaking this morning on Newstalk ZB, confirmed there would be no changes to the party’s tax policy during any coalition negotiations, saying it was a bottom line.
“We’ve been very clear on that, Barbara Edmonds will be the Minister of Finance, and it is this model that we will be implementing.”
Speaking to reporters at Parliament, Swarbrick warned there was a “long time to go before the election”.
“I know that a lot of politicians are trying to say that certain things are off the table or not.
“I think that if New Zealanders want functional public services in this country, they want to fix our hospitals and our schools and our crumbling infrastructure, then we need to face the music, we need to face the reality that that’s going to take serious investment.”
Asked whether her party would ever accept Labour’s tax policy in its current form, Swarbrick described it as a “starting point”.
“A bottom line tends to mean that that’s the starting point, and we’d like to go a lot further.”
Responding to Swarbrick’s comments, Hipkins stated any “deviation” from his party’s policy would require a “mandate from New Zealanders”, meaning Labour’s support would likely have to drop below the Greens.
“This is the policy that we are campaigning on and this is the policy that we will implement if we form government after the next election.”
After the 2023 election, coalition negotiations between National and New Zealand First led to the former, which had the greatest vote share, abandoning its policy allowing foreigners to buy homes worth more than $2m while charging a 15% tax.
NZ First eventually relented in September when, after much debate, the Government announced it would allow holders of the Active Investor Plus visa to buy or build one home worth at least $5m.
Hipkins rejected any suggestion his assurances were undermined by the trade-offs made during the 2023 negotiations.
“I’m not a complete pushover like Christopher Luxon, I don’t think the smaller parties should call all the shots.
“I have made it very clear that our tax policy is as far as we go.”
Adam Pearse is the deputy political editor and part of the NZ Herald’s press gallery team based at Parliament in Wellington. He has worked for NZME since 2018, reporting for the Northern Advocate in Whangārei and the Herald in Auckland.