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Home / New Zealand

Wealth tax: Labour must adopt bold policies to be relevant to voters again - Shane Te Pou

Shane Te Pou
By Shane Te Pou
NZ Herald·
23 Nov, 2024 04:00 PM5 mins to read

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Labour leader Chris Hipkins killed off discussion about a wealth or capital gains tax while in government in 2023. Photo / Mark Mitchell

Labour leader Chris Hipkins killed off discussion about a wealth or capital gains tax while in government in 2023. Photo / Mark Mitchell

Shane Te Pou
Opinion by Shane Te Pou
Shane Te Pou (Ngāi Tūhoe) is a commentator, blogger and former Labour Party activist.
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THREE KEY FACTS

  • The previous Labour Government was considering a wealth tax or capital gains tax in Budget 2023 but leader Chris Hipkins said he killed the idea.
  • Hipkins now says the country can’t rely on existing taxes on wage earners and GST to fund the country’s growing population.
  • Well-off New Zealanders pay less tax than peers in nine OECD nations, a Victoria University study shows.

Shane Te Pou (Ngāi Tūhoe) is a commentator, blogger and former Labour Party activist.

OPINION

I’ve been to more than 20 Labour Party annual conferences. There was a time I wouldn’t miss one for quids.

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It’s been several years since I’ve been inspired to go to one – but I wish I was going this year. With Labour at a crossroads, I reckon next week’s meet-up in Christchurch might be one of the most important since the frenzied conferences of the 1980s.

Recent elections around the world have shown that voters want more than just minor tweaks to the system – they’re yearning for real change.

The left’s failure to offer it risks a steep decline in relevance, and voters turning to the far-right.

If Labour doesn’t adopt a bold, meaningful policy agenda it risks heading down the same path as the Democrats in the United States, where Kamala Harris’ failed campaign neglected to provide genuine hope and a clear vision for the future.

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Let’s face it: inequality in New Zealand is glaring.

While a small, privileged elite (myself included) enjoys an ever-growing wealth, a large chunk of the population is left behind.

This isn’t just perception, it’s fact. The wealthiest 10% of households own nearly 60% of the nation’s assets, while the bottom half barely scrapes together 5%.

For too many people it feels like the system is rigged against them. Their wages aren’t keeping up with the cost of living, housing remains out of reach, and they’re working harder for less.

It’s not surprising that disillusionment is growing.

Without policies that tackle these issues head-on, Labour risks losing its base, just as Harris did.

Harris had a chance to inspire people, to give them hope for a better future. Instead, she focused too much on painting Donald Trump as a bogeyman, relying on fear of his return rather than offering a bold vision for change.

'Kamala Harris’ failed campaign neglected to provide genuine hope and a clear vision for the future.' Photo / AFP
'Kamala Harris’ failed campaign neglected to provide genuine hope and a clear vision for the future.' Photo / AFP

While Trump managed to appeal to struggling middle-class voters with his promise to “Make America Great Again”, Harris offered little in the way of economic hope. Many people in swing states like Pennsylvania - once home to good jobs and a thriving middle class - felt ignored by the Democrats.

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The result? She lost the centre and failed to energise her base. Many voters simply stayed home, just like Labour supporters did at our last election.

Labour should learn from this. If it keeps tinkering around the edges without addressing the deep inequalities that define New Zealand’s economy, it will face the same fate as the Democrats.

Some argue Labour should move closer to the centre to win over voters. ‘Third-wayism’ might have worked 20 years ago, but not now. Time and again, we’ve seen that when a party offers voters a choice between a watered-down version of conservatism and the real thing, they choose the latter.

Labour’s best chance of success lies in offering a bold, progressive vision - one that speaks to the struggles of ordinary Kiwis and offers a credible path to a better future.

Labour needs to make sure people in South and West Auckland know it has their backs. These voters are looking for real solutions, not just a softer version of neoliberalism.

Labour needs to reconnect with the values that made it a force for change in the first place: fairness, opportunity, and solidarity.

One policy that could restore hope and demonstrate Labour’s commitment to fairness is using a wealth tax to fix our health crisis.

This is not about punishing success, but ensuring that those who have benefitted most from the system contribute their fair share to society. A small annual tax on assets over $10 million would only affect the ultra-wealthy, leaving ordinary Kiwis untouched.

Healthcare and other public services are in crisis and voters know we need more government spending to improve them.

Countries such as Norway and Switzerland have used wealth taxes to reduce inequality and fund public services without driving away investment or innovation. New Zealand could do the same.

A wealth tax is not radical - it’s pragmatic.

Labour can show it will fix the structural problems in the economy, not just manage them.

Sticking to technocratic, incremental policies sends a message that Labour doesn’t understand - or worse, doesn’t care about - the struggles of ordinary people.

A wealth tax could help close the gap between haves and have-nots and offer tangible benefits to the middle and working classes.

But more than that, it could give people hope - hope that the government is on their side, that the future can be better, and that change is possible.

Without that hope, voters will either turn to the right, with its promises of tax cuts and dismantling institutions, or stay home altogether.

The 2023 election should be a wake-up call.

If the party doesn’t act now, it risks repeating the Democrats’ mistakes and alienating the very people it was created to represent.

If Labour continues to avoid bold policies like a wealth tax, it will lose not just the swing voters in the centre but also its own core supporters.

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