Labour has revealed its plan for a targeted capital gains tax, explaining the money would be funnelled back into the health sector and give Kiwis three free doctors’ visits a year.
The plan involves setting up a Medicard for all Kiwis, which would be handed out at birth or upon gaining residency or citizenship.
Leader Chris Hipkins said the tax would only be applied to the sale of a commercial property or residential property.
This would exclude the family home, KiwiSaver, shares, business assets, inheritances and personal items.
Hipkins said nine out of 10 New Zealanders won’t pay tax on the property they own, and everyone will get three free visits a year to the doctor.
“Right now, our tax system rewards property speculation instead of the people creating jobs and growing the economy. We will change that,” Hipkins said.
“Our simple, targeted tax changes will make sure those profiting from property pay their fair share, levelling the playing field for Kiwi businesses and innovation.
“Every dollar raised will go straight into the health system, including funding three free doctor’s visits a year for everyone with a new Medicard. This will save New Zealanders money every year.”
He said the tax would only apply to gains made after July 2027.
Labour health spokesperson Ayesha Verrall said no one should have to choose between seeing a doctor and putting food on the table.
“One in six New Zealanders cannot afford to visit their doctor when they are sick. Some doctors’ fees are heading towards $100 a visit,” Verrall said.
“That hasn’t happened by accident. It is a direct result of Christopher Luxon’s cuts to healthcare and tax breaks for tobacco companies and property speculators.
“Our plan means that every New Zealander will get a new Medicard that they can use to access three free doctor’s visits each year at their enrolled practice.
“This election is make-or-break for our health system. Under a Labour Government, all someone will need to see their doctor is a Medicard, not their credit card.”
The card would also streamline health information by holding information to identify you at health services and track your entitlements and usage.
It would be available via an app and integrated with GP and community health systems. It would also be integrated for non-digital users.
Infometric’s Brad Olsen told Newstalk ZB’s Ryan Bridge he wondered why Labour did not go broader with the scheme.
“Looking at the likes of the housing market and similar at the moment, there’s not a huge amount of gains happening in there.
“So, the ability to produce revenue is a lot different from when we had the capital gains tax a while ago.
“If it’s not wide and broad-based, it does sort of beg the question why we’re bothering with something so specific.”
Olsen said there were no costings outlined in the plan released by Labour today, and he did not have enough time to truly assess what the expectations for those are.
“I think given the limitations and given how narrow a capital gains tax expansion is being talked about here, I wouldn’t expect it to be a huge money spinner, but again, it’s sort of hard to evaluate given there’s just no details that I can see.”
He said we all needed to “hold our breaths” before jumping to conclusions about what this might mean for Kiwis, explaining it’s likely only to apply to gains after July 2027.
“So, I think we do have to hold our breath a little bit on that because people often say, well, I bought something 30 years ago and now it’s going to get taxed till all kingdom come. No, that’s not actually the case.
“But, there is a question over how people might spend their money or invest in the future.”