Labour to campaign on tax reform

Written By: - Date published: 6:15 am, March 10th, 2025 - 57 comments
Categories: chris hipkins, labour, tax - Tags:

1News:

The party leader told Q+A that Labour would be announcing its tax policy later this year, ahead of the 2026 election.

He said too much investment was going into property rather than “productive businesses that create jobs”.

“We’ve got to rejig the tax system so that the burden of taxation is more evenly spread,” he said.

When asked directly if the party would be campaigning on a capital gains tax, Hipkins said: “We’ll campaign on tax reform… now, the exact nature of that, it’s not just a simple issue of this one tax or that one tax.”

…

“Whatever you decide on tax — and this is the reason why I’m not answering it today — has to fit within a broader economic plan that includes where that money goes.”

57 comments on “Labour to campaign on tax reform ”

  1. Sanctuary 1
    10 March 2025 at 6:59 am

    Hopefully the secret sauce will be first 10k tax free and a CGT.

    Reply
    • gsays 1.1
      10 March 2025 at 7:08 am

      I would vote for that.

      Plus some kind of reform around banks and the huge amount of profit they export every year.

      Reply
    • Kay 1.2
      10 March 2025 at 8:48 am

      I can safely predict that if a first 10K tax free come to fruition, beneficiaries will not benefit from that. Even though benefits are taxed, the system is rigged so that any tax cuts (or increases) don't affect the rates. And I can also safely predict that the clawbacks will still happen for anyone able to work part-time.

      We're a massive voting bloc, those who still vote. About 300,000 and we could swing any election. Labour has given us no reason to vote for them for years, and have shown no interest. Implement the welfare working group recommendations, and

      here might be a reason for us to vote again.

      Reply
      • Sanctuary 1.2.1
        10 March 2025 at 9:43 am

        Not much point arguing over the details of a policy that probably doesn't even exist.

        Reply
        • Phillip ure 1.2.1.1
          10 March 2025 at 10:57 am

          Hard to argue with that historical assessment tho'…eh..?

          Labour set up the welfare reform group…made up of eminently qualified individuals…and they made a set of recommendations…that would have done much to cure the poverty that ails us..

          And they did diddly-squat…

          They had the formula to fix child/adult poverty in their hands…in the form of the recommendations from that group…

          And they choked..or something…I still haven't heard a rational explanation for that inaction..

          And then these even more uncaring/heartless bastards got in..and emptied the emergency housing users..onto the street…

          Which brings us to where we are now…in a bloody mess…to put it bluntly..

          So..labour…we don't need no aspirational words..that just fly away into the ether..

          You have quite a bit to prove in this area.. don't you..?

          We need clear policy blueprints…

          ..what you are going to do to fix what ails us…and how you are going to get us there..

          Over to you now..

          ..eh..?

          Reply
    • mikesh 1.3
      10 March 2025 at 11:34 am

      Hipkins hinted that whether or not to introduce a CGT could depend on what they do with deductibility of interest. They could allow deductibility but make deducted interest subject to a claw back, similar to what we used to have with depreciation, if and when the the property was sold. They might well get more tax from such a claw back than they would get from a CGT; and in the meantime deductibility would help with the landlord's cah flow and keep rents lower.

      Reply
    • SPC 1.4
      10 March 2025 at 11:01 pm

      The CGT would not raise the revenue to cover the cost of such a threshold – which is near $4B pa.

      And the CGT revenue would take years to get to a full value level.

      Our budget situation does not allow such a policy.

      https://www.stuff.co.nz/business/money/300926510/heres-how-much-the-govts-abandoned-taxfree-threshold-would-have-given-you

      Reply
  2. thinker 2
    10 March 2025 at 7:44 am

    No wealth tax please.

    It would encourage NZ wealthy to take their money offshore, hurting the economy here.

    And, as someone preparing for retirement, it's a slap on the face to have lived a frugal life so I'll be prepared for later, then called "too wealthy" and have my savings taken away by tax.

    Reply
    • mikesh 2.1
      10 March 2025 at 11:18 am

      A wealth tax would almost certainly cut in at a very high threshold, so high that one would scarcely notice the tax’s effect.

      Reply
      • mikesh 2.1.1
        10 March 2025 at 11:41 am

        A capital gains tax could catch landlords who are not particularly wealthy; one cannot say the same of a wealth tax.

        Reply
        • Incognito 2.1.1.1
          10 March 2025 at 6:47 pm

          The few landlords are relatively wealthy compared to many more other New Zealanders. If they don’t make a capital gain, they don’t have to pay a CGT.

          Reply
          • mikesh 2.1.1.1.1
            11 March 2025 at 11:30 pm

            The few landlords are relatively wealthy compared to many more other New Zealanders.

            Not if they have an oustanding mortgage.

            Reply
            • Incognito 2.1.1.1.1.1
              12 March 2025 at 9:11 am

              Incorrect; only correct if the mortgage is underwater and they would still have higher income streams than non-landlord fellow New Zealanders.

              Reply
              • mikesh …
                12 March 2025 at 1:37 pm

                The issue is not whether their income streams exceed those of non-landlord NZers (obviously this would be the case), but whether their net wealth meets a set threshold.

                Reply
                • Incognito …
                  12 March 2025 at 2:09 pm

                  I have no idea what threshold, set or otherwise, you’re talking about.

                  You have not and cannot mount a decent argument against my thesis. You have also failed to address my second thesis (cf. CGT). Both my theses were in direct opposition of your assertions.

                  You’re wasting my time with non-sticking objections and this non-debate with you is as fruitless as so many others here in the past.

                  Reply
                  • mikesh …
                    16 March 2025 at 3:42 pm

                    I have no idea what threshold, set or otherwise, you’re talking about.

                    Only those whose wealth exceeded a certain amount – termed a "threshold" – would be subject to a wealth tax. The actual amount, it may be $1m dollars, it may be $2m, the actual amount would have to be decided. Capital gain, whether realised or not, would form part of a taxpayer's wealth, so in taxing capital gain one is taxing wealth very selectively; and in addition you may well be taxing a taxpayer whose total wealth, including capital gain, does not meet the threshold.

                    Reply
                    • Incognito …
                      16 March 2025 at 3:57 pm

                      I see, you moved the goalposts from what constitutes wealthy to a threshold for wealth tax.

                      No wonder that we’re wasting time here.

                    • mikesh …
                      16 March 2025 at 5:23 pm

                      I didn't "change the goalposts". Surely you must be aware that any wealth tax would be subject the taxpayer's wealth meeting a certain threshold before it became (wealth) taxable. That was the case when we had a land tax prior to 1990, land being a form of wealth.

                    • Incognito []
                      16 March 2025 at 5:34 pm

                      I wasn’t commenting on a WT tax @ https://thestandard.org.nz/labour-to-campaign-on-tax-reform/#comment-2028128.

                      The few landlords are relatively wealthy compared to many more other New Zealanders.

                      You moved the goalposts and you’re still denying it and still wasting more time – knowing you, you won’t stop, ever.

                    • mikesh …
                      16 March 2025 at 10:47 pm

                      I guess I will never get through to you. There are none so blind as those that will not see.

    • Descendant Of Smith 2.2
      10 March 2025 at 1:38 pm

      The wealthy having capital hasn't helped our economy. If it did we wouldn't need foreign investment. Lets face it they are accumulating and hoarding their wealth and investing in property which pushes up rentals.

      They betray NZ by allowing foreign companies to buy up NZ companies and export profits offshore. They betray NZ workers by taking more and more of their income in rent.

      We likely wouldn't even notice them go.

      Reply
    • Bearded Git 2.3
      10 March 2025 at 10:32 pm

      The Green's WT (in their last manifesto) cuts in at $2m for a couple from memory. Also from memory I think it only effects the top 5%. (The manifesto is available online)

      So no problem there Thinker.

      Reply
  3. thinker 3
    10 March 2025 at 7:47 am

    A currency speculation tax, however small, would help a lot, as I recall.

    Reply
  4. Kay 4
    10 March 2025 at 7:51 am

    As long as Labour panders to the middle class home owners, they will be too cowardly to introduce a CGT. I would be delighted to be proved wrong of course…

    Reply
    • Graeme 4.1
      10 March 2025 at 8:09 am

      Labour had a CGT with the extended Bright Line Test. That got the worst of the property speculation.

      Changes around private property holding could be an avenue, any more than one residential property and it has to be in a company, so taxable, might be easier to progress.

      Reply
      • Ad 4.1.1
        10 March 2025 at 8:48 am

        Exactly.

        A Bright Line Test with 10 year limit captures any New Zealander with their assets (outside a 2% class).

        National did the most powerful thing they could do last election by promising and delivering a tax cut.

        Not a tax increase.

        Reply
      • weka 4.1.2
        10 March 2025 at 10:06 am

        Labour had a CGT with the extended Bright Line Test. That got the worst of the property speculation.

        Worst is relative. If the remaining property speculation does damage, it does damage. And it has.

        Reply
        • Craig H 4.1.2.1
          10 March 2025 at 11:02 am

          CGTs don't stop property speculation unfortunately – if it makes money, people will do it.

          Reply
          • weka 4.1.2.1.1
            10 March 2025 at 11:05 am

            Yeah, I'm not a particular fan of CGTs, at least not without mass building of houses that stay permanently out of the property market. Social housing from central and local government, Iwi, and NGOs. New and alternative models that just step out of the property boom altogether. Long term security in housing instead.

            Reply
        • Bearded Git 4.1.2.2
          11 March 2025 at 1:26 am

          My comment above was meant for you Ad.

          Reply
    • weka 4.2
      10 March 2025 at 10:05 am

      Labour are middle class home owners 😉

      It's an issue of policy design, but sustained public conversation and PR. The last Labour government took a position of imposing unpopular and complex, not well understood changes on the electorate, I really hope they don't do that again. They've got a year to engage the public, rather than working away in secret and then bringing out a plan in the election campaign that the right and MSM slam them with.

      Reply
  5. Kay 5
    10 March 2025 at 8:41 am

    Graeme @4.1- reply as new comment because this site keeps freezing and won't let me post replies

    That is true, and anything that dulls down property speculation will always be welcome. But there is still this ongoing problem of CGT- on everything eligible, not just housing- will be fought tooth and nail by the people (read: voters) who are extremely noisy and have this habit of spooking politicians.

    Reply
    • Graeme 5.1
      10 March 2025 at 1:00 pm

      Tax policy needs to redirect investment away from residential property and into things that actually grow the economy. That implies that any CGT needs to be selective of the sectors it targets, rather than a comprehensive tax that discourages all investment

      Reply
  6. Sanctuary 6
    10 March 2025 at 9:57 am

    If Sanctuary was king for a day:

    1 – A CGT applying to all assets with no brightline test ON ALL TRANSACTIONS AFTER JULY 1 2026.

    2 – A tax free income threshold of 15k. That would be an immediate $50 a fortnight extra in the pocket for everyone.

    3 – Higher income tax rate for those with high incomes: a 50% tax rate on income over $180,000.

    4 – 2% annual tax on net wealth over two million dollars (three million in Auckland) that would be based on net after debts subtracted. eg, an annual $20,000 on three million net wealth.

    5- A wealth transfer tax.

    Reply
    • weka 6.1
      10 March 2025 at 10:08 am

      what CGT rate? What transactions? Property? Or anything?

      Reply
    • Michael Scott 6.2
      10 March 2025 at 10:16 am

      No NZ political party will support a CGT on the family home.

      We can't have substantially higher taxes in NZ than Australia.

      And as I have said before wealth taxes simply don't work.

      Reply
    • Phillip ure 6.3
      10 March 2025 at 11:17 am

      Why not a financial transaction tax..?

      Some form of tax break for those able to afford to forego their superannuation..?..(a gesture..?..to show appreciation..?)

      Why not environmental taxes…on those who pollute the most..(let this be a stick to drive change..)

      Tax breaks/incentives to support conversion to green energies..

      I am against things like a sugar tax…as regulations on the maximum amount of sugar allowed in any manufactured product…is the only way to effectively tackle that problem..

      And of course..the obvious one..legalise/tax to bits… cannabis..

      Reply
      • Descendant Of Smith 6.3.1
        10 March 2025 at 12:15 pm

        Tax cuts help those on Super but not those on benefit. Make benefits non-taxable again and increase their value as per WEAG recommendations.

        Tax breaks for people with non-working partners – such as my parents had.

        Universal family benefit to replace the plethora of assistance for children that exists now.

        Stamp duty and death duties and higher tax rates for those earning more than $200,000 per year. Stamp duty and death duties so much simpler than CGT's or wealth taxes.

        Turnover taxes for business another option.

        Reply
  7. Psycho Milt 7
    10 March 2025 at 9:57 am

    Better late than never, but Labour in opposition often has the bollocks to propose obvious things that need doing, then turns out not to have the bollocks to actually do them once it's in government, so I'll take this with a grain of salt.

    Reply
  8. Michael Scott 8
    10 March 2025 at 10:08 am

    Ad is right that it is tax cuts that are attractive to voters and not tax increases.

    But a CGT should be a no brainer for NZ. They can't be to hard to administrate as almost all other developed countries have them. As the Canadian campaign said "A buck is a buck " however it is earned.

    I was surprised when Jacinda so completely rejected the introduction of a CGT – going against the strong recommendation of her Tax Working Group.

    The only reason I could envisage was that it was not worth the fight because it would raise so little money ( estimated 400m in the 1st year.) And the fact that we already have a lot of de facto taxes on capital gains. Property speculators and developers and those with shares in overseas companies already pay CGT.

    One reason a CGT raises so little money in its first 5 years is that it is not retrospective and so only taxes gains on assets from the date of its introduction.

    Reply
    • Craig H 8.1
      10 March 2025 at 11:05 am

      An issue with CGTs is that as the government becomes reliant on the income, they become reliant on property values increasing to raise revenue.

      Reply
    • SPC 8.2
      10 March 2025 at 11:19 pm

      TAX 101.

      1.Our budget circumstance is not good.

      2.A CGT takes time to generate much revenue – unless one makes it retrospective to original cost.

      3.we want to encourage more investment in new build or the productive sector of the local economy.

      Property speculators and developers and those with shares in overseas companies already pay CGT.

      With bright-line back to 10 years (National is allowing a sell down for CG without tax 2016-2026, but Labour can still get the 2019-2029 era CG taxed if they win in 2026).

      It's either retrospectivity, or an alternative, if revenue to enable government sustainability with responsible budgets is the objective.

      Reply
  9. weka 9
    10 March 2025 at 11:06 am

    does anyone have a link to Labour's tax project from their previous term?

    Reply
  10. observer 10
    10 March 2025 at 1:41 pm

    Labour must sell a tax cut.

    There are several options (e.g. a cut in GST, reversing Key's increase, or as others have suggested, income tax at the bottom). And/or they could offer a radical indirect saving, like free dental care (see the Greens 2023).

    But the worst option is to make the only headline "New Tax!", along with promises to spend that money smarter. No political gain in vagueness.

    National understand the Big Con: they know the media will lap up the headline "Tax Cut!", and get everyone calculating their extra cash in pocket, while the Right quietly increase fees, levies, charges, rates, tolls … all those other synonyms for taxes, which don't make the big headline. And of course claw back that "tax cut", for most.

    So please Labour, choose a big hit for the people, and make that your headline. (I have no confidence that incremental Labour will do this, but I so want to be wrong).

    Reply
    • SPC 10.1
      10 March 2025 at 10:50 pm

      NACT believe in the your money tax cut because they believe in the deliberate under funding of government and reducing the legacy of progressive tax to fund public provision to all.

      Competing in that game is to further surrender Labour Party values to neo-liberalism.

      Reply
      • observer 10.1.1
        11 March 2025 at 1:15 pm

        Cutting the regressive GST isn't neo-liberalism. Switching tax burden from work to property isn't neo-liberalism. Which is why I mentioned them.

        Reply
        • SPC 10.1.1.1
          11 March 2025 at 1:42 pm

          What you said was

          Labour must sell a tax cut.

          Government is underfunded already and we face a decade of budget deficits.

          Reply
  11. Descendant Of Smith 11
    11 March 2025 at 5:15 pm

    There are a few emerging issues as well for tax gathering:

    1. Increasing use of robotics and AI to do tasks currently done by humans

    Whether it is packing apples or designing logos, letterheads and advertising here are jobs currently done by humans that no longer will be.

    This will reduce the tax base as robots and Ai don't pay tax.

    2. Aging population

    This has already reduced domestic spending as many go from no mortgage, no kids, no student loans and two jobs to being on NZS. Low inflation means less interest on their savings and cost of living increases mean capital will reduce. Reduced spending also means reduced GST take.

    Again a reduction in the tax base.

    3. Electric vehicles

    Lower fossil fuel use will result in lower tax revenue. This is already impacting some states in the US who have much lower fuel revenues (per dollar of fuel) than New Zealand.

    Yet another cut in the tax base.

    4. Cigarette and alcohol consumption

    One trending down, the other trending down amongst young people who are also shifting to low or no alcohol products.

    Over time these things are going to make a significant difference.

    Reply

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