Two weeks ago the Prime Minister was talking openly about three possible new taxes. On Sunday he ruled out two of them and said nothing about the third.
National used a weekend announcement to promise no new taxes at all if it is returned to government on 7 November. Christopher Luxon and Finance Minister Nicola Willis confirmed that a second term would not bring an accommodation levy on short stay rentals, often called a bed tax, and would not bring a new tax on banks. Both had been live options only days earlier.
The shift matters because National had previously used narrower wording. Its budget responsibility rules, released on 9 August, came with a promise of “No new taxes on working people. No tax increases for working people”, which left plenty of room for taxes on someone else. Sunday’s version drops the qualifier.
“Our promise of no new taxes this election reflects our disciplined economic management, focused on growing the economy, creating jobs, lifting wages and keeping taxes low,” Luxon said, as reported by RNZ. In the party’s own release he framed the campaign around it, saying “Tax is a defining theme for this election, and the choice for Kiwis is clear.”
Willis put the position more bluntly, telling interest.co.nz there would be “no new taxes on the table” and that “there is no way to do an accommodation levy without increasing costs on Kiwis booking a weekend away”. She also returned to National’s standard attack line on the previous government, saying Labour “spent up large in government, racked up $120 billion more debt and kept taxes higher”.
The two ideas now off the table were not enormous earners. Auckland’s proposed bed night levy was expected to raise in the order of $27 million a year. The Reserve Bank’s prudential levy consultation put roughly $209 million over three years on the table from financial institutions. Ruling them out costs the books relatively little while removing two easy targets for opponents.
The silence on petrol is the more interesting part. When Luxon first raised the three options he included an increase in fuel excise duty, which has not moved since 2020 and is the main way roads get paid for. Sunday’s announcement did not mention it. Asked about it, Luxon said the petrol tax had been a “feature of New Zealand’s system for decades” and pointed out his government had not increased it in its first term.
That is a careful answer rather than a promise. Willis, pressed on whether “no new taxes” also meant no increases to existing taxes, would not rule out lifting current levies or fees. So the pledge as it stands covers new taxes being invented, not old ones going up. For most households the difference is not academic. Fuel excise and road user charges land hardest on people who drive long distances for work, on tradespeople and on rural and outer suburban households with no realistic public transport option, and they land as a flat charge regardless of income.
Labour spent the same weekend on the other side of the same argument, releasing its fiscal strategy. The party has committed to returning the books to surplus by 2029/30, to reducing net debt towards 20 percent of GDP over time, and to holding core Crown spending and revenue at around 33 percent of GDP once its capital gains tax is fully in place. It also wants an independent Parliamentary Budget Office to cost election promises, a restored dual mandate for the Reserve Bank covering employment as well as prices, and the return of wellbeing reporting.
Finance and economy spokesperson Barbara Edmonds said Labour “will return the books to surplus by 2029/30 and reduce net debt over time but we won’t do that by cutting the foundations of our economy”, according to the Otago Daily Times. Chris Hipkins said “New Zealand should be a country where hard work gets you somewhere. Where you can get ahead, put down roots and know your kids will have opportunities here.”
The gap between the two fiscal plans is narrower than the rhetoric suggests. National is aiming at surplus in 2028/29, debt below 40 percent of GDP and spending drifting down towards 30 percent. Labour is aiming at surplus a year later, a lower debt track and spending about three percentage points of GDP higher, funded largely by a capital gains tax that RNZ reports is forecast to raise about $1.35 billion a year by 2031. Three points of GDP is real money, and it is roughly the size of the argument. Neither track gets near the last sustained run of surpluses, when Michael Cullen delivered nine in a row and left net debt at zero in 2008.
Willis described Labour’s plan as “spending more, borrowing more and taxing more”. ACT leader David Seymour called it “going back to the future”. Labour campaign chair Kieran McAnulty made the mirror argument about National, saying that if you rule out revenue you have to cut spending, and that voters deserve to know “what National is planning to take away from them”.
Neither side has yet published the detail that would settle it. National has not said which services absorb the squeeze as spending falls towards 30 percent of GDP, and it has not said what happens to fuel excise. Labour has set a revenue target well above what its capital gains tax alone brings in, and has not fully explained where the rest comes from. Both parties are asking voters to trust a direction rather than a costed list.
There are eleven weeks until polling day, and tax is now firmly the ground both major parties have chosen to fight on. If you want to see where your own views sit against what the parties are actually promising, our voting tool lets you compare policies side by side.
What would you rather see, a smaller government that raises nothing new, or higher revenue that protects services? Tell us in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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