Labour leader Chris Hipkins says he will put his job on the line over a promise that a government he leads would bring in no new taxes except a capital gains tax, in one of his last major interviews before New Zealanders finish voting on Saturday.
Hipkins made the pledge in an extended interview on RNZ’s Nine to Noon on Thursday 5 November, RNZ reported. He also ruled out the wealth tax favoured by the Greens, a likely partner if Labour is in a position to form a government after the count.
“We will not support new taxes that we do not have a public mandate for,” Hipkins said.
On the wealth tax he was blunter. “It [a wealth tax] hasn’t worked anywhere else in the world and there’s a reason why countries that have them are taking them away because ultimately they don’t work.”
He said the Greens, Te Pāti Māori and the Opportunity Party all had plans for major tax reform, but that “there isn’t a public appetite for tax reform that is that radical”. A capital gains tax, by contrast, was supported by the public and “long overdue”, he said, pointing to Australia, where the tax had lifted government revenue over time.
The pledge goes straight at the line National has run hardest in the final week. On Thursday Christopher Luxon’s campaign bus, which had been badged the “Stick To The Plan” Express the day before, became the “No New Taxes” Express as it travelled from Napier through Taupō to Rotorua, RNZ’s Lauren Crimp reported from on board. National has ruled out a capital gains tax and argues that a Labour-led coalition could not be trusted to stop at one new tax.
Luxon also used the bus microphone to promote the Government’s books. Announcing the Crown’s financial statements for the three months to September, he told passengers “the good news is the deficit was $1.3b smaller than forecast just at the PREFU”, meaning the pre-election economic and fiscal update.
Labour’s tax is narrower than most overseas versions. According to a 1News explainer published on 18 October, it would apply a flat 28 per cent rate, matching the company tax rate, to gains made on residential and commercial property from 1 July 2027. Every property covered would get an opening value on that “valuation day”, so only increases after it would be taxed. The family home, farms, KiwiSaver, shares, businesses and personal items such as cars, boats and art would be exempt, and nothing would be payable on a transfer to a partner, at the end of a relationship or on death.
Baches and holiday homes would be caught, because Labour plans to use the main-home test from the existing bright-line rules. Hipkins has said 90 per cent of New Zealanders would never pay it. Labour estimates the tax would raise an average of $700 million a year, starting at $100 million in 2027/28 and reaching $1.35 billion a year from 2030, with every dollar ring-fenced for health, including the party’s promise of three free GP visits a year for everyone.
Hipkins told Nine to Noon that free primary care would be the biggest health change in generations. “So making primary care free will be the biggest change to the health system since the first Labour government made hospital care free. That will keep people out of hospital.”
The capital gains tax has a long and unhappy history for Labour. Phil Goff campaigned on one in 2011 and lost, David Cunliffe took the same idea into 2014 and lost by more, and Jacinda Ardern ruled one out in 2019 after the Tax Working Group chaired by Sir Michael Cullen recommended a broad version. Hipkins himself promised in 2023 that he would introduce neither a capital gains tax nor a wealth tax. At a televised leaders’ debate in October he said the capital gains tax was the one issue he had changed his mind on.
Hipkins also defended Labour’s economic record. Asked whether the last Labour government had borrowed and spent too much during the pandemic, he said New Zealand’s inflation peaked at 7.4 per cent while countries such as the United Kingdom reached double figures. “We were hit by a global wave of inflation,” he said.
He said Labour would scrap the Government’s Investment Boost tax break, which he said mostly helped large businesses, and use the savings for small businesses and pay equity. “That will save us some money and we are going to put that money into pay equity, amongst other things,” he said, adding that Labour “will be responsible with the way we manage the government’s finances”.
National has challenged those sums for weeks. When Labour released its fiscal plan in early October, Finance Minister Nicola Willis called it fraudulent and argued it left out the full cost of restoring pay equity, which National put at $11 billion, and of a three-year freeze on fuel tax and road user charges, which she put at $3.1 billion, RNZ reported on 5 October. Labour said it had $10.5 billion in unallocated funding to cover pay equity and that the fuel tax freeze would come from the National Land Transport Fund.
Independent economist Cameron Bagrie said at the time that neither side’s plan was free of holes. “Realistically, it doesn’t matter which political party you look at, there’s going to be gaps, there’s going to be challenges, there’s going to be some pretty complicated trade-offs,” he said.
On running a multi-party government, Hipkins said he would set clear rules. “Everybody does need to work together to make government work,” he said. He ruled out sharing the finance portfolio, which would go to Barbara Edmonds, and said there would be no separate Treasurer.
The race remains close. The last poll before the vote, by Freshwater Strategy for The Post, put Labour on 30.7 per cent and National on 26.4 per cent, with Opportunity on 5.1 per cent, just over the threshold, RNZ reported. Whoever ends up governing will probably need several partners, and tax is likely to be one of the first things negotiated.
Still deciding? You can find out which party best matches your views with our voting tool before polls close at 7pm on Saturday.
Would you trust a promise of no new taxes beyond a capital gains tax, or do you think coalition talks will change it? Tell us what you think 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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