The three governing parties are launching attacks on Labour’s leaked tax policy, as leader Chris Hipkins prepares to announce further details this morning.
Labour today confirmed it will campaign on introducing a “targeted capital gains tax” on profits made following the sale of commercial or residential property, excluding the family home.
The 28% tax, which would come into force from July 1, 2027, would also not apply to farms, KiwiSaver, shares, business assets, inheritances and personal items like cars, boats, art and furniture.
Labour says all tax revenue collected would go towards health spending, including funding three free GP visits for every New Zealander.
The party’s policy wasn’t expected to be announced today, but its hand was seemingly forced after details were leaked to RNZ, which reports the Labour caucus approved the policy in a “near-unanimous vote”.
No costings have been provided by Labour as yet. Hipkins began a press conference about 10.30am in Wellington this morning.
All three coalition Government parties have publicly condemned the policy, with National’s finance spokeswoman Nicola Willis claiming the tax would increase costs and stunt economic growth.
“It’s a tax on savings, investment and growth. The complete opposite of what our economy needs right now.”
She also warned using the revenue to fund free GP visits would “clog the system” and provide free doctor appointments for “millionaires”. Willis affirmed National would not introduce a capital gains tax.
Act leader David Seymour, also Acting Prime Minister with Christopher Luxon in Malaysia, criticised the policy as a cynical exercise in “political signaling rather than policy”.
“The policy would make New Zealand a nation of tax accountants, not entrepreneurs. The policy won’t raise much revenue, but it will raise a generation of people gaming the system instead of growing the economy,” he said.
“They say it’ll fund free doctor visits, but it wouldn’t. The tax wouldn’t raise a cent until years after its proposed start date. It’s marketing, not policy.”
New Zealand First leader Winston Peters, speaking from Denmark amid a series of overseas visits as Foreign Minister, doubted the tax would raise enough revenue to pay for free GP visits for everyone.
He also questioned whether it would require compensation if the sale of eligible property ended in a loss.
“It was an absolute mess of an announcement,” he said.
Labour’s tax plan being leaked ahead of its planned announcement is the latest in a string of missteps in the party’s policy release.
Last week, Labour revealed its first policy, a “Future Fund” that would use dividends from some state-owned assets to invest in New Zealand businesses, which was broadly welcomed but also criticised for a lack of detail.
It also shared the name of a similar policy from NZ First, which Hipkins claimed not to be aware of.
Hipkins was also caught out when part of the party’s health policy proposing to create an independent authority to set “sustainable prices” for general practices was revealed in an opinion piece by Labour’s health spokeswoman Dr Ayesha Verrall published in NZ Doctor.
Labour’s tax announcement had been expected in the coming weeks but was evidently brought forward after the party learned the policy had been leaked to RNZ.
Adam Pearse is the Deputy Political Editor and part of the NZ Herald’s Press Gallery team based at Parliament in Wellington. He has worked for NZME since 2018, reporting for the Northern Advocate in Whangārei and the Herald in Auckland.
