25 March 2024 – Chris Hipkins’ commitment to review and rewrite Labour’s tax policies – including a re-look at capital gains and wealth taxes – is being welcomed by Tax Justice Aotearoa.
In his State of the Nation speech yesterday, Chris Hipkins said the Labour Party Policy Council would soon release a discussion document on tax – to set out options for future tax policy.
“We agree with Chris Hipkins that ‘Yes, we need to talk about tax,’” says Tax Justice Aotearoa chair Glenn Barclay.
“In light of current challenges facing public services, cuts to Cook Strait ferries and the Government’s fiscal hole, it is clear that collecting more revenue and having more equitable taxes makes better sense than providing tax breaks for landlords.”
TJA points to the UK – where its recent budget, including an extension of a windfall tax on oil and gas companies, will increase tax as a percentage of GDP to over 37%.
“Chris Hipkins is correct, in that our current tax system is inequitable and unsustainable, and that reform of our tax system isn’t just a ‘matter for the idealists’, but an ‘economic necessity,’” says Glenn Barclay.
TJA notes the International Monetary Fund’s recent call for Aotearoa to have a more efficient, equitable, and sustainable tax system though a range of taxes including a comprehensive capital gains tax, land value tax, and changes to corporate income tax. (ref. https://www.imf.org/en/News/Articles/2024/03/19/mcs-new-zealand-staff-concluding-statement-of-the-2024-article-iv-mission )
TJA also agrees with Chris Hipkins’ point that those who earn salary and wages are contributing a greater share of tax than those who earn income through wealth.
“This echoes what TJA has been calling for: a tax system that ensures people who have more to contribute, make that contribution – by gathering more revenue from wealth and gains from wealth,” says Glenn Barclay.
“We know there’s a strong public appetite for progressive tax changes: there is support – we just need strong political leadership.”
Polling commissioned last year by the Better taxes for a Better Future campaign, lead by TJA, shows 61% of New Zealanders think the wealthy (those earning over $180,000 per year or with assets over $5 million) should pay more tax than they currently do. (ref. https://www.bettertaxes.nz/poll_shows_new_zealanders_want_the_wealthy_to_pay_more_tax?e=d0a43970f752784fb3054f280a9130b4&utm_source=tja&utm_medium=email&utm_campaign=labour_policy_change_welcome&n=2 )
The same poll showed 88% of New Zealanders think the wealthiest should – at the very least – be paying tax at the same overall rate as average New Zealanders.
There was also strong support for capital gains and excess profits taxes. (ref. https://www.bettertaxes.nz/essential-profits-poll?e=d0a43970f752784fb3054f280a9130b4&utm_source=tja&utm_medium=email&utm_campaign=labour_policy_change_welcome&n=3 )
