2 December 2024 – Tax Justice Aotearoa welcomes the resolution of the Labour Party conference to continue work on wealth and capital gains taxes – but urges the party to recognise more is likely required to address inequities in our tax system and society.
“Labour’s commitment to tax reform appears to be strong this time around and that is certainly good news,” says Glenn Barclay, chair of Tax Justice Aotearoa.
“It’s also good that they haven’t yet made a decision between a capital gains and a wealth tax, as it doesn’t necessarily have to be an ‘either/or’ situation.”
“We know from the work that IR did last year that the average New Zealander pays an effective tax rate of over 20%, whereas the wealthiest have an effective tax rate of around 9%”, Glenn Barclay says.
“Addressing that gap is likely to require a mix of taxes and it will be important that an effective combination of taxes is settled on.”
“It was also reported that work on other taxes such as an inheritance tax will cease, which is disappointing, as we also need to limit the extent of the huge inter-generational transfer of wealth that is currently underway, which will significantly increase inequality.”
Tax Justice Aotearoa also welcomes Barbara Edmonds’ comment in her speech to the party on Saturday, that Labour would be willing to defer a return to surplus.
“This is recognition that successive governments have taken an unnecessarily tight approach to government debt and this has harmed our public services and the people they serve,” Glenn Barclay says.
“But once again, this is only part of the story and we need to significantly increase government revenue as a percentage of GDP – to the point where it is at the level of some of the countries we like to compare ourselves with, such as Denmark, Germany and even the UK.”
“This will be essential if we are to properly address the many challenges we face such as climate change, inequality and rebuilding our important public services such as health and education.”
