Labour Leader Chris Hipkins says he is confident his party could form a Government with the Greens without making any concessions on tax policy.
On Breakfast this morning, the leader of the opposition was asked about the Green Party's recently unveiled tax policy for the election.
Seven new or adjusted taxes were announced as part of the 'A Tax System for All of Us' package, and included a wealth tax, a higher income tax, a higher corporate tax, a big tech tax, a landlord tax, a bank tax, and an inheritance tax.
Hipkins said Labour disagreed with the majority of what the Greens announced, with the Landlord tax – restoring interest deductibility on residential investment properties – the only thing it was currently mulling.
He said Labour was focused on its “simple, targeted” capital gains tax, with proceeds going towards the health system.
If Labour were in a position where it could form a Government with the Greens, but had to adopt some of their tax policies to get over the line, Hipkins said his party would “stay true” to its campaign commitments.
Speaking to Breakfast's Tova O'Brien, Swarbrick answered questions about the specifics of the "seven major changes that are in our policy package". (Source: Breakfast)
“Christopher Luxon said no to a whole lot of things before the last election, which he then said yes to when he sat around the negotiating table.
“I’m not going to say yes to things that we’ve specifically said before the election that we will not do.”
He said: “We get scrutinised more than any other party in Parliament.” It was therefore important for Labour to stick to its campaign guns.
When asked if Labour would be happy to spend another three years in opposition because of this, Hipkins said he could “never see that happening”.
“Ultimately they [the Greens] would be supporting Christopher Luxon to stay as Prime Minister.
“There would be goodwill in post-election negotiations, but that goodwill will not extend to Labour agreeing to do things that we said before the election we won’t do."
Inheritance tax
The party wants to add a new higher tax rate on income made over $160,000. (Source: 1News)
In its tax announcement, the Greens proposed an inheritance tax – charging 33% on inheritances received worth over $1 million. It said that small gifts, family homes, and farms were exempt, and that the person receiving the inheritance or gift would pay the tax.
Hipkins told Breakfast Labour did not support an inheritance tax, saying it carried “unintended consequences” that could lead to “real unfairness”.
“If you take the case of a family farm, it’s often going to have a value well in excess of $1 million.
“On paper, it would mean that a next generation of farmers could be locked out of owning the family farm. And that’s just one example.”
The Greens’ wealth tax, taxing net assets including property, shares, and bonds above $10 million at 2.5% - with the family home exempt - as well as a new higher tax rate on income over $160,000 (45%), were also something Labour did not support.
Hipkins said the Greens’ proposed hike for the corporate tax rate was another element Labour disagreed with.
“At a time when we’re losing more and more businesses overseas, we need to make sure we keep businesses here in New Zealand so we can grow New Zealand’s economy.
“Now is not the time to be increasing corporate taxes, and potentially driving investment offshore.”
On the landlord tax, Hipkins said Labour would soon set out its position.
“We haven’t made a final decision on that yet. We’ll make our call on that when we release our own fiscal strategy and our own fiscal plan."
The morning headlines including UK Prime Minister Keir Starmer's resignation and a new FIFA record from Lionel Messi. (Source: Breakfast)
When it came to higher taxes for banks, Hipkins said National’s levy announced in the budget was “a form of bank tax” that he wanted to look at and scrutinise.
He said Finance Minister Nicola Willis “wanted to go further” with the levy, but couldn’t get the Act Party’s support.
“So we’re trying to get hold of the advice that Nicola Willis relied on when she made that decision. We want to scrutinise that advice before making a call on what we do about the levy that Nicola Willis has already introduced.”
The Greens' big tech tax, a 5% withholding tax on big tech profits sent offshore, would be difficult to get across the line, Hipkins said.
“If you’re the only country in the world doing it, that’s quite problematic."
He said that when Labour was last in Government, it held the position that if a multinational solution could be found, it would be a “far better option”.
Prime Minister Christopher Luxon has said the Greens' plans would drive wealth out of the country, calling it a "wrecking ball" for the economy.
"If you seriously think that wealth creators and wealth generators in this country are going to hang around in New Zealand on the back of that policy, that's quite something."
The Greens have said their tax policies would result in a tax cut for 96% of New Zealanders.
When pressed on some of the policies yesterday, Greens co-leader Chlöe Swarbrick defended the announcements.
She said 1000 people of 38,000 inheritances would be affected by the inheritance tax.
"We're also again talking about a few percentage points of a few people on the margins who are inheriting enormous amounts of currently untaxed and unearned wealth."
Meanwhile, the other co-leader, Marama Davidson, said 99.7% would not pay the net wealth tax, which has been branded a "super-rich tax".
Swarbrick said the new and upped taxes were justified by a "cost of greed crisis".
"New Zealanders aren't stupid – they are watching the cost of their groceries, power bills, and the cost of living go through the roof, while corporates rake in record profits."
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