National rules out bed tax and bank tax, pledging no new taxes before 2026 election
Prime Minister Christopher Luxon has ruled out a bed tax and a bank tax, promising "no new taxes" if National is re-elected in the November 2026 general election. The 23 August 2026 announcement scraps two revenue options the government had itself floated and, in the case of the accommodation levy, reverses a formal commitment under the Auckland Regional Deal.
A fortnight earlier, Luxon had spoken publicly about three possible new taxes under National: a bed tax, a bank tax, and a fuel excise increase. The bank tax had already been ruled out before the bed tax was scrapped. NZ Herald
The reversal has drawn sharp responses from mayors who had been counting on the accommodation levy — a per-night charge on visitor stays that councils see as a way to fund local infrastructure. Auckland mayor Wayne Brown said he was "deeply disappointed" that National ruled out the bed tax after formally agreeing to it months earlier, and accused the party of "walking away" from its commitment to the Auckland Regional Deal. Stuff
The Auckland Regional Deal, signed in April 2025, included a government commitment to consider the accommodation levy policy in 2027. Brown argued the levy was a user charge — a fee paid by those who use a service — rather than a general tax, and would result in no additional rates or taxes on Aucklanders. He said he looked forward to discussing the issue with Infrastructure Minister Chris Bishop and Local Government Minister Simon Watts at the next quarterly review of progress in September. RNZ
Queenstown Lakes District mayor John Glover called the ruling-out a "complete u-turn" on policy. The Queenstown regional growth deal had been on the verge of being signed about a week and a half earlier but had to be rescheduled because National's crisis talks fell on the same day. Rotorua mayor Tania Tapsell said she was "surprised" by the bed tax announcement, given it formed part of the Auckland Regional Deal. RNZ
The question of whether National would rule out new taxes at the next election was put directly to Luxon at a post-Cabinet press conference on 3 November 2025, when a journalist asked whether the government needs a bed tax and whether the National Party could rule out running on any new taxes. Beehive
National's broader tax approach has emphasised incentives for investment rather than new levies. Budget 2025 introduced Investment Boost, a tax incentive allowing businesses to immediately deduct 20% on qualifying investment in capital assets, designed to encourage investment, grow the economy, and lift wages. National Party
The broader context here is that the about-face on the bed tax carries implications for the government's relationship with councils that have structured long-term funding plans around regional deals. The Auckland Regional Deal, signed in April 2025, was meant to provide a framework for central-local government cooperation on infrastructure and growth, with the accommodation levy flagged for consideration in 2027. Brown's characterisation of the levy as a user charge rather than a general tax speaks to a longstanding debate in local government finance about whether visitor-based charges constitute taxation in the conventional sense or are better understood as pricing for infrastructure consumed by non-residents.
The rescheduling of the Queenstown regional growth deal because of National's crisis talks adds another layer. Councils that have already deferred signing growth deals are now being told a revenue instrument they expected to be on the table is off it. For mayors like Brown and Glover, who have argued that tourism-heavy districts bear disproportionate infrastructure costs without commensurate revenue tools, the "no new taxes" pledge narrows the available options to rates increases, central government grants, or debt — none of which are politically or fiscally straightforward.
The pledge also constrains National's fiscal positioning heading into the November election. Having ruled out a bed tax, a bank tax, and committed to the Investment Boost deduction, the party has narrowed its revenue-raising flexibility while preserving an expenditure-side tax incentive. Whether that calculus holds through a campaign period in which local government funding pressures will remain live is the practical question for ministers and mayors alike. The September quarterly review between Brown, Bishop and Watts will be the first test of whether the pledge hardens into policy or becomes a negotiating position.
