Hipkins puts job on the line over no new taxes beyond capital gains tax

Labour leader Chris Hipkins has said he would put his job on the line over a pledge not to introduce new taxes apart from a capital gains tax. He made the pledge in an extended interview with RNZ's Nine to Noon programme, RNZ reported. The general election is scheduled for 7 November.

A capital gains tax is a tax on the profit made when an asset is sold. Labour has proposed a 28 percent tax on profit from the sale of commercial or residential property after 1 July 2027, excluding the family home. The party said it would target investment and commercial property and that every dollar raised would go to healthcare.

Hipkins said Labour will not support new taxes that it does not have a public mandate for. He said the party's priority would be to balance the budget without adding new taxes. That approach would not accommodate the wealth tax the Green Party wants, he said. He said the public supports a capital gains tax, that it is long overdue, and that Australia has seen it increase government revenue over time.

Labour said that once the capital gains tax is fully implemented, core Crown expenditure and revenue would be maintained at around 33 percent of gross domestic product (GDP), the total value of goods and services the economy produces.

On cost of living, Hipkins said that not increasing fuel taxes would help ease pressures on households. He also named three free GP visits and public transport fare caps as measures that would help.

In 2023, Hipkins promised not to implement either a capital gains tax or a wealth tax if Labour was re-elected that year. Former prime minister Jacinda Ardern ruled out a capital gains tax in 2019.

Prime Minister Christopher Luxon has warned that Labour's capital gains tax could devastate the housing market.

On 4 November, the National Party said Hipkins' pledge to resign rather than introduce any new tax beyond a capital gains tax was one he would not be able to keep. National said the pledge could not survive negotiations with the Greens.