Labour has agreed to campaign on a capital gains tax (CGT) covering just property — excluding the family home and farms — to help fund a new scheme offering a limited number of free GP visits.
The plan was approved by the Labour caucus in a near-unanimous vote, and the party’s council and policy council have also signed off on the plan.
The policy was announced on Monday morning after RNZ was earlier leaked details.
It ends months of internal debate over whether to pursue a wealth tax or a CGT.
The caucus and party council have settled on the latter, signing off on a 28% tax on profits from the sale of properties only, excluding the family home and farms.
The policy would kick in from July 2027 and would not be retrospective.
Labour is pairing the tax announcement with a new healthcare initiative, showing how the revenue could fund limited free GP visits through a Medicard scheme.
An RNZ-Reid Research poll last month found 43% in support of a CGT on investment properties, with 36% against and 22% undecided.
The recent tax debate has been a fraught one for the party, going back to Hipkins’ call before the 2023 election to rule out introducing either a wealth tax or CGT as prime minister.
That decision prompted the then-revenue minister David Parker to quit his role in protest.
Hipkins’ first announcement after Labour’s election loss was to put all tax options back on the table, promising a “blank page” for policy. But he has also been open about his preference for a CGT over a wealth tax.
At last year’s party conference, members agreed to continue developing both options, leaving the final call to the policy council and caucus.
Labour’s vexed history with capital gains tax stretches back more than a decade.
Former prime minister Jacinda Ardern abandoned a broader CGT in 2019 after failing to win over coalition partner NZ First and then vowed never to revisit it while leader.
Earlier attempts under Phil Goff in 2011 and David Cunliffe in 2014 also proved politically costly.
In recent months, Hipkins has come under pressure to show more policy direction. National has accused Labour of offering only criticism and no fresh ideas since the election.
Labour ventured back into the policy arena last week, unveiling three separate initiatives with varying success.
Its “Future Fund” proposal found cautious support from Infrastructure NZ and economists, but business groups largely reserved judgement due to the lack of detail.
Hipkins fumbled the second announcement – a new approach of funding GPs — refusing questions from reporters, not realising the details had already been made public.
Labour also announced plans to expand taxpayer subsidies for New Zealand’s video-game industry.
rnz.co.nz
