National Party leader Simon Bridges claims a capital gains tax (CGT) wasn't blocked by Winston Peters, but instead by Jacinda Ardern who was concerned about her political future if she introduced one.
On Wednesday last week, Ardern announced implementing a CGT had been ruled out as the coalition Government had failed to reach a consensus on the issue.
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She also said, while she believed a CGT could have helped resolve issues with the tax system, she wouldn't introduce the tax at any time as leader as it was clear a majority of New Zealanders didn't believe in it.
"While I have believed in a CGT, it's clear many New Zealanders do not. That is why I am also ruling out a capital gains tax under my leadership in the future," she said.
A Reid-Research poll from earlier in April found that 65 percent of voters didn't think a CGT should be a priority for the Government.
The backdown was seen as a win for New Zealand First, which has consistently rallied against the tax. Following Wednesday's announcement, Peters posted an image online saying "We've heard, listened and acted: No capital gains tax".
But Bridges doesn't believe it was New Zealand First that forced its coalition partner, Labour, to roll over.
Instead, he said, the National Party's "strong opposition" to the tax had embarrassed the Government and highlighted public defiance towards the tax, making Ardern question her political future if she introduced one.
"Jacinda Ardern decided that her Government would be dog tucker if they did this, it is a political assessment by her, it wasn't Winston Peters and New Zealand First," he told The AM Show.
"Why did she do that? I think it is ultimately because you had a strong opposition that was relentlessly pursuing this issue.
"She could see what the future held if she did, and that was from National doing its job."
Bridges said without National's opposition New Zealand First would have likely compromised on some changes.
The Green Party, Labour's confidence and supply partner, has long campaigned in favour of a CGT. Co-leader James Shaw said last Wednesday the party will "continue to work with Labour to make our tax system fairer".
"We're particularly disappointed that the Tax Working Group's unanimous recommendation to implement a capital gains tax on investment properties isn't going ahead."