Incoming Prime Minister Chris Hipkins hints at tax changes, says some New Zealanders aren't paying their way

Incoming Prime Minister Chris Hipkins has hinted changes to New Zealand's tax system might be on the way in his first AM interview. 

Hipkins was successfully elected by the Labour caucus as the party's new leader on Sunday after Jacinda Ardern resigned last week. 

Speaking with AM on Monday, Hipkins said he will focus on bread-and-butter issues, like the cost of living, in his new role. 

The new Prime Minister also hinted tax changes could be on the cards saying "we should always look at how we can make the tax system fairer". 

"I think overall there are some New Zealanders who perhaps aren't contributing their fair share [of taxes]," Hipkins told AM co-host Ryan Bridge. 

When asked who those Kiwis are, Hipkins avoided the question instead saying it's important hard-working New Zealanders can get ahead. 

"You've asked about values so I will start right at the core value, if you work hard you should be able to get ahead. There are people now working really, really hard, some of them might be working multiple jobs and they're not feeling that they can get ahead. 

"They are contributing enormously to New Zealand and to our prosperity but they are feeling that they're not able to get ahead. We need a tax system that recognises this, that actually makes sure that those who are really striving, who are putting in the hard yards, actually feel the reward for that," he said. 

But Hipkins confirmed his Government would stick to Labour's tax promise for this term - which is no new taxes outside of the new 39 percent tax rate.

Hipkins added it's not just about tax, it's also about increasing New Zealanders' incomes. But he added the two go hand in hand - especially when it comes to Government-funded roles such as nurses and teachers. 

"I'll give you a practical, real-world example that I've dealt with over the last five and a half years. People have said to me, 'I'm a teacher or I'm a nurse and I could go to Australia and I could get a better salary in Australia'. 

"They pay overall higher rates of tax in Australia. Those taxes then pay the salaries of those teachers and those nurses. We can't divorce those issues. We need to increase incomes, tax is only one part of the conversation," Hipkins said. 

The new Labour leader also defended himself when questioned whether he has the financial and business know-how for the top job. 

"What I think I do bring is an understanding of the day-to-day lives of New Zealand families and the sort of pressure they will be facing, and the sort of things they are going to be concerned about," he told Bridge. 

Hipkins said New Zealanders are facing increasing financial pressure as mortgage rates increase and the cost of basics such as food, petrol and power spike - something he says he understands. 

"I understand what the issues are that are driving New Zealanders, and I want to make sure that my Government is absolutely focussed on those core bread and butter issues that are important to New Zealanders."

Hipkins' comments come as New Zealanders face high inflation, an ever-increasing Official Cash Rate and huge spikes in the cost of food. 

Recent data from Statistics New Zealand show food prices jumped a whopping 11.3 in December 2022 compared with December 2021 - the biggest increase in 32 years.

Inflation, meanwhile, is sitting at 7.2 percent, down ever so slightly from 7.3 percent in the previous quarter. It's the highest rate of inflation New Zealand has seen since the 1990s.