Senior Labour MP David Parker says remaining Revenue Minister would have been 'untenable'

Senior Labour MP David Parker has admitted he didn't believe he could remain the Revenue Minister after the Prime Minister ruled out a wealth and capital gains tax.

Chris Hipkins was forced to make another Cabinet reshuffle on Monday after Kiri Allan's arrest and subsequent resignation from her portfolios.

During the reshuffle, it was also revealed Parker would relinquish the Revenue portfolio.

It comes less than two weeks after Hipkins ruled out introducing a capital gains tax or wealth tax under his premiership. He also torched a tax switch idea that the Government had secretly been working on. 

Parker last week admitted being "disappointed" by Hipkins' decision as he had worked "intimately" on the tax-switch proposal.

Speaking to reporters on Tuesday morning, Parker said it was "untenable" for him to remain Revenue Minister after the wealth and capital gains tax decision.

"You know my views on those things, I thought it was untenable for me to continue so I suggested to Chris [Hipkins] that it's in the best interests of him and the party that someone else takes that role," Parker told reporters.

"I've tried to do this in a way that makes it as smooth as possible for Chris Hipkins."

Parker said he was a "loyal member" of Labour and he didn't want to cause "disturbances".

"I just thought it was untenable to continue."

He said his relationship with Hipkins was still very good.

"I am an agent for progressive change. I have been that way all of my political life. I have still got lots of energy as shown by the scraps I have got into in the last couple of weeks on transport."

Parker believed his successor, former tax lawyer Barbara Edmonds, would do a good job. 

She told Newshub she had no personal view on a wealth or capital gains tax and the "Prime Minister has ruled it out".

Labour is yet to release its election tax policy. 

A Newshub-Reid Research poll in May revealed 53.1 percent of New Zealanders supported the Government introducing a wealth tax, while 34.7 percent opposed it.

A report released by Inland Revenue earlier this year found the effective tax rate paid by New Zealand's wealthiest families is less than half of that of middle-income Kiwis.