Chris Hipkins confirms Labour will campaign on tax reform in 2026 election

  • 27/03/2024

Labour's leader Chris Hipkins has confirmed proposed tax reform will be put to voters ahead of the 2026 election. 

Over the weekend, the former Prime Minister announced capital gains, wealth and land taxes were all back on the table. 

Such reforms have been recommended by multiple independent economic bodies but have previously been attempted by various Labour ministers without success. They were not implemented by the Labour Government after 2020 due to the party not campaigning on the issue, Hipkins told AM on Wednesday. 

He said it was his view parties shouldn't implement major tax reform without campaigning on doing so before an election.  

"In 2017, we did campaign on some of the tax reform and New Zealand First actually vetoed it - you have to have a majority in Parliament to be able to do it.

"In 2023, we made the decision not to campaign on a major tax reform platform but I was very clear at the time that was our commitment for the next term of Parliament." 

Hipkins kiboshed tax reform ahead of last year's election despite an Inland Revenue probe revealing the wealthiest individuals in New Zealand were paying less than half the tax compared to most other citizens across all income sources, primarily due to untaxed capital gains derived from businesses, real estate and other investments. 

"We clearly didn't win to be Government this term," Hipkins added. "So, going into the next election, we'll have a different policy." 

Last week, the International Monetary Fund (IMF) emphasised New Zealand could enhance productivity and promote fairness with a more efficient, equitable and sustainable tax system. It urged for a more progressive income tax system through measures including a comprehensive capital gains tax, a land value tax and reforms to corporate income tax. 

"The IMF and many economists are welcome to make recommendations," Finance Minister Nicola Willis said last week. 

"[But] it's clear that not everyone does think it's a good idea," she said of a capital gains tax.

Capital gains taxes have been famously unpopular with New Zealand voters. In 2019, then-Prime Minister Jacinda Ardern ruled out ever introducing such a reform under her watch.

"Under my leadership, we will no longer campaign for, or implement a capital gains tax - not because I don't believe in it, but because I don't believe New Zealand does," Ardern said at the time.