Why Labour's new finance spokesperson Barbara Edmonds thinks a tax hike could be on the cards

Labour's new finance spokesperson Barbara Edmonds is questioning whether the Government will increase GST in its first upcoming Budget.

The Government will present its 2024 Budget on May 30 which Finance Minister Nicola Willis said will "deliver tax relief to hardworking New Zealanders". 

But Edmonds, who took over the role after Grant Robertson retired from politics, is concerned there may be a surprise tax hike on the cards.

Edmonds told AM on Monday she found it "quite concerning" to hear National Party Minister Tama Potaka mention fiscal austerity on AM last week.

"Now that's concerning for a number of reasons… there's two kinds of arms to it: One is you cut back on spending but two there's also the potential for an increase in tax rates," she told co-host Melissa Chan-Green.

Appearing on AM last week, Potaka said the Government is focused on fiscal austerity and responsibility to make sure "we're not spending more money than we earn".

"We are having to clean up the mess that's been left behind, whether or not that's the $100 billion debt or the overspending in the budget," Potaka said. 

"What we are really focused on is getting some fiscal austerity back into the game."

Edmonds, who is currently at home with COVID-19, said if she was in Parliament this week, she would have questioned whether that means the Government is going to increase GST to cover the tax cuts.

Edmonds pointed to the time National, led by John Key, increased GST from 12.5 to 15 percent to fund personal tax cuts despite ruling it out during the election campaign. 

Newshub has reached out to Potaka for further comment, however, has not yet received a response.

Edmonds, who is a specialist tax lawyer, said the Labour Party is still weighing up whether they will propose a capital gains or wealth tax.

"They both have their pros and cons and the number one thing for me is making sure it's workable because you don't want to bring in… new tax basis no matter what they are if it's not going to achieve the goal that you want."

Edmonds said the party has until their manifesto to decide which, if any, tax changes they will make, which will be released before the next election.

"People do want to see a fairer, more progressive tax system so it's a question for Labour as to what we will take into 2026."