ℍ𝕚𝕡𝕜𝕚𝕟𝕤’ 𝕊𝕦𝕘𝕘𝕖𝕤𝕥𝕖𝕕 ℂ𝔾𝕋 ℂ𝕠𝕦𝕝𝕕 𝔹𝕠𝕠𝕤𝕥 ℕℤ 𝔼𝕔𝕠𝕟𝕠𝕞𝕪 𝕗𝕠𝕣 𝔸𝕝𝕝.

ℍ𝕚𝕡𝕜𝕚𝕟𝕤’ 𝕡𝕣𝕠𝕡𝕠𝕤𝕖𝕕 ℂ𝔾𝕋 𝕔𝕠𝕦𝕝𝕕 𝕘𝕣𝕠𝕨 ℕℤ’𝕤 𝕖𝕔𝕠𝕟𝕠𝕞𝕪 𝕓𝕪 𝕥𝕒𝕩𝕚𝕟𝕘 𝕨𝕖𝕒𝕝𝕥𝕙 𝕗𝕒𝕚𝕣𝕝𝕪, 𝕗𝕦𝕟𝕕𝕚𝕟𝕘 𝕤𝕖𝕣𝕧𝕚𝕔𝕖𝕤, 𝕒𝕟𝕕 𝕓𝕠𝕠𝕤𝕥𝕚𝕟𝕘 𝕛𝕠𝕓𝕤 𝕗𝕠𝕣 𝕒𝕝𝕝 𝕂𝕚𝕨𝕚𝕤.

𝗖

hris Hipkins, Labour Party leader, has hinted at a capital gains tax (CGT) for Aotearoa New Zealand’s 2026 election, reversing his 2023 stance. 

This tax on profits from asset sales, like investment properties, aims to address tax unfairness and fund services. 

Is a CGT needed to grow the economy? A well-designed CGT could benefit all Kiwis by promoting fairness and broad-based growth. 

A CGT tackles tax inequity. Inland Revenue’s 2023 data shows the wealthiest pay a 9.4% tax rate, far below the 20.2% for middle earners, as asset profits often go untaxed. 

Taxing gains ensures high earners pay their share, reducing inequality that slows growth. 

The OECD notes New Zealand’s lack of a CGT is unusual, and it could fund services without raising income taxes, which Hipkins avoids. 

The 29 October 2024 IPSOS Issues Monitor survey found 65% of New Zealanders support a CGT in some form, showing strong public backing.

A CGT could shift investment. Hipkins says untaxed profits fuel property speculation, inflating house prices and masking economic issues. 

Taxing gains could push money into businesses, creating jobs and innovation. 

The 2019 Tax Working Group said a CGT could raise funds, though exempting family homes might limit revenue. 

The July 2023 1News Verian poll showed 52% support for taxing rental properties, with experts like Max Rashbrooke and business leaders like the co-founder of Mainfreight, Bruce Plested agreeing all income should be taxed fairly. 

Critics highlight risks. ACT’s David Seymour claims a CGT could scare off investors by taxing profits twice, but OECD data from Australia shows well-designed CGTs don’t significantly cause capital flight, undermining his argument. 

Setting up a CGT is complex—rates and exemptions could create loopholes. 

National’s Nicola Willis prefers spending cuts, and Winston Peters says you can’t tax your way to prosperity. 

The July 2023 poll showed only 16% support taxing family homes, and National’s Christopher Luxon calls Labour’s shift a broken promise, risking voter trust. 

New Zealand’s economy, strained by high household debt and housing reliance (per IMF warnings), needs diversification. 

A CGT could be the answer to growth by benefiting the entire economy. 

It funds universal services like healthcare and schools, strengthening society for all. 

It shifts investment to businesses, creating jobs for workers, not just wealthy investors. 

Unlike income tax hikes that hit workers, a CGT targets untaxed wealth, easing burdens on regular Kiwis while funding infrastructure and training for broad growth. 

The IPSOS survey’s two-thirds support suggests public readiness. 

Labour must design a clear, fair CGT—likely taxing investment properties, not family homes—and pair it with policies boosting jobs and skills to ensure it helps all Kiwis, convincing a skeptical public it strengthens the whole economy.

𝗔𝗻𝗮𝗹𝘆𝘀𝗶𝘀: 𝔅𝔯𝔲𝔠𝔢 𝔄𝔩𝔭𝔦𝔫𝔢

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