Labour's CGT: A Global Lesson In Fairness For Aotearoa's Future

𝗟𝗮𝗯𝗼𝘂𝗿'𝘀 𝟮𝟬𝟮𝟲 𝗖𝗚𝗧 𝗼𝗻 𝗽𝗿𝗼𝗽𝗲𝗿𝘁𝘆 𝗽𝗿𝗼𝗳𝗶𝘁𝘀 𝗲𝘆𝗲𝘀 𝗲𝗾𝘂𝗶𝘁𝘆, 𝗯𝗮𝗰𝗸𝗲𝗱 𝗺𝗮𝗷𝗼𝗿𝗶𝘁𝘆 𝗽𝗼𝗹𝗹 𝘀𝘂𝗽𝗽𝗼𝗿𝘁𝘀 𝗮𝗻𝗱 𝗢𝗘𝗖𝗗 𝗽𝗲𝗲𝗿𝘀 𝘀𝘂𝗰𝗰𝗲𝘀𝘀. 𝗡𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝗶𝗱𝗲𝗼𝗹𝗼𝗴𝗶𝗰𝗮𝗹𝗹𝘆 𝗼𝗽𝗽𝗼𝘀𝗲𝘀: 𝗡𝗭 𝗺𝘂𝘀𝘁 𝗰𝗵𝗼𝗼𝘀𝗲 𝗮𝗹𝗶𝗴𝗻𝗺𝗲𝗻𝘁 𝗼𝗿 𝗳𝘂𝗿𝘁𝗵𝗲𝗿 𝗲𝗰𝗼𝗻𝗼𝗺𝗶𝗰 𝘀𝗹𝗶𝗱𝗲

Published By Bruce Alpine.

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he New Zealand Labour Party's pledge to campaign on a capital gains tax (CGT) for the 2026 election marks a pivotal shift toward equity, targeting profits from residential and commercial property sales post-July 2027 at 28%—exempting family homes and farms. 

Projected to raise $500 million annually for three free GP visits, it's a direct antidote to healthcare strains and housing woes. 

Leader Chris Hipkins calls it "progressive and simple," aligning NZ with the Western world's norm.

John Minas is an Associate Professor at Monash University's Business School, who specializes in tax policy - and specifically - capital gains tax. He tells Guyon from Melbourne that New Zealand is currently an outlier. RNZ

This isn't innovation; it's overdue alignment. As one of just four OECD holdouts—alongside Belgium, Luxembourg, and Switzerland—NZ's absence of CGT fuels speculation over investment, exacerbating inequality where the top 1% hoard 16% of wealth.

Over 30 OECD peers tax capital gains, from Australia's 50% discount to the UK's 10-28% brackets and US federal rates up to 20%. 

A recent RNZ-Reid Research poll underscores this appetite, with 42.6% supporting a CGT on investment properties (excluding family homes), outpacing 35.6% opposed and 21.6% undecided—signaling majority lean toward fairness over status quo. 

Polls indicate 60% of Kiwis anticipate one by 2050, amid $1 million Auckland medians and a $9 billion health gap. 

Labour's property-focused approach, though critiqued as narrow by Tax Justice Aotearoa, smartly curbs market distortions without alienating small holders. 

National's retort—"a terrible, silly idea"—from Finance Minister Nicola Willis and PM Christopher Luxon reeks of ideology, not evidence. 

A graph showing support for a Capital Gains Tax, as per the latest IPSOS Issues Monitor survey. Photo: IPSOS Issues Monitor

Echoing 2019's veto of Tax Working Group advice, it prioritises property lobbies over OECD realities: untaxed gains erode revenues, widening gaps. 

In a post-2008 landscape, even conservatives in Canada and Ireland have honed CGT to spur supply—yet National clings to neoliberal myths of sabotage. 

Enter the West's playbook: NZ boasts ample experience to craft a CGT that quells right-wing fears. 

Australia's 1985 system, refined with a 50% long-hold discount in 1999, yields $25 billion yearly, fueling growth (2.5% average) sans capital flight—foreign inflows soared. 

The UK's 1980 regime, with £3,000 exemptions and rebasing, raised £14.5 billion in 2023/24, boosting NHS funding and venture capital 20% amid no entrepreneurial slump. 

Canada's 1972 inclusion rate, hiked to 66.67% for high gains in 2024, lifted revenues 15% with unemployment steady at 6.4%, thanks to phased rollouts and farm shields. 

OECD data affirms: average 18.19% top rates stabilise 1-2% GDP contributions, with tweaks like share discounts nixing distortions. 

Labour can adopt hold-period relief, grandfather assets, and inflation indexing—silencing ACT's "red tape" chorus with empirics over Fraser Institute alarmism. 

As inflation eases, this CGT isn't risky; it's refined equity—why tax wages at 39% while landlords evade? Amid Green calls for breadth and Alliance snoozes on ambition.

New Zealand faces a stark choice in 2026: back a CGT to realign with OECD peers and arrest our slide to 33rd out of 37 in global economic rankings, or endorse the status quo, perpetuating fiscal shortfalls, inequality, and further decline.

𝐀𝐧𝐚𝐥𝐲𝐬𝐢𝐬: Bruce Alpine

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