Labour doesn’t rule out taxes from Greens’ $89b plan, will address policies ‘closer to election’

Labour leader Chris Hipkins is refusing to rule in or rule out elements of the Green Party’s alternative Budget, which National’s Nicola Willis believes “is a real sign of how far they have departed from economic common sense”.

Hipkins was asked repeatedly on Wednesday for his views on the Green Party plan. He would most likely require support from the Green Party to form a Government in the future, meaning he would have to negotiate policies with them. The Greens say Labour was given a heads-up about the plan, but was not provided the detail beforehand.

“I have just seen the headlines. I haven’t actually had a chance to look at it. If you have questions on that, best direct them to the Greens,” the Labour leader said.

“We will set out our alternative fiscal plan prior to the election. I think it is a bit too early to do that for us yet as there are two Government Budgets to go before then.”

Asked specifically if he could rule out any aspects of the plan, which seeks to raise $88.9 billion in new revenue including through multiple new taxes, Hipkins refused to.

“We will set out our tax policy this year. That will be very clear about what is in or what is out from our perspective,” he said.

Labour’s tax policy is expected to include a capital gains or wealth tax in its manifesto for the 2026 election.

When the Herald put to Hipkins that he will have to start ruling policies in or out – as National has previously had to do with its potential coalition partners – he said he would do that “closer to the election”.

He expected to read the Greens’ plan “in due course”, noting the party had only released it a few hours prior to him speaking to reporters.

But that didn’t stop National from attacking Labour.

“They are now on the train to the clown show. If they will not rule it out, they are saying they are prepared to govern like a circus,” Willis, National’s finance spokeswoman, told the Herald.

“That is almost a Soviet manifesto in terms of the confiscation of wealth, income and business that it promotes. For Labour not to rule it out, is a real sign of how far they have departed from economic common sense. [Former Labour Finance Minister Sir] Michael Cullen would turn in his grave to see Labour even consider policies this radical and this stupid.”

Among the proposals from the Greens is reinstating the 10-year bright-line test, banning interest deductions for residential property, raising the companies tax, bringing in a new income tax rate, doubling mining royalties and taxing private jets.

The party’s overhaul of the tax system is expected to generate nearly $89b, the vast bulk of which comes from a wealth tax. That would see individual net wealth over $2 million taxed at a rate of 2.5%, with 1.5% on assets in private trusts to prevent tax avoidance.

The revenue would help fund free GP and nurse visits nationwide, free dental care, community care clinics in high-need areas like South Auckland, an expansion of 20-hours free childcare, an income guarantee for students and the unemployed and several other policies.

The party also promises significant borrowings for investment not funded by taxation. The borrowings would take net core Crown debt to 53.8% of GDP by the end of the decade. In 2019, Treasury said debt-levels below 50-60% of GDP were prudent for New Zealand and warned that higher debt would make it more challenging to borrow during economic shocks such as earthquakes.

“This is a Budget for a country that belongs to and works for New Zealanders,” Green Party co-leader Chlöe Swarbrick said.

“We believe in fairness and common sense. A Green Government will rapidly reduce emissions, reduce the cost of living and improve our quality of life.”

Greens co-leader Marama Davidson said her party had given Labour a “heads-up” about the plan but “we didn’t go into detail”.

They hadn’t had any conversations with Labour about what policies it might accept, Davidson said.

“We know it is the people who have the power to choose this plan. We know it is going to be hard. We know we are breaking some awesome ground here in putting out a Green Budget that shows we can actually take care of everyone and that is why it is important we affirm that power of the people in getting out across communities to talk about that.”

The Labour Party has previously said whether it supports a potential coalition partner’s policy or not. For example, in April, it said it would not support targeting New Zealand Superannuation eligibility on the basis of ethnicity, as Te Pāti Māori proposes. In February, Hipkins ruled out a Te Tiriti parliamentary commissioner with a veto to overturn decisions.

‘The whole thing is madness’

The Government parties were predictably critical of the Green Party plan, with the Prime Minister calling it “clown-show economics”.

“It’s an absolute circus. The Labour Greens prescription is pretty much the same. It’s going to be tax more, borrow more, spend more,” said Christopher Luxon.

Luxon said that “is literally loading that up on our kids and our grandkids” and didn’t believe Labour’s economic policy would be any different.

“The whole thing is madness. I mean it’s totally mad.”

Willis issued a statement trying to tie the Greens and Labour together.

“The mind boggles that – even in these economic times – Labour and the Greens are hellbent on confiscating wealth and income from hard-working Kiwis and returning to the bad old days of more tax and inflationary spending that wrecked the economy,” she said.

“That’s even before you bring Te Pāti Māori’s absurd circus into the mix.”

Act said the Greens were in a “fiscal fantasyland”.

“A private jet tax isn’t a serious policy proposal; it’s an empty display of the Greens’ eat-the-rich mentality,” said leader David Seymour.

“They want us to believe all our problems are caused by other people’s success, because they can’t be bothered coming up with any ideas that would generate new wealth to meet our country’s challenges.

“The left’s ideas are all about telling successful New Zealanders ‘you’re not welcome here’, dividing the wealth we have rather than creating more, and siphoning off more money for the Wellington bureaucracy. It all adds up to a poorer, more miserable New Zealand.”

Asked what he thought, NZ First leader Winston Peters showed reporters a picture of the Soviet Union flag.

“Unbelievable. It is not socialist, it is Marxist,” he said.

He said New Zealand would become Venezuela or Myanmar if the Greens were in power, but wouldn’t address the specific aspects of the tax plan.

“I am not going to respond to some communist, Marxist [plan].”

Later in the House, Peters tried to ask the Prime Minister about the Green Party plan, to which Swarbrick yelled out, “free advertising” and the Green Party applauded.

Jamie Ensor is a political reporter in the NZ Herald Press Gallery team based at Parliament. He was previously a TV reporter and digital producer in the Newshub Press Gallery office.