It’s not a tax, it’s a levy! National and Labour swap lines on LNG terminal spat
Tuesday, 10 February 2026
OPINION: Over its six years in opposition, National had a pretty good strategy for any new cost imposed by the Government: Call it a tax.
The feebate on cars? You mean the “ute tax”! A special fee added to international airline tickets? That’s a “tourist tax”! Unemployment insurance? Jobs tax!
Even in Government Prime Minister Christopher Luxon has largely stuck to it ‒ relentlessly attacking proposals to add a levy to hotel stays as a “bed tax”. Who can blame him ‒ any new cost imposed by Government is quite reasonably understood as a “tax”.
But that all changed on Monday as Luxon announced a plan to build a new billion dollar plus liquefied natural gas import facility, funded by, you guessed it, a levy.
Read more:
Fact check: How much cover could LNG provide for a ‘dry year’?
Government plans levy on power users to pay for $1 billion LNG import terminal
“This is not a tax, it’s a levy. It is a levy to fund a key piece of infrastructure,” Luxon explained as reporters asked whatever happened to his “no new taxes” pledge, echoing Grant Robertson perfectly.
Luxon seemed somewhat surprised by the negative framing immediately applied to the policy. To be fair to him, he cited economic analysis that suggested power users would save money over time as backup LNG made it easier to run the lakes down lower, leading to a net benefit that overwhelmed the levy.
Then, the analysis on “ute tax” showed a net benefit for the country over time too through massive savings on fuel. And Luxon didn’t help his case by refusing to estimate just how much the levy would be in public, despite the fact the Government figures in its own release suggest it will be somewhere between $15 and $30 a year for the average ‒ not a nice impost but hardly an impossible to swallow one, even in these straightened times.
Labour leader Chris Hipkins, a veteran of many of these fights, was happy to turn the tables on National and immediately label the plan a “gas tax”. He is in opposition after all, and Labour seems to have a properly different view on how it might attack the “dry year” problem the Government is addressing here ‒ the problem that sees structurally high electricity prices thanks to the vagaries of the water levels in our hydro dams.
I say “seems” because Labour has been frustratingly vague on its energy policy in opposition, attacking the Government from a multitude of directions but never quite offering much of a solution themselves.
But Hipkins took his attacks on this policy a bit further than usual. Perhaps conscious of the disdain the public has for the big energy companies likely to announce huge profits in coming days, he left the door completely open to both breaking up the gentailers and tearing up the contract for this LNG scheme before it even got going.
Hipkins has been careful this term to avoid talk of cancelling big investments the Government has got in plan, saying over and over again the country can’t afford to just go backwards every time the Government changes. It’s been a useful way to both appear “mature” to international capital wary of investing in a country with such small electoral terms and attack Finance Minister Nicola Willis over her cancellation of the ferry contracts.
Hipkins refused to offer any such assurances on Monday, saying the whole situation was still too far hypothetical for him to offer any assurances of that nature.
“You’re asking me to make a comment on a contract that we have not seen, that is not currently in existence with a company who haven't yet identified themselves. So those are hypothetical questions,” Hipkins said.
Given he was speaking as the leader of the most popular party in Parliament just hours after a new poll suggested the election might return a complete deadlock, Hipkins’ words have real weight here.
Time will tell if it’s just a diversionary tactic to keep the Government on its toes, or a sign that Labour has a properly different energy policy to bring to the table, one more focused on batteries or new generation or something else.
Until then, I guess we’ll just argue about whether it is a tax or not.