The Alliance Party says the Labour Party’s leaked capital gains tax (CGT) policy fails to address Aotearoa New Zealand’s profound inequality and infrastructure crisis.
Alliance spokesperson Tom Roud says Labour’s plan is a weak and compromised effort that continues the “long snooze of Chris Hipkins.”
He says New Zealanders are crying out for bold leadership and alternatives to the disastrous recession created by the ACT-dominated Luxon Government.
“Jacinda Ardern and Chris Hipkins both undermined tax reform, and after years of wasted time we are now underwhelmed by this policy.”
The Labour CGT policy will not remotely generate the revenue to restore quality public services and national infrastructure, he says.
Labour has opted for a narrow 28 percent tax on profits from the sale of properties only, specifically excluding the family home and farms. Labour has also ruled out pursuing a wealth tax.
Alliance spokesperson Tom Roud says the narrow focus of the proposed tax avoids tackling the issue of unproductive wealth.
“Labour’s CGT policy fails to deliver the reform needed to truly fund our society,” says Mr Roud.
“The chronic underfunding of our physical and human infrastructure, which is behind the recent nationwide public sector strike, is a direct result of tax policies that prioritise lowering taxes on the wealthy and starving essential spending.”
Mr Roud says Labour has backed public sector workers, but this has now been revealed as a shallow performance that is not backed by resources.
“Labour cannot bridge the infrastructure and public services gap with this weak policy and its MPs know it. They should be ashamed of falling into line behind this.”
He says the Alliance rejects the current tax system that unfairly burdens people who earn income from wages or salary rather than assets.
The Alliance calls for a complete overhaul of the tax system. This full transformation, necessary to lift the tax burden from working people and tax unproductive wealth, must include three critical elements:
1.Capital Gains Tax (CGT): The Alliance advocates for the introduction of a comprehensive CGT. The family home is exempt.
2.Wealth Tax: The Alliance advocates includes the introduction of an inheritance tax on large inheritances and restoring a land tax, with exemptions for private residential homes, farmland, Crown conservation estate, and Māori Customary land.
3.Financial Transaction Tax (FTT): The Alliance supports implementing a Financial Transaction Tax (FTT) to tax financial speculation.
In turn, these taxes would also be used to progressively replace flat taxes like GST which harshly hits those on low and fixed incomes.
The Alliance would implement a more progressive income tax regime, providing income tax cuts for many New Zealanders and increasing taxes for those on higher incomes such as senior managers and Cabinet Ministers.
This comprehensive approach would generate revenue needed to properly fund public health, education, and transport systems, ensuring access to quality, free services for all New Zealanders and help to rebuild our crumbling infrastructure.
“The Alliance is dedicated to a tax system that builds a New Zealand where all working people can enjoy secure work, free healthcare, and a strong society for the common good,” says Mr Roud.