Labour inches closer to wealth tax or CGT after membership vote

Labour leader Chris Hipkins. His party voted today to take forward work on a capital gains or wealth tax. Photo / NZME

• The Labour Party is holding its annual conference in Christchurch this weekend.
• On Saturday Labour members voted to endorse the party doing further work on a capital gains or wealth tax policy.
• More proposals will be debated on Sunday

The Labour Party has inched closer to campaigning on a wealth tax or capital gains tax at the next election after members today passed a proposal to move the idea forward.

Party members have engaged in tense discussions on tax after leader Chris Hipkins decided to stop work on a wealth tax that would have been included in the Labour Government’s 2023 Budget.

Labour members up and down the country have since been debating the issue of tax with a view to passing a proposal – often called a remit – at the party’s national conference in Christchurch this weekend.

On Saturday, the party’s policy council led a conversation on a proposal which would take forward work on a capital gains tax or a wealth tax and to stop work on other forms of tax like fair dividend rate and inheritance taxes. After a debate, the proposal passed.

The vote will probably be seen as a vote of confidence in Hipkins.

Despite the fact that Hipkins killed Labour’s wealth tax proposal in 2023, he swiftly pivoted to be in favour of a more “progressive” tax platform for the party’s 2026 election bid. There was a chance the proposal would be significantly amended to something that was far more difficult for Hipkins to live with, which could have been seen as a vote of no confidence in his ability to take the tax policy forward.

This did not transpire, a signal that members are, for now, behind Hipkins on the issue of tax.

The remit means that Labour members have endorsed the party doing further work on both of these taxes, making it likely, though not inevitable, that one ends up in the party manifesto for the 2023 election.

Labour members vote on the party’s policy platform, which is the broad “bible” of policy ideas to which the party must adhere. Each election, the party policy council, caucus, and governing NZ Council put together the party’s manifesto of specific policy ideas from this “bible”. The manifesto must be consistent with the policy platform.

Other proposals will be debated on Sunday, including potential amendments to Labour’s constitution.

Thomas Coughlan is Deputy Political Editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.