Labour leader Chris Hipkins. Photo: RNZ / Mark Papalii
Labour has agreed to campaign on a capital gains tax (CGT) covering just property - excluding the family home and farms - to help fund three free doctor visits for everyone.
The policy was announced abruptly on Tuesday morning after RNZ was earlier leaked details over the long weekend.
RNZ understands the plan was approved by the Labour caucus in a near-unanimous vote, ending months of internal debate over whether to pursue a wealth tax or a CGT.
The caucus and party council have settled on the latter, signing off on a 28 percent tax on profits from the sale of properties only, excluding the family home and farms.
The policy would kick in from July 2027 and would not be retrospective.
Labour has paired the tax announcement with a new healthcare initiative, showing how the revenue could fund three free GP visits a year for everyone via a "Medicard" scheme.
Every New Zealander would receive a Medicard at birth or upon gaining residency or citizenship. It would be integrated with existing GP systems and track entitlements and usage.
An RNZ-Reid Research poll last month found 43 percent in support of a CGT on investment properties, with 36 percent against and 22 percent undecided.
The recent tax debate has been a fraught one for the party, going back to Hipkins' call before the 2023 election to rule out introducing either a wealth tax or CGT as prime minister.
That decision prompted the then-revenue minister David Parker to quit his role in protest.
Hipkins' first announcement after Labour's election loss was to put all tax options back on the table, promising a "blank page" for policy. But he has also been open about his preference for a CGT over a wealth tax.
At last year's party conference, members agreed to continue developing both options, leaving the final call to the policy council and caucus.
Labour's vexed history with capital gains tax stretches back more than a decade.
Former prime minister Jacinda Ardern abandoned a broader CGT in 2019 after failing to win over coalition partner NZ First and then vowed never to revisit it while leader.
Earlier attempts under Phil Goff in 2011 and David Cunliffe in 2014 also proved politically costly.
In recent months, Hipkins has come under pressure to show more policy direction. National has accused Labour of offering only criticism and no fresh ideas since the election.
Labour ventured back into the policy arena last week, unveiling three separate initiatives with varying success.
Its "Future Fund" proposal found cautious support from Infrastructure NZ and economists, but business groups largely reserved judgement due to the lack of detail.
Hipkins fumbled the second announcement - a new approach of funding GPs - refusing questions from reporters, not realising the details had already been made public.
Labour also announced plans to expand taxpayer subsidies for New Zealand's video-game industry.
'Tall poppy'
Deputy Prime Minister and ACT leader David Seymour labelled the policy "divisive".
He told First Up New Zealand had comparatively high tax revenue, and taxed a higher percentage of the economy than the average OECD economy.
"It's not that New Zealand lacks government revenue. It seems to be about that old chestnut, the tall poppy."
Seymour said the policy is presented as someone else having to pay to solve problems in New Zealand.
It seemed every couple of years there was a different group of people deemed to have caused a problem and "has to be taxed or punished in some way", he said.
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