Tax: what the PM hasn’t ruled out

Jacinda Ardern is not ruling out the possibility of tax changes while she is prime minister, despite discarding a capital gains tax policy.

Ardern said last week that she would not introduce a capital gains tax after the coalition Government appeared to struggle with the issue.

However, a spokeswoman for Ardern did not rule out her campaigning for a new income tax band at a higher rate of tax for very higher earners, either before or after the 2020 election, when given the opportunity to do so.

The spokeswoman also did not rule out an inheritance tax or any other alternative form of wealth tax during the prime minister’s tenure.

‘‘Labour’s tax policy for the 2020 election has not yet been determined,’’ she said on Wednesday.

The Government instructed the Tax Working Group not to consider an inheritance tax when it told it to review options for reforming the tax system last year.

The working group came out against any other form of wealth tax when it published its interim report in September, saying wealth taxes tended to be difficult to apply and there was an ‘‘international trend’’ away from them.

The Tax Working Group was also asked not to consider any increases to income tax or GST.

Finance Minister Grant Robertson suggested on Tuesday that Labour would not go into the 2020 election campaign with a tax policy that was completely bare.

Robertson said he was disappointed the Government had not been able to make a CGT happen and promised that the Labour Party would still be campaigning on some sort of tax policy.

Ardern’s spokeswoman said any measures taken regarding the tax system by the Government ‘‘would, of course, be aimed at increasing fairness’’.

National Party leader Simon Bridges responded that Labour was ‘‘clearly out to grab more money from taxpayers’’.

‘‘They’ll be looking for a way to make up for not being able to introduce a gains tax,’’ he said.

‘‘Make no mistake – you can’t trust Labour on tax.’’

Bridges entered a member’s bill into a ballot on Tuesday that would force governments to index-link income tax brackets or to explain why they were not doing that.

The default would be that the tax bands at which higher rates of income tax kick in would rise every three years, to take inflation into account, meaning the Government would collect less tax.

Bridges said Kiwis would pay $650 million a year less in tax after the first adjustment required by the bill, based on today’s estimates, which he said was affordable if the Government ‘‘managed its books wisely’’.

The member’s bill will join 72 other bills submitted by MPs in a ballot, which is drawn periodically from a biscuit tin in a practice introduced in the 1980s.

‘‘You can’t trust Labour on tax.’’ National Party leader Simon Bridges