Neil Sands
Labour finance spokeswoman Barbara Edmonds has railed at “unfair” and “wrong” elements of the tax system, but declined to say if she believes introducing a capital gains tax is way to address her concerns.
However, Edmonds did rule out means-testing superannuation or raising the eligibility age for super from 65, saying she will instead prioritise boosting retirement savings via the KiwiSaver scheme if Labour wins next year’s election.
“We don’t want to change the superannuation rules at the moment – how you access it, whether it’s means tested, the age,” Edmonds told a TLANZ function in Auckland on Wednesday.
“My view is we need to raise KiwiSaver first – raise general, personal savings first – then another government might look at that [super changes] in the future.”
TLANZ CEO Clayton Kimpton, Hon Barbara Edmonds, TLANZ President Tony Herring
Edmonds, who was a tax lawyer before entering politics and has also operated a small business, said she was working on a suite of policies that would support wealth creation and appeal to small and medium-sized enterprises (SMEs).
“If I’m frank here, to be really political, it is a ripe area for Labour to actually come out with a strong small business policy,” she said. “I think it’s an area where we can actually help to swing some voters towards us.”
Edmonds said she was considering initiatives to improve small businesses’ access to capital as part of Labour’s platform, which will be rolled out in late 2025-early 2026, ahead of an election in the final quarter of next year.
Devil in the detail
Most attention will be focused on Labour’s tax policy, particularly given party leader Chris Hipkins’ decision to rule a capital gains tax in the 2023 campaign, and Edmonds gave an overview of the issues she was considering.
“I’m not going to give away whether I prefer a capital gains tax, or a wealth tax, or a land tax, or inheritance tax, or stamp duty. I’m not going to talk about that in general,” she said. “But just the fact that some forms of capital are not taxed because we don’t treat it as income is, I think, wrong.”
She questioned the difference in the way gains from income are treated under the current regime compared to gains from investment property.
“Ultimately, for me as a Labour person, I think how is it fair that a salary and wage earner – that nurse, that teacher, that police officer – every dollar of income that they raise through their job is taxed. But a person can sell their third, fourth or fifth residential investment property and that’s not taxed.”
Edmonds said that whatever tax policy Labour campaigns on will have been meticulously prepared by a group of tax experts, adding: “I know that if you change something in tax, it may have unintended consequences somewhere else.”
“I will look really foolish if I announce a tax policy which I know won’t work. I’d also look really foolish because I’m a tax lawyer,” she said.
“So for me, understanding both the implementation side, particularly knowing what IRD can and can’t do, how a self-assessment regime works …. I’m really clear that we need to work through the detail of that.
“What you might hear in an announcement is very high level because as politicians, we need to speak to the general public, but the devil’s in the detail. We’ve got a very small group of very, very experienced practitioners who are helping us work through it.”
Own goals
Edmonds appeared sceptical about making KiwiSaver compulsory for employees, pointing out that more than 90% of wage and salary earners were already enrolled in the scheme.
She said work was underway to compare savings schemes in different countries to consider what might be suitable for New Zealand.
On the broader economy, Edmonds acknowledged the constraints on public finances and said Labour would adopt a strategy of targeted investment, encouraging growth in innovative areas.
“I’m an evidence/data person. I’m also very conservative when it comes down to it… ultimately, when we have government money, I need to be able to see evidence and data that will support our argument about why we’re taking a risk,” she said.
Potential areas for government investment included agri-tech, renewable energy, advanced medical equipment, gaming, robotics and other elements of the so-called creative economy.
Edmonds acknowledged that Labour was likely to face a government scare campaign based on whatever tax policy it takes to the election, but she said the party was prepared and the policy would form part of a credible platform that the public was ready to embrace.
“People are [saying] ‘I’m not actually doing as well as I was maybe 18 months ago. I’m finding it hard to get a job, I’m looking for an alternative.”
Until Labour’s policies are released, Edmonds said she was content for the public’s focus to be on the government and its handling of issues such as the controversial pay equity reforms.
“There’s a lot of noise at the moment, but the noise is on the government side and what they’re saying,” she said. “Some people say that when somebody’s kicking own goals, you
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