Wealth tax not ruled out - Finance Minister

The Minister of Finance has not ruled out the possibility of imposing a wealth tax.

Friday, October 28th 2022, 6:00AM 3 Comments

by Eric Frykberg

But Grant Robertson gave no indication that such an idea was actually being worked on and he said any changes would have to wait until after the next election anyway.

He also talked down the possibility of imposing windfall taxes, but indicated they could be applied in some cases. .

A wealth tax is an annual levy on a person’s net assets and applies in some European states.

It was also proposed by the radical American politician Bernie Sanders, and has been raised as a possible answer to the UK’s fiscal difficulties.

Robertson was asked if he would consider such a tax at a financial conference in Auckland.

He did not reject it, but did not indicate that it was being actively looked at either..

“We are still working on a tax policy for the Labour Party at the next election ….It hasn’t been finalised, so I am not in a position to say what it is,” Robertson replied.

“In New Zealand we have had a few cracks at what we might do to have a broader based tax system, but for this term, we have made the commitment that we have made (no new taxes) and we are sticking to that.”

Robertson was also asked about the possibility of applying a windfall tax to companies which make a sudden and unexpected profit, especially if they are a monopoly or duopoly.

Robertson expressed some doubt about that.

He said there were worries about duopolies and he cited New Zealand’s supermarkets as an example.

But he said there were other ways that this problem was being dealt with.

And he also discussed oil companies.

‘It is a little different (in New Zealand) from the United Kingdom where it is absolutely clear that the petrol companies have made massive windfall gains, Robertson said.

“When you look at New Zealand companies their profits have been very good during this period of time but not out of proportion to where they have been.”

Robertson made a similar comment regarding the profitability of banks. And he indicated that corporate tax was already high at 28% compared with other countries, and went some way to making companies contribute to state revenue..

Despite his scepticism, Robertson indicated windfall taxes could still apply, pending further analysis.

‘At this point, no (to windfall taxes) , but we definitely have our focus on those sectors where we do think that the nature of a monopolistic or duopolistic business is putting more pressure on New ZeaLanders generally,” he said.

“In the case of supermarkets, that is part of the picture and we are working on it.”

Tags: tax

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Comments from our readers

On 30 October 2022 at 2:46 pm Pragmatic said:

With all due respect to the author - I was also at the same conference and didn't walk away with any inkling that a Wealth Tax was on the table. When asked, Minister Robertson responded that it was too early to answer questions about their future tax packages. Without defending Robertson, I reckon that this is an appropriate response - although it doesn't suggest anything at this point.

On 31 October 2022 at 9:38 am Bikedude said:

So Grant, no new taxes right. What a bunch of con artists.

On 4 November 2022 at 9:51 am Dirty Harry said:

good logic there
fuel companies and banks have always made massive profits. Yes, recently they have been making more massively massive profits. But the massiveness is not out of line with how massive they have been.

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