Kerre Woodham: We finally have tax promises from both major parties

Yep, it was all about taxes over the weekend. Labour pinned its colours to the mast over the weekend and wants to tax more to spend more. Taxman from the Beatles was written by George Harrison in 1966 when Harold Wilson came to power in Britain.

He imposed a super tax of 95% on the extremely wealthy, of which the Beatles were on paper, but their accountants warned them they were about to become bankrupt. 95% tax. Labour does not want that in 2026 in New Zealand, but they do want to tax more to spend more.

As Henry Cooke wrote in the Post, Labour is a social democratic party. It wants the state to be a large part of the economy and it wants the state to worry more about employment. They are comfortable with core crown spending and revenue aligning at about 33% of the economy. National wants 30% And you might think, oh, 30 33 what's the diff? Well, the difference between these two targets is not there or thereabouts when you consider every 1% of GDP is worth around $4.35 billion.

So it'll mean two very different ways of managing the country and running the economy depending on who's in charge. Barbara Edmonds over the weekend and Chris Hipkins were speaking to their tax policy and it's good to finally see it because people now know they have a clear choice. We also heard on the Mike Hosking Breakfast this morning the Labour leader outlining exactly how the CGT will work to fund the many promises Labour has made.

Once the capital gains tax is fully implemented, we're expecting government spending as a percentage of GDP to settle at around 33% of GDP. So that is it is higher than what the National Party are estimating. We're not putting a particular we're not setting a deadline for it or anything, but it is a it is an indication that we don't expect to go higher than that.

The 1.35 billion on the CGT based on what? This is still the Treasury 4% number?

No, it's based on a 3% when we when we set out the CGT we set it out at 3% so we were deliberately conservative on that. And it's 3% over time, so obviously with the capital gains tax the revenue in the early years is lower than the revenue you get as the longer the capital gains tax is in place.

That was Chris Hipkins talking the CGT on the Mike Hosking Breakfast. Labour's also promising a return to surplus in the 29 30 financial year while pledging to restore the Reserve Bank's dual mandate so employment levels are considered in monetary policy decisions, which is all very well and good, but didn't help us back when they did have the dual mandate, did it?

Over the weekend National too made their party's position very clear: no new taxes. So no bed tax, which we were discussing last week to help fund regional tourism. No bank tax, despite Nicola Willis announcing a levy on banks in Budget 26 which she said would gather about 200 million over the few years. Over the weekend she said she was concerned and the reason she'd pulled back from announcing that levy tax that any new taxes would simply be passed on to Kiwis. If she taxed the banks they'd pass it on to consumers and she didn't want that.

It's becoming a clearer and clearer choice. Labour wants to tax more to spend more. You have to tax more. Where else are you going to get the money from? And if you tax more you have to hope that they will deliver more because it's all very well and good taking the money, but then it has to be spent wisely and judiciously. National says we can't afford to do much. If we wanted to do more we'd have to tax you more and we don't want to do that. So it means that some of the nice to haves won't be funded.

So do you go with more tax, more spending on the part of the government so they will do the spending for you? Do you want less tax and less money for the nice to haves? Or a pox on both their houses as we've seen in a number of political polls and a vote for the Opportunity Party? Because that's an option too.

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