LABOUR'S CAPITAL GAINS TAX POLICY: A MEANINGLESS GESTURE THAT CHANGES NOTHING

Labour’s capital gains tax announcement is not a bold step toward economic justice, but a timid, business-friendly gesture that leaves the economic status quo intact. Are we surprised?


THIS BLOG has long warned that under leader Chris Hipkins, Labour will continue on its dire centrist course. Its capital gains tax announcement is yet more evidence that the party has no intention of addressing the structural crisis facing working people and instead will tinker at the margins of a system that has already failed. When a bold and visionary step toward economic and social justice is needed, Labour has delivered a timid, business friendly policy that leaves the economic status quo intact. 

Green Party co-leader Chloe Swarbrick is dead right to describe this policy as 'watered down' and 'falling well short of meeting the needs of New Zealanders.' Does Labour really think the Green's will meekly accept this policy? It would be risking political suicide if it did.

The policy is narrow, riddled with exemptions, and deliberately avoids touching the vast pools of wealth that have been accumulated through decades of speculation and privatisation. It is less a challenge to entrenched inequality than a signal to capital that Labour remains a safe pair of hands. We had enough of that under the Jacinda Ardern-led Labour Government, but Chris Hipkins wants to serve up this thin gruel again. 

The problem is not simply that the tax is too small to make a difference. It is that Labour has once again chosen to frame inequality as a matter of minor imbalances rather than systemic exploitation. By limiting the scope of the tax, the party reinforces the idea that wealth accumulation through property and financial speculation is legitimate, even virtuous, so long as a token slice is skimmed off the top. This is not redistribution—it is window dressing.

Working people know the reality. Wages have stagnated while rents and mortgages soar. Public services are underfunded, privatised utilities extract monopoly profits, and the cost of living crisis has become a permanent feature of life. Against this backdrop, Labour’s timid capital gains tax is not just inadequate—it is insulting. It tells workers that their struggles will be met with symbolic gestures while the wealthy continue to enjoy structural privileges untouched.

The business-friendly nature of the policy is no accident. Labour has long been more concerned with calming the nerves of the financial sector than with mobilising working-class anger. The party leadership couches its proposals in the language of 'balance' and 'stability,' but what this really means is protecting the interests of landlords, banks, and corporate investors. The capital gains tax is designed not to disrupt, but to reassure: a signal that Labour will not rock the boat.

A genuine left-wing alternative would start from a very different premise: that inequality is not a glitch in the system, but the system itself. To address it requires more than tinkering—it requires transformation. Instead of a token capital gains tax, we need a comprehensive wealth tax that targets the vast fortunes accumulated through speculation, inheritance, and monopoly control. Such a tax should be paired with measures to close loopholes, end trust-based tax avoidance, and ensure that wealth hoarded offshore is brought back under democratic control.

But taxation alone is not enough. A left alternative must also confront the ownership question. Housing, energy, and essential infrastructure should not be left in the hands of private profiteers. Public ownership of utilities, large-scale state-led housing construction, and rent controls are essential to break the stranglehold of landlords and corporations. These measures would not only reduce costs for working people but also shift power away from capital and toward the public.

Equally important is the need to democratise the economy itself. Workers should have a direct say in how industries are run, through expanded union rights, workplace democracy, and cooperative ownership models. Instead of relying on the 'confidence' of business, a left programme would build confidence in the collective power of working people to shape their own economic future.

Critics will say this is unrealistic and 'pie in the sky' stuff, that such measures would scare off investment or destabilise the economy. But the truth is that the current model is already unstable. Decades of neoliberal policy have produced housing bubbles, financial crises, and deepening inequality. The timid reforms of Labour will not prevent the next crisis—they will merely ensure that when it comes, working people once again bear the cost.

The choice is stark. We can continue down the path of managed decline, where timid reforms mask the deepening rot of a system designed for the wealthy. Or we can demand a politics that is unapologetically on the side of workers: taxing wealth, reclaiming public ownership, and building an economy based on solidarity rather than speculation. Labour’s capital gains tax is a reminder that the party has chosen the former path.