UNDER LABOUR, LANDLORDS WILL STILL BE 'LAUGHING ALL THE WAY TO THE BANK'

Despite Finance spokesperson Barbara Edmonds describing the policy as 'solely benefiting the wealthiest New Zealanders', Labour says it will continue to give landlords a $3 billion tax break if elected in November. 

 

LABOUR'S RETREAT on interest deductibility for landlords is not an aberration or a momentary lapse in judgement; it is the party reverting to type. Despite its endlessly repeated claim to represent working people and the poor, Labour has spent decades proving that when confronted with the interests of capital, it folds. It folds quickly, quietly, and with a kind of resigned obedience that reveals how thoroughly it has internalised the logic of the economic order it claims to oppose. The announcement that Labour will not remove the landlord interest-deductibility tax break if elected in November is simply the newest confirmation of that long-running pattern.

What makes this reversal so stark is that Labour has spent months condemning the policy as a grotesque handout to the wealthy. Finance spokesperson Barbara Edmonds was explicit: the Coalition Government, she said, had chosen to give 'approximately 346 landlords who own at least 200 properties each around $464 million between them.'

She framed it as a moral failure, a sign of a government whose priorities were 'mega-rich landlords' rather than school lunches, smokefree legislation, or the Cook Strait ferries. She described the policy as 'solely benefiting the wealthiest New Zealanders.' Yet Labour now intends to keep it. The party has moved from denunciation to acceptance.

The Greens, too, will now face a test of their own political courage. Housing spokesperson Tabatha Paul has been unequivocal in her criticism of the tax break, calling it a $2.9 billion gift to landlords 'at a time when rents are skyrocketing and families are struggling to put food on the table.” She said landlords were 'laughing all the way to the bank.' If Labour is determined to keep the policy, will the Greens fall in line? Will they join Labour in the laughter? Or will they finally confront the reality that Labour is not a vehicle for transformative change but a brake on it?

What makes Labour’s decision even more dismal is the moment in which it has arrived. The public mood has shifted. Years of austerity, followed by a cost-of-living crisis and a dramatic surge in inequality, have eroded the legitimacy of the economic status quo. People are sceptical—often openly hostile—toward political parties that continue to defend a system that transfers wealth upward while leaving ordinary people to absorb the shocks. The appetite for real change is stronger than it has been in decades. Yet Labour, instead of responding to that shift, has chosen to double down on its support for the very order that created the crisis.

This is the tragedy of Labour’s political imagination. If Chris Hipkins and his colleagues will not take on the power of capital, they will inevitably concede to it. And capital’s demands—like a $3 billion tax break for landlords—are fundamentally incompatible with the needs of ordinary people. Labour cannot even stomach the smallest step in the opposite direction. Removing a tax break for wealthy landlords is not radical. It is not revolutionary. It is barely reformist. Yet even that is too much for Labour.

The consequence is predictable. Labour’s refusal to stand up to capital becomes a refusal to stand up for ordinary people. It is no surprise that Labour’s support has fallen below 30 percent of the electorate that still bothers to vote. People understand, instinctively and through experience, that under a Labour-led government their lives will not materially improve. Labour has just proved that again by cosying up to the landlord class. It has shown that when forced to choose between the interests of workers and the interests of property owners, it will choose the latter every time.