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“Labour's Tax Betrayal: How Chris Hipkins Chose Capital Over Community” - 3 August 2025

The wealthy's favourite lap-dog is barking again, and this time it's wearing a red rosette.

Ivor Jones The Māori Green Ltn

03 Aug 2025 — 15 min read

Kia ora, whānau. Kia haumaru tātou katoa - greetings everyone, may we all be safe.

Labour's policy council has reportedly chosen to pursue a capital gains tax over a wealth tax by the narrowest of margins1, prioritising a slower, weaker tool that will take years to generate meaningful revenue while continuing to coddle the mega-wealthy who pay less than half the tax rate of working families2. This represents a fundamental betrayal of Labour's supposed values and yet another capitulation to the neoliberal orthodoxy that has hollowed out Aotearoa's communities for decades.

The Neoliberal Shell Game Continues

The background to this capitulation reveals the rotten core of Labour's relationship with wealth and power. When David Parker and Grant Robertson developed comprehensive wealth tax plans for the 2023 Budget, they understood what the data clearly showed - New Zealand's wealthiest 311 families, with average net worth of $276 million, pay an effective tax rate of just 9.4% while middle-income New Zealanders pay 20.2%23. This obscene inequality represents the success of four decades of neoliberal policy designed to transfer wealth upward while loading the tax burden onto working families.

Yet when push came to shove, Chris Hipkins kiboshed the wealth tax plan1, demonstrating that Labour's commitment to "fairness" evaporates the moment it threatens the portfolios of the property-speculating parasite class. Vernon Small, the journalist-turned-Labour-advisor writing this opinion piece1, represents the revolving door between media and political power that ensures the wealthy's interests are always protected by a chorus of "reasonable" voices advocating for "moderate" solutions that change nothing fundamental.

The Issue That Dares Not Speak Its Name

Tax rate comparison showing wealthy New Zealanders pay 9.4% while middle-income earners pay 20.2%

This deliberate choice by Labour to pursue capital gains taxation over wealth taxation exposes their complete subservience to neoliberal ideology. A capital gains tax, as Small accurately notes, "would deliver much less revenue initially" and "takes a long time to build revenue"1. This isn't a bug in Labour's thinking - it's a feature. By choosing the slower, weaker option, Labour ensures that their wealthy donors and supporters can continue extracting maximum value from property speculation and financial manipulation for years to come.

The data demolishes any pretense that this is about "fairness" or "economic efficiency." Research shows that New Zealand has the lowest income tax rates for wealthy individuals among comparable OECD nations4 5. While wealthy New Zealanders pay just 33% on high incomes, their peers in Australia pay 37%, Canada 42%, and Germany 55%4. We are literally operating as a tax haven for the global wealthy while our own people struggle to afford housing, healthcare, and education.

OECD income tax rate comparison showing New Zealand has the lowest rate at 33%

The choice of capital gains taxation over wealth taxation represents a masterclass in manufacturing consent for continued inequality. The wealthy, their accountants, lawyers, and political representatives have spent decades constructing a narrative that wealth taxes are "complicated" and "unfair" while capital gains taxes are "reasonable" and "internationally normal." This narrative obscures the fundamental truth that both taxes would primarily affect the same ultra-wealthy minority who have captured New Zealand's economy.

CPA Australia's recent submission calling for capital gains taxation6 reveals how professional organisations representing the tax-preparation industry have been co-opted into advocating for policies that increase their own revenue streams while maintaining the fundamental architecture of inequality. A capital gains tax creates more work for accountants and lawyers, generating professional fees while leaving the core structure of wealth accumulation untouched.

The timing of this policy shift is particularly revealing. Labour's decision comes as Māori communities face ongoing attacks on co-governance arrangements, social services are being cut, and working families struggle with the cost-of-living crisis created by decades of property speculation and financialisation. Rather than addressing the root causes of these problems by taxing the wealth that was extracted from our communities, Labour chooses to protect that wealth while implementing a tax that won't meaningfully reduce inequality for decades.

The Colonial Mathematics of Extraction

This tax debate cannot be separated from the colonial mathematics that have governed Aotearoa since 1840. The Native Land Court, established through the Native Lands Acts of 1862 and 1865, was explicitly designed to "destroy, if it were possible, the principle of communism upon which their social system is based"7. The court's operations transferred millions of acres of Māori land to Pākehā settlers and speculators, creating the foundation of today's property-owning elite.

The wealth that Labour now refuses to tax appropriately was built on this massive transfer of Māori assets to colonial settlers. When Simon Bridges declared that any Māori exemption from capital gains tax would be "unfair"8, he revealed the white supremacist logic that refuses to acknowledge how settler wealth was accumulated through state-sanctioned theft. A truly decolonising approach to taxation would recognise that much of the "capital gains" being protected by Labour's weak-sauce policy represents the ongoing fruits of colonial dispossession.

Te Pāti Māori's comprehensive tax policy, which includes a wealth tax rising to 8% on assets over $10 million alongside land banking and vacant house taxes9 10, demonstrates what genuine commitment to tax justice looks like. Their policy would redistribute $16.4 billion annually while providing tax-free thresholds for working families. Labour's rejection of similar policies reveals their fundamental alignment with the colonial project of wealth extraction from Māori and working communities to benefit the property-owning elite.

The Māori Green Lantern fighting misinformation and disinformation from the far right

Implications for Our Communities

The implications of Labour's capitulation extend far beyond tax policy. By choosing capital gains taxation over wealth taxation, Labour signals that they remain committed to the neoliberal project of protecting accumulated wealth while shifting tax burdens onto workers and consumers. This choice will perpetuate the housing crisis by failing to meaningfully discourage property speculation, maintain the incentives for financialisation over productive investment, and ensure that wealth inequality continues to grow.

For Māori communities specifically, this represents a continuation of colonial policies that protect Pākehā wealth accumulation while refusing to address the structural racism embedded in New Zealand's economic system. The effective tax rates paid by wealthy families - many of whom built their fortunes on land stolen from Māori - remain lower than those paid by minimum-wage workers struggling to survive in overpriced rental markets.

The research showing that wealthy New Zealanders pay lower tax rates than their peers in other developed countries4 5 exposes the lie that we are a progressive, egalitarian society. We have constructed a system that operates as a tax haven for the global wealthy while imposing crushing tax burdens on working families through GST, rates, and inflated housing costs.

Labour's choice of capital gains taxation over wealth taxation represents a fundamental betrayal of the communities they claim to represent. By prioritising the interests of property speculators and financial manipulators over the needs of working families, they reveal their complete capture by neoliberal ideology and their abandonment of any commitment to genuine equality.

The data is clear, the moral case is overwhelming, and the international examples prove that comprehensive wealth taxation is both feasible and effective. Labour's refusal to implement such policies exposes them as willing servants of the colonial capitalist system that continues to extract wealth from our communities while concentrating it in the hands of a parasitic elite.

Chris Hipkins and his "moderate" advisors like Vernon Small represent the smiling face of a system designed to maintain inequality while providing the illusion of change. Their capital gains tax proposal is not a step toward justice - it is a carefully calculated strategy to preserve the fundamental architecture of exploitation while throwing crumbs to working families desperate for relief.

The time for moderate solutions to extreme inequality has passed. Our communities deserve policies that match the scale of the crisis we face, not more neoliberal tinkering designed to protect the wealth of colonisers and speculators.

I remain committed to exposing these systems of oppression and their cheerleaders in the media and political establishment. For readers who find value in this analysis and wish to support this mahi, please consider a koha to HTDM: 03-1546-0415173-000. I understand these are tough economic times for whānau, so please only donate if you have the capacity and wish to do so.

Mauri ora, whānau. Keep fighting the good fight.

- Ivor Jones, The Māori Green Lantern

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