Greens offer National land tax support

The Greens say they will support the government if it wants to introduce a tax on land and a comprehensive capital gains tax.

The surprise move – land tax has never been part of the party's policy platform – will be unveiled today by co-leader Metiria Turei.

But she will warn the government that the Greens will put up a fight if it moves to increase GST and lower the top personal income rate.

Tax reform went to the top of the political agenda last week after the Tax Working Group unveiled a 70-page report pointing out problems with the current system and where it can be fixed. The group, consisting of academics, business leaders and bureaucrats, was set up by the government a year ago to investigate ways to improve the tax system.

It has recommended reducing the top personal income rate, now 38% for those earning more than $70,000, to 33%, and lowering the company rate from 30% to 27%.

It also suggests raising GST, and new or increased taxes on land and investment property, to help fund the income tax cuts. Prime Minister John Key last week did not rule out increasing GST but said the government would consider the working group's report in the coming months. Any changes will be announced in the May budget.

In the party's annual State of the Planet speech in Wellington today, Turei will pledge Green Party support "to help John Key's government take steps towards a fair and balanced tax system".

"I can pledge the Green Party's support for appropriate tax reform that gives New Zealanders better access to affordable housing.

"The Greens offer our support for a comprehensive capital gains tax, provided the family home is exempt.

"We offer this support because a capital gains tax is a progressive tax that leads to a better investment balance and broadens the tax base by nearly $4 billion.

"A land tax is not Green Party policy, but we support an open debate on how a comprehensive package, including a land tax, could help us to access the affordable housing we urgently need."

But she warned there could not be a land tax without proper consideration of Maori land issues or land that is "ecologically sensitive".

She will urge the government to close loopholes that allow the wealthy to avoid paying tax through investment properties they own.

"The Greens will not support any package that includes cuts to the top levels of income tax or any increase in GST because these changes would exacerbate the differences between the rich and poor in our society."

Turei says investing for retirement is one thing, but New Zealand's tax system allows those with the most money to pay the least in tax. "We have a problem when there is $220 billion invested in housing assets but the tax take is minus $500m. Our support is there if John Key's government wants to make a bold move towards a tax system that promotes affordable housing and a more equal society."

- © Fairfax NZ News