Labour tight-lipped ahead of tax policy announcement

Labour leader Phil Goff says a bold new tax policy will spell out how the party intends to pay for its policies, but he is keeping tight-lipped about whether a new tax will be part of the package.

The Government has accused Labour of making election promises that will cost billions of dollars without giving any indication of how it will pay for them.

Mr Goff today confirmed an announcement in the next two weeks would outline a broad tax package that would pay for its policies, which include scrapping tax on the first $5000 of personal income, raising the minimum wage to $15 and removing GST from fresh fruit and vegetables.

"It's going to be bold, it's going to be about producing a real step change in the economy," he told NZPA.

But Mr Goff would not be drawn on speculation the package could include new taxes such as a capital gains tax, land tax or financial transactions tax.

"I'm not ruling anything in or out at this stage, you'll just have to wait for the announcement when we've completed the policy process."

Mr Goff said Labour needed to show how it would pay for its previously announced policies.

"Part of it will come through things like ring-fencing, so you can't claim losses off property against other income, part of it that I've announced already will be cracking down on tax loopholes.

"But this will be a wider tax package that, before we start putting forward policy, we've got to demonstrate that there is some substance and credibility to how we pay for it."

Prime Minister John Key said he did not think New Zealanders had an appetite for new taxes.

"In the fullness of time, if we have good sound economic policy, we can actually grow wages and incomes for New Zealanders. And I don't think putting another tax on at a very fragile time is in the best interests of New Zealanders."

The Government remained opposed to a capital gains tax, while Mr Key said a land tax would be "a disaster".

"What we do know is Labour are a long way in the hole if they are seriously going to have an economic package which is as robust as National's," Mr Key said.

"They've argued very strongly that they are going to be reducing debt in the same rate that National will over the same time frame.

"We know that they're opposed to the mixed ownership model, where the Government's likely to raise in the order of $5-$7 billion, if not a touch more. So that is going to be a very heavy tax that they're going to have to apply to all New Zealanders if they really are going to raise that level of income."

Mr Goff said that was "patently false".

"He's talking about a one-off sale which also halves the dividends that he gets each year out of the country's most successful SOEs," Mr Goff told NZPA.

"We want to keep the SOEs -- we don't think a short-term solution like that, a fire sale, is helpful and our policy will be around getting growth in the economy and ensuring that we can assist the productive economy."

Finance Minister Bill English said he would not be surprised if Labour wanted to get more tax.

"But we want a competitive economy where we can lift incomes by selling more to the rest of the world and more taxes are going to make it harder for New Zealanders to earn a living, not easier," he said.

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