The election battle over tax is intensifying, with the country’s peak union body welcoming proposals from Te Pāti Māori and the Green Party to shift more of the tax burden towards wealth and higher incomes while reducing pressure on workers at the bottom.
The New Zealand Council of Trade Unions Te Kauae Kaimahi says the release of Te Pāti Māori’s tax policy provides an important opportunity for Aotearoa to debate not simply how much tax New Zealanders pay, but who pays it and what the country expects that revenue to fund.
NZCTU President Sandra Grey says the current system is fundamentally unfair because workers pay tax on wages and salaries while some forms of wealth and capital gains can accumulate without being taxed in the same way.
The union movement argues this contributes to growing inequality while leaving governments without sufficient revenue to properly fund hospitals, schools, infrastructure and public services.
Workers pay on wages — but what about wealth?
At the heart of the NZCTU argument is the difference between income earned from working and wealth accumulated through assets.
Employees have income tax deducted from their wages.
But New Zealand does not have a comprehensive capital gains tax, and significant increases in the value of some assets can therefore occur without being treated like ordinary employment income.
Grey points to Inland Revenue research into high-wealth individuals as evidence of the imbalance, arguing the wealthiest families can face substantially lower effective tax rates than ordinary wage and salary earners.
For the union movement, that is not simply a tax question.
It is an inequality question.
Te Pāti Māori plan welcomed — but costing still needed
NZCTU Vice President Māori Aubrey Wilkinson says the organisation supports a number of the directions contained in Te Pāti Māori’s proposal, while noting the policy released by the party has not been costed.
Those areas include taxing wealth, increasing the company tax rate, making personal income tax brackets more progressive and introducing a tax-free threshold for lower incomes.
A tax-free threshold would allow workers to earn an initial portion of their income before income tax applies, potentially putting more money into the pockets of people on lower and middle incomes.
At the other end of the equation, greater taxation of wealth and higher incomes would shift more responsibility towards those with the greatest financial resources.
The Greens have also put tax reform on the election agenda with their own plan released in June.
Why the debate matters for Māori
Wilkinson says the discussion is particularly important because wealth inequality disproportionately affects Māori.
The consequences of wealth disparities extend far beyond what someone has sitting in a bank account.
Wealth can determine whether whānau can purchase a home, withstand a period of unemployment, start a business, support tamariki through education or absorb an unexpected financial shock.
It also accumulates between generations.
Those without assets can spend decades paying rent and servicing everyday costs, while households possessing property and investments have opportunities to build additional wealth.
That makes tax policy part of a much wider conversation around Māori home ownership, income, employment, intergenerational wealth and economic rangatiratanga.
Who pays for the services everyone wants?
The other side of the tax debate is government spending.
NZCTU says Aotearoa faces significant funding pressures across hospitals, schools, water infrastructure and transport.
If voters expect those systems to improve, the money must ultimately come from somewhere.
That creates a clear dividing line emerging ahead of Election 2026.
Some parties are campaigning on controlling government spending and limiting or ruling out new taxes.
Others are arguing the tax base needs to change so government can collect more revenue from wealth and use it to strengthen services and reduce inequality.
The union movement has placed itself firmly in the second camp.
Tax shaping up as an Election 2026 battleground
The debate is likely to become increasingly important as parties release their economic policies.
For voters, the choices will involve more than individual tax rates.
They will also determine the size of government, how public services are funded and how the tax burden is divided between workers, businesses, high-income earners and people holding substantial wealth.
NZCTU says it is prepared to work with political parties willing to tackle inequality and ensure the state has sufficient resources to maintain public services, infrastructure and the welfare system.
But Te Pāti Māori will also face questions about the numbers behind its proposal.
A policy can set out who should pay more and who should pay less, but ultimately an election tax package will need to demonstrate how much revenue it raises, what behavioural impacts it could have and whether the numbers add up.
That sets the stage for a much bigger argument over the coming weeks.
Election 2026 is increasingly becoming a contest not simply over whether New Zealanders should pay more or less tax — but whether income earned from mahi and wealth accumulated through assets should continue to be treated so differently.
For Māori whānau facing some of the country’s deepest wealth disparities, that debate could have consequences lasting well beyond polling day.
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