Professor Robert MacCulloch: UK Labour Will Win & NZ Labour will copy its ideas.....

UK Labour Will Win & NZ Labour will copy its ideas about raising funds to rebuild public services in NZ Election 2026, which will include wealth taxes.

The front page news in the UK is that, "The Labour party has been drawing up options for how it could raise money through extra wealth taxes to help rebuild Britain’s public services if it wins the general election" (according to sources who have spoken to the Guardian).
On that note, a high ranking former NZ Labour cabinet minister (and current MP) is spending part of June in Europe, including France - visiting economist Thomas Piketty there, who is the global wealth tax master-mind. This MP will also, no doubt, be comparing notes with the UK Labour Party.

Both NZ and the UK face a similar problem - stagnant economies & declining public services. Both countries' Labour Parties don't want to increase income tax or GST or corporate tax, which they fear will create more stagnation. Both parties figure that taxing the capital / wealth of "the rich" would play well with most voters, who would not be targeted. NZ Labour's cunning plan will be to propose not only capital taxes, but combine it with a cut in income tax for middle earners.

So its already looking clear how Labour will fight election 2026 in NZ. The Kiwi economy will sit in a stagnant state for some time. The Nats will struggle to raise higher tax revenues. Willis' cuts to government spending will lead to declining public services. The only way out for National was to argue that it would dramatically increase the quality of those services by virtue of savings obtained from efficiency-orientated restructuring programs, like to health-care, which this Blog has long advocated. But it cannot & will not. Bill English, Steven Joyce, Paula Bennett, John Key & their types are still way too influential in National. Luxon, Willis and Bishop are their poodle proteges. The Coalition can't even order 12 drugs it promised without sending its health policies into chaos, let alone restructure "the system". Luxon better start looking like an "A-lister" himself, and not a "C-lister" economics thinker, with C-lister advisers, or NZ will be sunk once Labour gets hold of the wealth of our wealth-creators.

Get ready for election 2026 to be fought along these (capital tax) lines. DownToEarth Kiwi forecast our high inflation beforehand, forecast how interest rates would be going up (when even the Reserve Bank was not), forecast that our economy would falter after Labour's reckless spending & money printing campaign, and forecast nearly every policy focus in the Coalition agreement. We're confident of our new prediction about the capital tax battle-lines being drawn up, as we speak, in Paris by Labour, to be proposed in two years time.

Sources:

https://www.theguardian.com/politics/article/2024/jun/21/labour-drafts-options-for-wealth-taxes-to-unlock-funds-for-public-services

Professor Robert MacCulloch holds the Matthew S. Abel Chair of Macroeconomics at Auckland University. He has previously worked at the Reserve Bank, Oxford University, and the London School of Economics. He runs the blog Down to Earth Kiwi from where this article was sourced.