Govt calls out ANZ boss for backing capital gains tax

Prime Minister Christopher Luxon has statements ANZ New Zealand Chief Executive Antonia Watson for expressing support for a capital gains tax during an interview with Radio NZ.

Watson, who leads the country’s largest bank, said it would be fair to implement a capital gains tax that captures property investment.

“It is true that people are investing in housing for the purpose of getting a capital gain. If that is the purpose of it, why not have it as part of the tax take?”

“If someone had the courage to do it, I wouldn’t be jumping out of bed with joy, because… it’s a hard tax to comply with,” she said. “But it’s probably a fair way to tax another kind of income in this economy.”

Watson, who wrote a dissertation on tax compliance costs at university, said it would not be fair or practical to tax unrealized gains, such as through a wealth tax.

When asked about her comments, Luxon said it was no surprise that the CEO of an Australian bank was wanting to take even more money away from New Zealanders.

“She’s more than welcome to enter the political domain,” he told reporters in Parliament.

“But the point I’d make is that the big Australian banks make a lot of money off the New Zealand public, and maybe taking more money isn’t the right way forward.”

Finance Minister Nicola Willis said if Watson was really worried about the wellbeing of Kiwi’s there was “a lot she could be doing”.

Inquisition

Parliament’s Finance and Expenditure Committee is gearing up to begin its inquiry into banking competition, which is expected to summon the big bank CEOs for a grilling.

Public submissions will close at midnight on Wednesday and hearings will likely kick off sometime next month. The terms of reference include analysis of the price of banking services, and the profits made from various kinds of lending.

Willis has been critical of competition in the banking sector, after a Commerce Commission market study found it lacking. The Finance Minister said the battle between banks looked more like a “cozy pillow fight” and has promised to take action.

ANZ’s Watson likely didn’t intend to enter the political fray. Her endorsement of a capital gains tax was fairly muted, while her opposition to a wealth tax was more enthusiastic.

Labor has been looking at making a capital gains or wealth tax a centerpiece of its 2026 re-election campaign.

Deputy party leader Carmel Sepuloni said on Tuesday that no decision had been made on exactly what their tax package would look like, but making no changes was off the table.

Existing taxes

New Zealand already taxes some realized capital gains and unrealized wealth. For example, gains on investment properties owned for less than two years are subject to income tax rates.

Domestic investments in the share market are taxed as income when bought and sold for a profit, although long-term investments are exempt.

Investors who own over $50,000 of overseas shares have to pay income tax on an assumed dividend payment of 5% each year, regardless of whether any dividends were actually paid.

And, local council rates are calculated as a percentage of a property’s value and aren’t related to its owner’s income or cash flows. These are both taxes on unrealized wealth.

Labor Party MPs and members appear to be debating whether a wealth or capital gains tax would be better. The former would be less conventional but may generate more revenue, while the latter has the support of a much broader cohort — including Watson.