The Green Party refuses to support the new legislation of maximum tax rates of the Government

The Green Party is refusing to vote with the government to pass a law creating a new 39 percent tax bracket for New Zealand’s higher-income earners.

But instead of voting directly against the legislation, scheduled to be debated in the House for the first time this afternoon, its MPs will abstain.

This means that they will not issue a yes or a no, a relatively unusual measure in Parliament.

But since the bill is tax law, the Greens cannot vote against it according to their cooperation agreement with Labor.

However, that agreement establishes that the deputies of the Greens can refrain from issues of trust and supply, like this one.

In a statement, the Greens said the reasons the party is not supporting the government is because the legislation does not implement a tax on wealth or capital gains.

Because of this, Greens co-leader James Shaw said the new law is likely to further increase inequality, as high-income people are incentivized to invest even more money in property.

“The last time the top tax rate was raised to 39 cents without also taxing wealth or capital gains, we saw house prices go up 17 percent because people funneled income into trusts and those trusts invested in properties, “he said.

“This bill will only increase the distortion between the income that is earned through work and the income that is earned through real estate investment and wealth accumulation.

The Greens have been pushing for a capital gain and a wealth tax for years.

On the latter issue, Prime Minister Jacinda Ardern was forced to scrap the tax on numerous occasions before the elections.

And he categorically ruled out implementing a capital gains tax as well, after the tax task force report recommended it in 2019.

Despite the abstention of the Greens and the probable votes “against” of Act and National, the bill will continue to be approved.

This is because the Labor Party has 65 MPs in the House: a party needs the support of at least 61 MPs in the House to pass a law.

Meanwhile, the Act Party has claimed that even though the bill’s first reading took place in just a couple of hours, its MPs have yet to receive a copy of the bill.

“How are deputies supposed to do their job? Parliament cannot hold the government to account if it does not have the opportunity to read and review the legislation,” said law leader David Seymour.

He said Labor campaigned on this bill and have had weeks to put the legislation together; not having given it to opposition MPs, but it raises questions about the government’s competence, he said.

A spokesman for Finance Minister David Parker, who is leading the bill through the House, said the bill would be with MPs before it reaches the House this afternoon.