July 22, 2026 • 8 mins
Taxing the super-rich has been tried overseas and hasn't always worked out, one expert says.
The Greens have set their wealth tax rate at 2.5%, but Treasury modelling suggests it could shrink the taxable wealth base by more than 40%.
The party's own modelling puts the reduction at about 28%.
Dentons tax partner Bruce Bernacchi told Kerre Woodham if introduced, we'd be only one of five countries that have it.
He says in 1990 there were 12 countries in the OECD that had a wealth tax, and there are just four today.
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Speaker 1 (00:06):
You're listening to the Carrywood and Morning's podcast from news Talks,
he'd be.
Speaker 2 (00:11):
The debate continues around whether the Greens have overstated how
much money their wealth tax would raise by underestimating tax
avoidance and compliance costs. Treasury Advice has raised questions about
whether the party has underestimated how much wealthy people would
move assets off shore to avoid the tax. And it's
(00:32):
certainly something I have heard anecdotically. If Labor and Greens
get in, there are measures in place by some very
wealthy business people to get their money out of the country.
Treasury's earlier modeling suggested a two point five percent wealth
tax could reduce the taxable wealth base by about forty
three point seventy five percent, while the Greens modeling assumes
(00:54):
a smaller twenty eight point five percent reduction, resulting in
higher projected tax revenue for them and for their policies.
Denton's tax partner, Bruce Binaki joins me, now, very good
morning to you.
Speaker 3 (01:07):
Good morning, carry How are you good now?
Speaker 2 (01:09):
I'm dumb at maths though I would never have the
I would never have the ability to cost out policies.
But then it doesn't look like you need to you
can just pick numbers out of the air.
Speaker 3 (01:23):
Well, so it seems. And the other extraordinary thing is
that having twenty eight and a half percent of the
high net worth wealth move out of New Zealand as
being an acceptable outcome to the Greens is somewhat extraordinary
to me as well. And I mean, I guess that's
the problem with any modeling and any statistics, right you
(01:46):
can sort of manipulate them or tweak them to produce
a result that is beneficial to your argument. I think
when I thought and looked about at this issue, I've
looked at the actual data and what the experience overseas
has been. And when you look at what's happened overseas,
I mean in nineteen ninety there were twelve countries in
(02:10):
the OECD that had wealth taxes and there are just
four today, which shows you that the experience overseas has
been that wealth taxes don't actually work.
Speaker 2 (02:21):
They will get tax other ways, won't they They don't.
It doesn't have to be as crude at all as
a wealth tax.
Speaker 3 (02:29):
No, it doesn't. And I think, just to go to
your point, wealth taxes are crude, and actually the OECD
analyzed why they thought wealth taxes hadn't worked and found
for the very points you've just mentioned that people and
the Greens of acknowledge and Treasury is focused on that
there will be capital flight and capital mobility and as
(02:52):
a result, you don't actually raise as much tax as
you thought, and so you don't have the money to
redistribute it out that you thought, and that the compliance
costs a high relative to the revenue you're going to
actually raised. And you know, we had our Tax Working
Group a while ago now when in twenty nineteen that
locked at all the measures available to us and concluded
that wealth tax wasn't the way to go, and that
(03:13):
if you wanted to raise, you know, efficiently raise revenue,
that things like capital gains taxes were a better way
to go.
Speaker 2 (03:22):
And yet even that is looking a bit shonky with
the with Labour's promise of three free GP visits and
free prescriptions and for you know, ten dollars bus fares
and we're going to pay for it with the buying
and selling of property, well that's not going so well
at the moment.
Speaker 3 (03:41):
No, no it's not. And I guess that's the problem.
I mean labor really, you know, and the Greens would
fundamentally like a broad scope, you know, full proper capital
gains tax, and they've campaigned both campaigned on that in
the past, and that sort of tax would actually raise
reasonable revenues or would pay for significantly more than three
(04:02):
doctors visits. And so the fact that the Greens and
then you know, have to remit that labor nearly got
a nearly went to the election with a wealth tax proposal.
That's where all these treasury numbers came from. And I
think the focus on who might leave is in fact
only half the story, right, So when you look at
when you look at actual data, you know people will leave.
(04:23):
You look at Norway, similar population to hear, they actually
raise their wealth tax in twenty twenty two to twenty
three from point eight five percent to one point one percent.
That's way below the two and a half percent, and
they had eighty two high net worth individuals with eight
billion dollars leave in that period, which was more than
the previous thirteen years combined. And now the data I've
seen suggest that one quarter of Norway's richest people live
(04:46):
outside in Norway or have shifted assets to relatives overseas.
But the other part of the equation is there will
be people who might high networth, people who might want
to come to New Zealand that never come because of it.
It's something that in tar measure. But you can look
at the success of our active Investor visa program, which
has been going since April last year, and we advise
(05:07):
a ton of these people, and you've got seven hundred
and thirty applicants, and there's an investment pipeline of over
four billion dollars now of new money coming into New Zealand.
And I can tell you that these people and this
money will not come if we're going to slap them
with a wealth tax. And you're hearing that anecdotally, you know,
(05:27):
and we advise. I advise these people, right, they're not
adverse to paying tax, they just don't want to be
double tax and they certainly don't want to be hit
with a wealth tax when we would be only one
of five countries that would have one. There's plenty of
other places that some of these people would migrate to
instead or just stay where they are.
Speaker 2 (05:46):
Yeah, A couple of the people I was talking to
talked about how they'd already set a route in place
for the money to go you know, just in case
that was last year.
Speaker 3 (05:57):
Yes, Yes, it's seem absolutely happening. Yes, because all this
talk of wealth tax and et cetera as spooking people.
Speaker 2 (06:04):
It's yeah. I think it's a bit like when Labor
came in under just sinder Adn and brought in all
the landlord that landlords weren't able to get the costs
back basically from their investment. They said, right, I'm going
to sell my house, and I thought, you're never going
to sell your houses, that's sunny. Of course you're not
going to a lot of them. Did a lot of them?
(06:26):
Did they just meet? No stuff, I'll put my money
somewhere else, because.
Speaker 3 (06:30):
Because when you're that wealthy, I mean, there are a
ton of places you can go. It's actually pretty easy
to buy another citizenship or get residency under investment programs.
It's incredibly easy that there are dozens and dozens of
countries that offer all sorts of regimes, and you know,
people can you know where people structuring themselves to be
ready to move their assets to Singapore. Even you can
(06:53):
actually structure your affairs to move to Australia. And there's
sort of a bit of a loophole for New Zealanders
living in Australia who aren't permanent residents or citizens that
they can find then our sets outside of Australia basically
not taxed in Australia and they can live there on
an in definite basis. So there's all sorts of easy
options available to move outside of New Zealand.
Speaker 2 (07:16):
If you've got squillions, if yeah.
Speaker 3 (07:18):
Yeah, or even not not not not not squillions, there's
a you know, we're we're we're a country down the
bottom of the world, and we're a great place to live,
a wonderful place to live, but you know, there's there's
no compelling business reason for people to be here. And
if you're going to, you know, hit people with these
these sort of taxes that are well outside international norms,
(07:39):
I've got other places they can be and live perfectly
happy and you know, wonderful lives.
Speaker 2 (07:45):
Just finally, I got a text saying, anybody who talks
about tax and dollar figures knows nothing about economics. Tax
changes behavior that has unintended consequences. And I think you've
referenced that for now, just the change of behavior that occurs.
Speaker 3 (08:02):
Yeah, it does, it absolutely does, and sometimes it is
a little bit of a motive, Like just the idea
of being hit with a wealth tax will cause some
people to throw their hands up in the air. But
I think that you know, it's one thing too you
can play with your statistics, but it's another thing to
look at actual hard data of what has happened in
countries that have had wealth taxes or increase their wealth taxes,
(08:24):
and it has caused people to leave. And the fact
there are only four countries left in the world imposing
one an environment where all governments are running deficits and
want more tax revenues. This just does not seem to
be like the right way to go. It just does
not work.
Speaker 2 (08:42):
I thank you very much of your time. As always,
you're always very generous with it. I hate to think
how many taxable dollars we've just used up with you.
Bruce Spinaki Denton's tax partner.
Speaker 1 (08:52):
For more from Kerry Wood and Mornings, listen live to
news talks that be from nine am weekdays, or follow
the podcast on iHeartRadio.
You're listening to the Carrywood and Morning's podcast from news Talks,
he'd be.
Speaker 2 (00:11):
The debate continues around whether the Greens have overstated how
much money their wealth tax would raise by underestimating tax
avoidance and compliance costs. Treasury Advice has raised questions about
whether the party has underestimated how much wealthy people would
move assets off shore to avoid the tax. And it's
(00:32):
certainly something I have heard anecdotically. If Labor and Greens
get in, there are measures in place by some very
wealthy business people to get their money out of the country.
Treasury's earlier modeling suggested a two point five percent wealth
tax could reduce the taxable wealth base by about forty
three point seventy five percent, while the Greens modeling assumes
(00:54):
a smaller twenty eight point five percent reduction, resulting in
higher projected tax revenue for them and for their policies.
Denton's tax partner, Bruce Binaki joins me, now, very good
morning to you.
Speaker 3 (01:07):
Good morning, carry How are you good now?
Speaker 2 (01:09):
I'm dumb at maths though I would never have the
I would never have the ability to cost out policies.
But then it doesn't look like you need to you
can just pick numbers out of the air.
Speaker 3 (01:23):
Well, so it seems. And the other extraordinary thing is
that having twenty eight and a half percent of the
high net worth wealth move out of New Zealand as
being an acceptable outcome to the Greens is somewhat extraordinary
to me as well. And I mean, I guess that's
the problem with any modeling and any statistics, right you
(01:46):
can sort of manipulate them or tweak them to produce
a result that is beneficial to your argument. I think
when I thought and looked about at this issue, I've
looked at the actual data and what the experience overseas
has been. And when you look at what's happened overseas,
I mean in nineteen ninety there were twelve countries in
(02:10):
the OECD that had wealth taxes and there are just
four today, which shows you that the experience overseas has
been that wealth taxes don't actually work.
Speaker 2 (02:21):
They will get tax other ways, won't they They don't.
It doesn't have to be as crude at all as
a wealth tax.
Speaker 3 (02:29):
No, it doesn't. And I think, just to go to
your point, wealth taxes are crude, and actually the OECD
analyzed why they thought wealth taxes hadn't worked and found
for the very points you've just mentioned that people and
the Greens of acknowledge and Treasury is focused on that
there will be capital flight and capital mobility and as
(02:52):
a result, you don't actually raise as much tax as
you thought, and so you don't have the money to
redistribute it out that you thought, and that the compliance
costs a high relative to the revenue you're going to
actually raised. And you know, we had our Tax Working
Group a while ago now when in twenty nineteen that
locked at all the measures available to us and concluded
that wealth tax wasn't the way to go, and that
(03:13):
if you wanted to raise, you know, efficiently raise revenue,
that things like capital gains taxes were a better way
to go.
Speaker 2 (03:22):
And yet even that is looking a bit shonky with
the with Labour's promise of three free GP visits and
free prescriptions and for you know, ten dollars bus fares
and we're going to pay for it with the buying
and selling of property, well that's not going so well
at the moment.
Speaker 3 (03:41):
No, no it's not. And I guess that's the problem.
I mean labor really, you know, and the Greens would
fundamentally like a broad scope, you know, full proper capital
gains tax, and they've campaigned both campaigned on that in
the past, and that sort of tax would actually raise
reasonable revenues or would pay for significantly more than three
(04:02):
doctors visits. And so the fact that the Greens and
then you know, have to remit that labor nearly got
a nearly went to the election with a wealth tax proposal.
That's where all these treasury numbers came from. And I
think the focus on who might leave is in fact
only half the story, right, So when you look at
when you look at actual data, you know people will leave.
(04:23):
You look at Norway, similar population to hear, they actually
raise their wealth tax in twenty twenty two to twenty
three from point eight five percent to one point one percent.
That's way below the two and a half percent, and
they had eighty two high net worth individuals with eight
billion dollars leave in that period, which was more than
the previous thirteen years combined. And now the data I've
seen suggest that one quarter of Norway's richest people live
(04:46):
outside in Norway or have shifted assets to relatives overseas.
But the other part of the equation is there will
be people who might high networth, people who might want
to come to New Zealand that never come because of it.
It's something that in tar measure. But you can look
at the success of our active Investor visa program, which
has been going since April last year, and we advise
(05:07):
a ton of these people, and you've got seven hundred
and thirty applicants, and there's an investment pipeline of over
four billion dollars now of new money coming into New Zealand.
And I can tell you that these people and this
money will not come if we're going to slap them
with a wealth tax. And you're hearing that anecdotally, you know,
(05:27):
and we advise. I advise these people, right, they're not
adverse to paying tax, they just don't want to be
double tax and they certainly don't want to be hit
with a wealth tax when we would be only one
of five countries that would have one. There's plenty of
other places that some of these people would migrate to
instead or just stay where they are.
Speaker 2 (05:46):
Yeah, A couple of the people I was talking to
talked about how they'd already set a route in place
for the money to go you know, just in case
that was last year.
Speaker 3 (05:57):
Yes, Yes, it's seem absolutely happening. Yes, because all this
talk of wealth tax and et cetera as spooking people.
Speaker 2 (06:04):
It's yeah. I think it's a bit like when Labor
came in under just sinder Adn and brought in all
the landlord that landlords weren't able to get the costs
back basically from their investment. They said, right, I'm going
to sell my house, and I thought, you're never going
to sell your houses, that's sunny. Of course you're not
going to a lot of them. Did a lot of them?
(06:26):
Did they just meet? No stuff, I'll put my money
somewhere else, because.
Speaker 3 (06:30):
Because when you're that wealthy, I mean, there are a
ton of places you can go. It's actually pretty easy
to buy another citizenship or get residency under investment programs.
It's incredibly easy that there are dozens and dozens of
countries that offer all sorts of regimes, and you know,
people can you know where people structuring themselves to be
ready to move their assets to Singapore. Even you can
(06:53):
actually structure your affairs to move to Australia. And there's
sort of a bit of a loophole for New Zealanders
living in Australia who aren't permanent residents or citizens that
they can find then our sets outside of Australia basically
not taxed in Australia and they can live there on
an in definite basis. So there's all sorts of easy
options available to move outside of New Zealand.
Speaker 2 (07:16):
If you've got squillions, if yeah.
Speaker 3 (07:18):
Yeah, or even not not not not not squillions, there's
a you know, we're we're we're a country down the
bottom of the world, and we're a great place to live,
a wonderful place to live, but you know, there's there's
no compelling business reason for people to be here. And
if you're going to, you know, hit people with these
these sort of taxes that are well outside international norms,
(07:39):
I've got other places they can be and live perfectly
happy and you know, wonderful lives.
Speaker 2 (07:45):
Just finally, I got a text saying, anybody who talks
about tax and dollar figures knows nothing about economics. Tax
changes behavior that has unintended consequences. And I think you've
referenced that for now, just the change of behavior that occurs.
Speaker 3 (08:02):
Yeah, it does, it absolutely does, and sometimes it is
a little bit of a motive, Like just the idea
of being hit with a wealth tax will cause some
people to throw their hands up in the air. But
I think that you know, it's one thing too you
can play with your statistics, but it's another thing to
look at actual hard data of what has happened in
countries that have had wealth taxes or increase their wealth taxes,
(08:24):
and it has caused people to leave. And the fact
there are only four countries left in the world imposing
one an environment where all governments are running deficits and
want more tax revenues. This just does not seem to
be like the right way to go. It just does
not work.
Speaker 2 (08:42):
I thank you very much of your time. As always,
you're always very generous with it. I hate to think
how many taxable dollars we've just used up with you.
Bruce Spinaki Denton's tax partner.
Speaker 1 (08:52):
For more from Kerry Wood and Mornings, listen live to
news talks that be from nine am weekdays, or follow
the podcast on iHeartRadio.
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