Watson qualified her comments with a warning about the compliance costs of introducing such a tax, and made it clear she was opposed to any tax on unrealised gains.
But her intervention adds another voice in a now growing chorus of influential New Zealanders calling for a capital gains or wealth tax.
“In this country, people are investing in housing for the purpose of getting a capital gain on it. And if that’s the purpose of it, why not have that as part of the tax take? Have a capital gains tax on realised gains?”
The tax should be levied “once you’ve got the money in the bank,” she said.
“I think that there is some fairness in saying that a gain from a capital gain [is the same] compared to a gain from your income.”
Labour campaigned on a capital gains tax as part of a suite of major changes at the 2014 election but was soundly beaten.
Then, in government Prime Minister Jacinda Ardern considered it again but ultimately ruled it out under her leadership. Last year, a wealth tax plan put together by then-Revenue Minister David Parker was ditched by leader Chris Hipkins.
Labour is yet again examining the idea after defeat at the polls last year.
Earlier this month, Mainfreight co-founder and billionaire Bruce Plested told RNZ he backed a wealth tax if governments were good stewards of the extra revenue.
And last week a study commissioned by Tax Justice Aotearoa found well-off New Zealanders are paying less tax than their peers in nine similar OECD nations.
Watson told 30′ with Guyon Espiner it would be “politically extremely courageous” for a political leader to campaign on the idea again and such a tax would create a lot of work for accountants and lawyers.
“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, and I think we have to be really alive to that.
“But in terms of the overall fairness… it’s probably a fair way to tax another part of income in this economy.”
Watson has been chief executive of ANZ’s New Zealand operation since 2019 after holding a series of senior roles at the bank. She worked at Morgan Stanley prior.
The full interview is released on Youtube, and TVNZ+ as the first episode of the new season of 30′ at 3pm on Wednesday.
The episode also covers the debate over open banking and the cost of borrowing in New Zealand, compared with other countries.
Watson said she had “ended up” with ownership of an investment property but preferred to invest in things like shares. The rental property was “not really” making a decent return in terms of cash flow.
“So that says to me, the rationale for investment is very much partly cash capital gains.”
• 30 with Guyon Espiner comes out every week on RNZ, Youtube, TVNZ+ and wherever you get podcasts.
