Labour minister Ginny Andersen says her boss Chris Hipkins "read the room" after he made the captains call to rule out a wealth or capital gains tax under his watch.
But the Opposition isn't convinced - with National MP Paul Goldsmith saying the governing party must be "very slow readers" and describing the wealth tax idea as an "ideological boondoggle".
"The wealth tax… was madness and they finally realised it's madness, but they've wasted a whole lot of time and effort doing it," Goldsmith said during AM's political panel on Thursday.
"We're not convinced that they won't try and wriggle out and do something around extra taxes because that's what they really want."
Wealth taxes are in place in multiple OECD countries including France, Norway and Spain and it's long been a contentious political issue in New Zealand.
New Zealand was also the only country in the OECD without a capital gains tax, which Labour ruled out introducing during its first term in office.
Fast-forward to 2023, Labour has said it maintains that stance.
"The Prime Minister has been crystal-clear on this one that it's a bottom line for us, he's read the room - the time we're in right now is not the right time for a wealth tax or any kind of big significant changes. That's not what people want right now so that's what we're sticking to," Andersen said, appearing on AM alongside Goldsmith.
"That work was undertaken for a tax switch but, when we considered it both at Cabinet and then at [the] caucus, the view was taken that it's not the right time."
Andersen, like Hipkins on Wednesday, also attacked the National Party's plan to index tax thresholds to inflation.
"We're getting a good sense of what New Zealanders feel right now and it's really concerning that National is still proposing tax cuts for the rich at a time when I don't think we can afford that," Andersen said.
Wednesday's announcement came after new Budget documents revealed the Government considered - but didn't go ahead with - a system switch that included a tax-free threshold and wealth tax.
Earlier this year, a two-year investigation by Inland Revenue revealed New Zealand's ultra-rich paid tax at less than half the rate of the average person.
A wealth tax is a bottom line for the Green Party and Te Pāti Māori, Labour's prospective coalition partners. Both parties have said Hipkins' announcement could derail potential coalition negotiations.
