Watch live: ‘No mandate’ for capital gains tax - PM

PM Jacinda Ardern said today there was

Watch - The government has ruled out implementing a capital gains tax.

Prime Minister Jacinda Ardern said the coalition had not been able to reach a consensus.

She said all parties in the government had entered into the debate with "different perspectives".

"After significant discussion, we have ultimately been unable to find a consensus. As a result, we will not be introducing a capital gains tax.

"While I still believe the capital gains tax would have made a difference, the Labour Party has now campaigned on this for three elections.

"It's time to accept that not only has a government that reflects the majority of New Zealanders not been able to find support for this proposal, feedback suggests there is also a lack of mandate among New Zealanders for such a tax also.

"In short we have tried to build a mandate, but ultimately been unsuccessful."

She has ruled out campaigning on or implementing a capital gains tax while she is leader.

She has also ruled out a water or fertiliser tax.

Ms Ardern denied that New Zealand First had bullied Labour.

"This is MMP, ultimately we had to form consensus amongst three different parties, some of which took different views."

She said "of course" it was disappointing.

But she said she had a good relationship with both parties in the coalition, and times like this - where it could not build a consensus - did not undermine that.

Watch the full announcement here:

The government had been considering its response to the Tax Working Group's recommendations for a broad capital gains tax on land, farms and most shares and business assets - including second properties- but excluding the family home.

A capital gains tax (CGT) is a tax on the profit from the sale of an asset.

Ms Ardern said the Tax Working Group was still a "valuable exercise".

"The majority of recommendations will either be investigated further or have formed part of our work programme.

"There are other things that can be done to improve the fairness of our tax system. As such the coalition government has agreed to tighten rules around land speculation and work on ways to counter land banking.

"Work will also continue to cut red tape for business and crack down on multi-nationals avoiding paying their fair share of tax in New Zealand. We have already made changes to address base erosion and profit shifting, and we will shortly release a discussion document on options for introducing a digital services tax."

She said they looked at a broad range of options but did not want to sacrifice the simplicity of the tax system, or water down the proposals so much they could not achieve its ultimate principles.

The cost of the tax working group would likely come in at under $2 million, Ms Ardern said.

Papers at the release of the Tax Working Group recommendations.

Papers at the release of the Tax Working Group recommendations. Photo: RNZ / Rebekah Parsons-King