Jacinda Ardern will introduce tax hikes for the richest Kiwis to help pay off coronavirus debt if she wins New Zealand's election

New Zealand's governing Labour party will introduce a new top tax rate if re-elected to help pay back mounting debt in the wake of COVID-19.

On Wednesday, Finance Minister Grant Robertson announced a new top rate of 39 per cent tax for income earned over $180,000 as part of the party's long-awaited tax policy.

New Zealand's current top tax rate is 33 per cent for income earned over $70,000.

Prime Minister Jacinda Ardern said the policy would rake in around $500million a year

Prime Minister Jacinda Ardern said the policy would rake in around $500million a year.

'What this policy it assures that we will not have harsh cuts to health and education and we can keep a lid on debt. That's something we need to give people certainty over,' she said.

The new tax comes as New Zealand, like many advanced economies, has racked up tens of billions of dollars of debt while insuring its economy against the COVID-19 pandemic.

The proposed new tax bracket compares favourably to Australia, which levies high-earners at 45 per cent for each dollar earned above $180,000.

'This does put us at a lower tax rates than Australia,' Ms Ardern said.

'Keep in mind that this is about choosing an option that is best for New Zealand and our times ... we are affecting a small group at less than 2 per cent.'

The announcement will transform the country's election race, with Labour sky high in the polls for the October 17 vote, and hoping for a second term.

Opposition National wasted no time in attacking Labour for the move.

'This is just the beginning. Labour will eventually widen the net and come after middle income earners,' National's finance spokesperson Paul Goldsmith said.

'National won't increase taxes and won't introduce any new taxes.'

Labour attempted to legislate for a capital gains tax during its first term but was knocked back by coalition partner New Zealand First.

The Greens, likely coalition partners for Labour after the October 17 poll, have announced a wealth tax which would hit the wealthiest six per cent of Kiwis.

It remains to be seen whether New Zealanders are turned by the tax promises, though Labour have offered a sweetener from their new tax grab.

Mr Robertson said if re-elected, a Labour government would not implement new new taxes or further increases to income tax during Labour's second term.

'The necessary borrowing for the COVID-19 response meant we could fund emergency measures like the wage subsidy, which protected 1.7 million jobs and gave businesses and workers confidence during lockdown,' he said.

'But we have to be careful about not running up more debt than necessary for our recovery.'

Mr Robertson said the new income tax would require someone earning $200,000 a year to pay an extra $23 a week.