Commuters in Auckland, Wellington and Christchurch would pay no more than $20 a week for public transport under a $65 million-a-year Labour election promise.
In other regions, the cost-of-living weekly cap would be set at $10, according to Labour.
It's one of the first major policy initiatives announced by Labour ahead of November's election. The party has spent months holding out on big election pledges.
Announcing the policy this morning, Chris Hipkins said the weekly fare cap would take effect from July 2027 if his party was elected – covering buses, trains and some ferries in Auckland, Wellington and Christchurch, and all other regions at the lower $10 rate.
Hipkins said the fare cap was aimed squarely at the cost of living.
"Our fare cap is a major cost-of-living commitment designed to put money back into the pockets of commuters, students and families," he said in a media release.
"New Zealanders will be able to use public transport as much as they want all week for only $20 in our major cities and just $10 everywhere else - keeping more money in their back pockets."
Under the policy, commuters would tag on with their card as normal, and once they hit the $20 cap, every additional trip that week would be free.
Labour claims the average user would save around $25 a week, about $1200 a year.
Weekly fare caps already exist in Auckland, with some limitations for different modes. Every additional trip, after a commuter has reached the current $50 cap, becomes free.
The three main centres account for nearly 90% of all transit trips taken, and approximately 1.3 million Kiwis over the age of 15 use public transport every year.
"Cheaper fares mean more freedom, freedom to get to work, freedom to study, freedom to attend appointments and freedom to spend time with family and friends without worrying about the cost," Hipkins said.
Labour transport spokesperson Tangi Utikere said the cap would give people certainty about the maximum cost of getting around each week.
"We want people catching buses, trains and ferries more often because that means lower household transport costs, less congestion on our roads and stronger public transport networks," he said in a media release.
"Public transport should help people get ahead, not become a luxury people get priced out of."
Labour said the policy was costed at "approximately $65 million per year or less than 1% of the National Land Transport Fund".
The party's proposed weekly fare cap would not cover interregional train services.
Labour has so far confirmed policies including a Future Fund, capital gains tax changes to fund three free GP visits, a family doctor loan scheme, and free cervical screening.
Utikere said today's transport policy was significantly cheaper than the previous Labour government's half-price fares scheme because not every trip would be subsidised.
"There are still journeys where people will still have to continue to pay revenue until they hit that cap, as opposed to a half-price sort of approach where every single journey is coming out of subsidy," he told reporters at Waitematā train station.
He said the $65 million cost was based on modelling from Auckland, which suggested a $20 cap would produce a 6% increase in patronage — an additional 5 million boardings a year in the supercity.
Hipkins said the cap was intended to be ongoing rather than temporary.
Pressed on what projects might lose funding under Labour, he pointed to the Government's roads of national significance programme.
Yet another spending promise' - National hits back
But National's campaign chairperson Simeon Brown dismissed the policy, accusing Labour of "going straight back to their old ways of throwing money around rather than solving underlying problems".
"Labour is once again trying to bribe New Zealanders with their own money," he said.
"This is yet another spending promise from the Labour Party with no plan for how they'll pay for it."
Brown said the national land transport fund was already oversubscribed and that diverting funds from it to pay for the cap was "fanciful".
"For New Zealanders that means more taxes and more borrowing, which ultimately means higher inflation and interest rates, and greater pressure on the cost of living.
"When it comes to tackling cost of living challenges, the difference between National and Labour couldn't be clearer.
"Labour's approach is more subsidies, more handouts, and more temporary fixes – none of which do anything to address the underlying causes of the cost-of-living pressures impacting Kiwi families."
The proposed weekly fare cap would not cover interregional services such as the Te Huia between Hamilton and Auckland, the Capital Connection between Palmerston North and Wellington, scenic trains, or commercial operators such as InterCity.
Cash-only bus services, including those in Marlborough, would also be excluded.
Auckland's Waiheke ferry service was also excluded.
Some ferries - including Auckland's inner-harbour services, Wellington's East-By-West, and Lyttelton's Diamond Harbour ferry - would be included in the fare cap.
Labour also said it would continue to invest in public transport reliability, including the opening of Auckland's City Rail Link later in 2026.
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