Labour says all of its election promises will be fully paid for as it reveals a fiscal plan that leans on scrapping National's Investment Boost and a previously announced capital gains tax to help fund its spending.
The plan, released ahead of the November election, keeps the $2.4 billion operating allowance set at Budget 2026, and it also forecasts a return to surplus in 2028/29, the same year as existing forecasts under the National-led coalition.
Labour said all of its promises are "fully costed and fully funded" while closely similar debt and surplus commitments detailed by the Government.
The ten-page document is the party's answer to attacks from National on an alleged "hidden bill" questioning how a centre-left coalition could pay for new promises.
Labour's costings show $24.5 billion of spending over five years, offset in part by almost $11 billion of new revenue, with the rest absorbed by existing Budget allowances.
Today's announcement also follows repeated pledges from Labour that the detail would come after the pre-election fiscal update, which Treasury released last Tuesday.
Notably, the plan has no specific line item for future pay equity settlements, the single biggest cost National had pinned on Labour.
The party says those will be funded through future Budgets as agreements are reached.
Where is the money coming from?
Labour expects to raise almost $11 billion in new revenue over the forecast period. These would come from four initiatives according to its plan.
• $7.7 billion from repealing Investment Boost, the Government's flagship tax incentive for business investment - of which National has been quick to defend in the past.
Labour is adopting the same surplus timeline forecast in Budget 2026 but promising a different route to it. (Source: 1News)
• $2.8 billion from its capital gains tax
• $365 million from reversing the changes to tobacco excise duty
• $100 million from other savings
The capital gains tax would be a 28% tax on gains from commercial and residential investment property made after July 1, 2027.
The family home, farms, KiwiSaver, shares, business assets and inheritances would be exempt, and Labour says nine out of 10 New Zealanders would never pay it.
Labour first announced the tax a year ago and has pledged every dollar gained from it to health spending. With around $15 billion of health spending in the plan, most of it is matching the coalition's existing cost-pressure track.
That spending would include meeting rising cost pressures at the same level as the current Government, three free GP visits a year through a new Medicard proposed by Labour, and bringing back the free prescriptions scheme.
When questioned on the lack of extra health funding beyond the coalition's track, Hipkins said free primary care would ease pressure on hospitals by keeping people healthy.
"Providing free primary healthcare to New Zealanders will be the biggest advance in the delivery of healthcare in New Zealand in a generation," he said.
The plan would fund at least 6000 new social housing places and repair more than 2000 schools. (Source: 1News)
He said Labour would also end what he called National's hiring freeze in the health system within the plan's existing envelope.
What is money being committed to?
Labour has pledged to reverse half of the Government's public service savings planned for the next Budget and all of the following round at a cost of almost $2 billion.
Hipkins said Labour expected about half of the first year's cuts would already have been made or be underway by the time it took office, and it would not reverse those.
"But we are going to stop the future cuts," he said.
Other commitments in the plan include:
• $591 million for school lunches, though no funding is booked for 2030/31, which Labour says follows the same accounting treatment the Government uses
• $760 million in rent subsidies for 6000 new state houses, alongside $2.9 billion in capital for Kāinga Ora over four years which is counted in capital allowances
• about $1.56 billion to lift the GST registration threshold to $80,000 and let businesses write off assets worth up to $10,000
• $226 million for Apprenticeship Boost and $84 million for Māori trades training
Labour has also pencilled in $968 million for "future announcements".
The Labour Party leader spoke to Breakfast about last night’s 1News Verian poll and the first few days of the campaign. (Source: Breakfast)
The plan leaves about $10.5 billion of future operating allowances unallocated over four years, including about $1.5 billion in 2027/28 and $1.1 billion in 2028/29.
That unallocated for money would also need to cover other cost pressures outside health, such as defence or public sector pay rounds. Labour asserts the remaining space leaves room to respond to future pressures and also pay equity claims.
Additionally, Labour's plan includes about $2.5 billion for an immediate $4 an hour pay rise for 65,000 care and support workers in an interim increase.
However, it leaves future pay equity settlements to future Budgets, saying it "would undermine the process" to announce a figure in advance.
Pay equity settlements left out
The plan does not include a specific figure for future pay equity settlements, despite Labour's pledge to reinstate the pay equity legislation within its first 100 days.
Labour says it is confident those costs can be met within the flexibility built into the plan, but would not say how much it expects them to cost. The party was continuing to argue in its plan that naming a figure would weaken negotiations.
Pay equity and a BNZ buy-back are among the agenda. (Source: 1News)
"It would undermine the process to announce in advance how much had been set aside for individual claims."
Hipkins said the $4 rise was an interim increase, about half of the $8 an hour unions had pushed for, and was not a final deal.
"I'm not going to say to them that they're going to have to wait that much longer," he said, adding a final settlement could take a year to negotiate.
The party's finance spokesperson Barbara Edmonds said transitional rules may be needed so 33 claims that had been underway would not have to start again, though Hipkins said the law would not apply retrospectively.
The Greens rose to 16%, recording support that would give them 19 MPs if repeated in November’s election. (Source: 1News)
Pay equity was the largest single item in National's "hidden bill" claims against Labour, which cited a Treasury estimate of almost $11 billion for reinstating the former regime.
That document, which came out before Labour's plan, claimed an $18.2 billion gap between Labour's spending intentions and its capital gains tax revenue.
Labour also plans to freeze fuel tax for three years and cap weekly public transport fares at $20 in Auckland, Wellington and Christchurch and $10 elsewhere.
The fare cap would be funded by reprioritising 1% of the National Land Transport Fund. The plan's costings table does not list a separate figure for the fuel tax freeze.
TVNZ has extensive coverage of the election campaign. (Source: TVNZ)
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