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 commitments are "fully costed and fully funded".
The ten-page document is Labour's answer to attacks from National on an alleged "hidden bill" questioning how a centre-left coalition could pay for new spending promises.
Labour's costings show $24.5 billion of spending over five years, including about $13 billion to meet rising health costs. Almost $11 billion of new revenue offsets part of that, 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 four years. 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 - which National has been quick to defend in the past.
• $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 matching the coalition's existing cost-pressure track, the tax would only go a small way towards ultimately covering that commitment.
That spending includes 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.
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.
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
• 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", which suggests more promises are still to come.
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 money would also need to cover cost pressures outside health, such as public sector pay rounds, defence and police. The party claims the remaining space leaves room to respond to future pressures.
Labour's plan also includes about $2.5 billion for an immediate $4 an hour pay rise for 65,000 care and support workers.
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 the Government repealed.
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.
"It would undermine the process to announce in advance how much had been set aside for individual claims."
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.
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