Labour releases fiscal plan ahead of November election

The Labour Party has released a fiscal plan claiming all election promises are fully costed and funded. The plan maintains the $2.4 billion annual operating allowance set in Budget 2026 and forecasts a return to surplus in 2028/29.

A central component of the plan is an immediate $4 per hour pay rise for 65,000 care and support workers, starting 1 January 2027. This interim measure is expected to cost $2.5 billion over four years and would provide an average full-time worker with an extra $8,320 annually.

Labour intends to restore the previous pay equity legislation within its first 100 days in office. While the plan does not provide a specific total cost for all pay equity settlements, the party states it will use $10.5 billion in unallocated operating expenditure headroom to meet these and other future costs.

To fund its $24.5 billion in spending over five years, Labour expects to raise nearly $11 billion in new revenue. This includes $7.7 billion from repealing the Government's Investment Boost, $2.8 billion from a 28% capital gains tax on commercial and residential investment property, and $365 million from reversing tobacco excise duty changes.

Where reports differ

• Unions estimated pay equity rises could be between 24% and 38%, or roughly $8 per hour, while Labour leader Chris Hipkins dismissed that figure.
• Reports vary on the amount of unallocated operating expenditure headroom, with some citing $10.5 billion and others citing $10 billion.

Compiled from reports by 1News, The Post, Stuff, NZ Herald and RNZ.