Labour and National dispute savings from Investment Boost policy

The National Party claims Labour has overestimated the savings from axing the Investment Boost policy by $2.2 billion. Labour is budgeting for $7.7 billion in savings between June 2025 and June 2031 by removing the scheme. Nicola Willis argues the actual savings should only be slightly over $5.5 billion.

Labour finance spokesperson Barbara Edmonds has denied the claim, stating the two parties are measuring different things. Edmonds explained that the cost of keeping the policy is a net figure that accounts for reduced depreciation on existing assets, whereas the revenue from repealing it reflects new deductions that would stop.

Willis has dismissed this explanation as "gobbledegook" and suggested Labour is claiming a "magic tax dividend". She stated that cancelling the policy cannot generate more revenue than it cost to introduce. Treasury has not changed its 2025 Budget estimate of the policy's fiscal impact and has not modelled the impact of its removal.

Separately, Labour admitted to a $90 million error in its fiscal plan after the Taxpayers Union noted a cost was incorrectly recorded as a saving. This error means Labour's unallocated funding will decrease from $10.48 billion to $10.39 billion.

How it developed

• Tue 6 Oct, 4:02pmLabour admitted to a $90 million error in its fiscal plan after being challenged by the Taxpayers Union.

Where reports differ

• National argues the savings from scrapping the policy are $2.2 billion less than Labour's estimate, while Labour maintains the discrepancy is due to different measurement methods regarding depreciation and new deductions

Compiled from reports by The Post and RNZ.