Labour Will Back Kiwis With A Responsible Fiscal Plan

Labour will back New Zealanders to get ahead, grow the economy and make life more affordable, with every promise we have made fully costed and paid for.

“Hard work should get you somewhere. If you work hard and do your bit, you should be able to get ahead and build a good life here in New Zealand,” Labour Leader Chris Hipkins said.

“Too many New Zealanders are falling behind under National. Household budgets are stretched, small businesses are under pressure and the public services people rely on are struggling.

“National promised to grow the economy and get the books in order. It has done neither. 171,000 New Zealanders are unemployed, growth is weaker and debt has continued to rise. They have cut jobs and services, and New Zealanders have been left to pay the price.

“The choice is clear: more cuts and decline under National, or a Labour Government that will balance the books without shrinking the economy, get costs under control and back the people and businesses doing the work.

"Labour will build a country that is better today and better tomorrow,” Chris Hipkins said.

“Every election commitment Labour has made is fully costed and fully funded. The numbers add up and we have left room to confidently respond to whatever comes next,” Labour Finance and Economy spokesperson Barbara Edmonds said.

“We will keep operating allowances at the $2.4 billion set at Budget 2026. Our announced capital commitments fit comfortably within the $12 billion of future capital allowances. We also have almost $10.5 billion of future operating allowances unallocated. We can deliver what we have promised without increasing those allowances.

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“We will return the books to surplus in 2028/29 and bring net debt down below 20 percent of GDP over time. We can do that because we have made better choices about where public money goes and will make every dollar work harder.

“New Zealanders deserve a government that looks after their money and backs them to get ahead. Labour has a responsible plan to do both and build a stronger future for New Zealand,” Barbara Edmonds said.

External Q&A:

Is everything in your fiscal plan fully costed and paid for?

Yes.

What assumptions are you making about economic growth?

We have followed the assumptions and forecasts as laid out in the Treasury's latest pre-election economic and fiscal update.

When will you return to surplus?

We expect to return to a surplus of $2 billion in 2028/29, the same as forecast in PREFU and a year earlier than our Fiscal Strategy.

What will your budget allowance be in 2027?

$2.4 billion. We're retaining the allowance outlined in Budget 2026.

Do you have a fiscal buffer?

Yes. We will return to an OBEGAL surplus of around $2 billion in 2028/29 and have almost $10.5 billion unallocated across future operating allowances. That gives us room to manage future decisions and pressures.

What is the total value of your new spending commitments?

Over the forecast period, our plan outlines about $25 billion of commitments (the bulk of which is in health), plus around $10.5 billion of future operating allowances which are unallocated.

What is the total value of your additional revenue measures?

Our simple, targeted capital gains tax plus repealing Investment Boost and tax cuts for tobacco companies will bring in almost $11 billion over the forecast period.

How are you paying for all of this?

Revenue comes from future operating allowances, our Capital Gains Tax, repealing Investment Boost, repealing the tax cut for tobacco companies, and a small number of other savings.

Will you borrow more?

No, Labour will bring net debt down by almost $10 billion over the forecast period, to $96 billion.

Will you tax more?

We have been completely upfront about our simple, targeted capital gains tax on residential investment and commercial property. Nine out of ten New Zealanders won’t pay it, but every dollar is ringfenced for health care.

We are also reversing some choices National has made, including Investment Boost and tax breaks for tobacco companies.

Can you guarantee there will be no new taxes beyond those you've announced?

Yes. Labour has one tax policy this election. We will only introduce the simple, targeted capital gains tax we are campaigning on.

Why are you not fully reversing the public sector cuts?

Some of those cuts are already underway and cannot simply be reversed overnight.

Can you guarantee no cuts to frontline services?

Yes. We are reversing the majority of National’s planned public service cuts because we’ve seen what indiscriminate cuts do to the services New Zealanders rely on.

Who independently checked your numbers?

Australian accountancy firm Hall Chadwick. They offer expert advice on a range of business advisory and tax, audit, corporate and specialist services.

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