New ZealandLabour Reveals Fiscal Plan
Labour says all of its election promises will be fully paid for, with a plan that leans on scrapping National's Investment Boost and a previously announced capital gains tax to help fund its spending. The party promises a pay rise for care and support workers and a return to surplus in 2028/29.
Global Newsflix 2 min read
Labour has released its fiscal plan, which it says fully funds all of its election promises. The plan keeps the $2.4 billion operating allowance set at Budget 2026 and forecasts a return to surplus in 2028/29.
The party says it will raise almost $11 billion in new revenue over the forecast period, with $7.7 billion coming from repealing Investment Boost and $365 million from reversing changes to tobacco excise duty.
A 28% capital gains tax on commercial and residential investment property made after July 1, 2027, is also planned, with exemptions for the family home, farms, KiwiSaver, shares, business assets, and inheritances.
Labour expects to spend $24.5 billion over five years, with $2.5 billion going towards an immediate pay rise for 65,000 care and support workers over four years.
The party has not provided a specific cost for fully re-implementing pay equity legislation, but Labour leader Chris Hipkins says there is plenty of headroom within the plan to pay for pay equity overall.
Finance spokesperson Barbara Edmonds says Labour will keep operating allowances at the $2.4 billion set by the coalition government in Budget 2026 and will return the books to surplus in 2028/29.
Edmonds also says Labour will bring net debt down below 20 percent of GDP over time and will use the OBEGAL measure to track progress.
Key facts
- Labour's fiscal plan fully funds all election promises
- The plan raises almost $11 billion in new revenue over the forecast period
- A 28% capital gains tax is planned, with exemptions for certain assets
- Labour expects to spend $24.5 billion over five years
Three perspectives
Neutral
The release of Labour's fiscal plan provides clarity on how the party plans to fund its election promises. The plan's success will depend on the party's ability to implement its revenue-raising measures and control spending. The lack of a specific cost for pay equity legislation may be a concern for some.
Positive
Labour's fiscal plan provides a clear roadmap for the party's spending priorities and revenue-raising measures. The plan's commitment to increasing funding for care and support workers is a positive step. The party's promise to return the books to surplus in 2028/29 is also a positive sign.
Negative
The lack of a specific cost for pay equity legislation is a concern, as it may leave a significant funding gap. The plan's reliance on revenue-raising measures such as the capital gains tax may also be a risk if they do not raise as much revenue as expected. The party's decision to keep operating allowances at the same level as the coalition government may also be seen as austere.
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