New Zealand's Labour Party has unveiled its economic plan ahead of the upcoming election, mirroring many of the spending measures set by the current coalition government while introducing several key policy changes. However, opposition finance spokesperson Nicola Willis has sharply criticized the plan for lacking credibility and sufficient costings.

Labour’s fiscal framework largely aligns with the coalition’s trajectory toward returning the budget to surplus, as outlined in last week’s Pre-election Economic and Fiscal Update (Prefu). The party’s projections incorporate revenue from a proposed capital gains tax, the repeal of the Investment Boost tax credit for businesses, and the reversal of the excise tax cut on heated tobacco products. Labour has also indicated it would halt public sector cuts slated for the next four years, saving approximately NZD 1.9 billion.

Despite previous criticism of the coalition’s health spending, Labour plans to match its annual health cost pressures between NZD 1.4 billion and NZD 1.55 billion over the next parliamentary term. Besides initiatives such as free general practitioner visits, eliminating the NZD 5 prescription charge, and boosting funding for scans and screening, Labour does not propose additional hospital or tertiary care funding beyond what the coalition has committed.

A notable policy announcement from Labour is the immediate restoration of the former pay equity regime for care and support workers, which would take effect from January 1, 2027. This adjustment would increase wages by NZD 4 per hour, potentially adding about NZD 8,320 annually before tax for full-time workers. Jan Tinetti, Labour’s workplace relations and safety spokeswoman, described the pay rise as a necessary response to rising living costs and wage stagnation for predominantly female care workers.

However, Labour has refrained from formally costing its pledge to freeze fuel taxes for three years. Instead, the party plans to finance this commitment through reductions in transport spending sourced from the National Land Transport Fund, which supports road construction and maintenance, including allocations to local councils.

Willis condemned this approach, labeling Labour’s fiscal plan as "a fraud" that leaves significant promises inadequately funded. She highlighted that while Labour’s health cost-pressure projections lack a figure for the 2030/31 year—consistent with coalition forecasts—the party would need to allocate at least an additional NZD 1.55 billion from its unallocated NZD 10.5 billion budget headroom to cover that shortfall.

Further criticism targeted Labour’s plan to use cost-pressure funding to fulfill the pay equity commitments. Willis warned this strategy would consume nearly all unallocated funding for the next four budgets, potentially leaving little room for increased spending on schools, police, prisons, defense, and other frontline social services.

Labour leader Chris Hipkins and finance minister Barbara Edmonds faced scrutiny for not providing a more comprehensive fiscal outline, with opposition figures asserting the plan falls short of the transparency and detail expected from a major party’s election-year budget. Labor officials defended their approach as responsible and focused on targeted spending to support households and essential services.