Labour Economic Plan — Investment, Industry Policy and Fair Wages

The Policy: Labour NZ Future Fund — Economic Policy — October 2025 →

Labour is heading into the 2026 election with an economic platform built around three pillars: a new sovereign wealth fund to direct capital into domestic businesses, a capital gains tax to redirect investment from property into the productive economy, and a wages agenda that includes restoring pay equity legislation and — at least implicitly — reviving sector-wide wage-setting mechanisms. Finance spokesperson Barbara Edmonds leads the economic team, with a mandate to balance the books, grow savings, and create conditions for broad-based prosperity.

The National-led government, by contrast, has emphasised fiscal restraint, scrapped Fair Pay Agreements (December 2023), and reduced business compliance costs. Finance Minister Nicola Willis has challenged Labour to explain how it will fund its commitments, including a $12.8 billion pay equity restoration, before the November 2026 election.

What it does:

• NZ Future Fund: A sovereign wealth fund seeded with an initial $200 million Crown capital injection, plus dividends from publicly owned commercial assets. Managed by the Guardians of the Super Fund, it invests exclusively in New Zealand infrastructure and businesses — including community renewable energy, zero-carbon industries, and high-growth startups. Seeded assets are protected by legislation against sale.
• Capital gains tax (CGT): A 28% CGT on residential and commercial property (excluding the family home, farms, KiwiSaver, and small businesses), designed to shift capital from unproductive assets into the productive economy. Revenue funds health commitments including free doctor visits, free prescriptions, and free maternity scans.
• Pay equity restoration: Labour pledges to restore the pay equity regime that the coalition government suspended in 2024, which Treasury estimated at $12.8 billion over four years. Edmonds has signalled productivity gains and economic benefits as justification, while deferring specific funding mechanisms until closer to the election.
• Reserve Bank dual mandate: Edmonds has signalled "very strong reasons" to restore the employment-targeting component of the Reserve Bank's mandate, removed by the current government, putting jobs alongside inflation as an explicit policy goal.
• Renewable energy and industry: Labour opposes the government's proposed gas import terminal and commits to positioning New Zealand as a "renewable energy superpower," with the Future Fund explicitly targeting zero-carbon economy investments.

Where things stand:

Fair Pay Agreements remain the clearest unfinished business from Labour's last term. Passed in November 2022 and in force from December 2022, the FPA legislation allowed unions and employer associations to bargain sector-wide minimum terms — six sectors had been approved to initiate bargaining, including bus drivers, commercial cleaners, and early childhood education workers. The incoming National-led government repealed the legislation under urgency in December 2023 before any agreements were finalised. Labour, the Greens, and Te Pati Maori opposed the repeal. While Labour has not yet released a formal 2026 commitment to reinstate FPAs, the party has signalled continued support for sector-level wage-setting and has been explicit that it will restore the broader pay equity framework.

The NZ Future Fund, unveiled in October 2025 as Labour's first major 2026 election policy, has drawn mixed reactions. Prime Minister Christopher Luxon dismissed it as "classic Labour — three of the 12 pages were pictures. Just buzzwords and no detail." ACT's David Seymour called it a "boondoggle." NZ First's Winston Peters accused Labour of copying his party's infrastructure fund concept, calling it a "Temu mail-order rip-off." Critics have pointed to the absence of specific assets to be seeded, job creation projections, or implementation timelines. Edmonds has defended the discipline of not prematurely committing assets without knowing the fiscal cost.

Labour is deliberately rolling out policy gradually ahead of the November 2026 election, with a full fiscal plan promised before the vote. The party's conference in late June 2026 focused on momentum and readiness rather than new policy releases. As of late June 2026, the key unfunded commitments — pay equity restoration and the full Future Fund asset list — remain outstanding.

What to watch:

• Labour's pre-election fiscal plan: expected to detail how pay equity, the Future Fund, and other commitments are funded
• Whether Labour formally commits to reinstating Fair Pay Agreements as a 2026 election policy