Labour's free prescriptions policy would abolish the $5 co-payment on all funded prescription medicines for every New Zealander entitled to public healthcare, reversing the fee that the National-led Government reinstated in July 2024.

The Policy: Labour Free Prescriptions — June 2026 →

What it does

• Removes the $5 co-payment on all Pharmac-funded medicines dispensed at community pharmacies
• Applies to every New Zealander entitled to free public healthcare — no application forms or income tests required
• Implementation date: 1 July 2027 if Labour wins the November 2026 election
• Prescriptions from non-approved prescribers (outside the approved provider network) may still attract a co-payment of up to $15
• People aged 14–64 stand to save up to $100 a year, based on filling 20 new prescriptions annually (the threshold at which the current Prescription Subsidy Card kicks in)
• Under-14s, over-65s, and Community Services Card holders are already exempt under current law; this policy extends free prescriptions universally
• Annual cost to the Crown: $74.5 million, plus an estimated $16–16.5 million for increased Pharmac demand from greater uptake
• Funded through Labour's proposed capital gains tax on commercial and residential property sales, excluding the family home
• Sits alongside Labour's Medicard policy (three free GP visits, free cervical screening, free maternity scans) as part of a broader access-to-healthcare platform

The result

The evidence base for removing cost barriers to prescriptions is unusually strong for an election pledge. A NZ Medical Journal study of 71,500 people found those unable to afford the $5 fee had a 34% higher hospital admission rate, and uncollected prescriptions directly generated $37 million in hospital costs in the year studied. Labour's own health survey data shows 155,000 New Zealanders were issued prescriptions they did not collect in 2025. Health system critics — including Dr Mona Jeffreys (the lead NZ Medical Journal researcher) and General Practice New Zealand chair Bryan Betty — warned the fee particularly penalises the "working poor" who earn too much for a Community Services Card but too little to absorb multiple $5 charges for chronic-condition medications. The Greens welcomed the policy, and Winston Peters (NZ First) was reported as supportive. National challenged the universality angle — Christopher Luxon questioned why high earners need subsidies — and ACT's David Seymour called it "reckless spending." National Finance Spokesperson Nicola Willis alleged an $18.2 billion gap in Labour's overall fiscal plan, raising questions about whether the capital gains tax revenues will be sufficient to cover cumulative commitments.

The impacts to watch

• Pharmacy demand surge: Treasury estimates $16 million in additional Pharmac spending from increased uptake; whether community pharmacies have the capacity to absorb a rapid rise in dispensing volumes is untested
• Capital gains tax dependency: the entire funding mechanism relies on a CGT that has never passed a New Zealand parliament; if the tax underperforms or is traded away in coalition negotiations, the prescription policy lacks an alternative funding source
• Equity targeting debate: universal policies benefit higher-income groups who currently pay the fee, raising the question of whether the same $74.5 million would produce better health outcomes if targeted at the lowest-income deciles
• Chronic disease adherence: the greatest potential gains are for people managing heart disease, diabetes, hypertension, and mental health conditions, where medication non-adherence is clinically significant and costly
• Workforce implications: if uptake rises sharply, pharmacist and GP workloads increase, in a sector already under staffing pressure