Labour Party Pledges Pay Rise for 65,000 Care Workers
The New Zealand Labour Party released a fiscal plan promising a $4-per-hour pay rise for care workers and a return to budget surplus by 2028/29.
The Labour Party released its fiscal plan on October 4, 2026, pledging to return the national budget to surplus by 2028/29 and reduce net debt to below 20% of GDP. A central component of the plan is the restoration of the pay equity regime within the first 100 days of power, starting with an immediate $4-per-hour pay rise for 65,000 care and support workers on January 1, 2027.
This initial pay increase is estimated to cost $2.5 billion over four years. While the New Zealand Treasury estimates the total cost of restoring the full pay equity scheme could reach $11 billion over four years, Labour has not allocated a specific total sum for all claims. Instead, the party intends to use $10.5 billion in unallocated operating headroom and yearly operating allowances of $2.4 billion to fund its promises.
Labour leadership described the pay rise as an interim measure, with plans to finalize the care and support settlement by the first Budget in May 2027. The New Zealand Council of Trade Unions expressed cautious optimism, noting that while the increase is a tangible step, it does not constitute full pay equity.
The National Party condemned the fiscal plan as a fraud. Finance spokeswoman Nicola Willis claimed the plan lacks credibility and leaves several promises unfunded.
