Labour would spend about $4.3 billion building state houses and repairing schools and hospitals if it wins the 7 November election, a package it is pitching as a way to put unemployed New Zealanders back to work.
Labour leader Chris Hipkins and jobs spokesperson Ginny Andersen announced the policy in Hamilton on Thursday. The party has called it “Start work now”, and 1News reported Labour’s claim that 171,000 New Zealanders are out of work and 20,000 people have lost construction jobs since National took office.
Most of the money is for housing. Labour would give Kāinga Ora, the government’s housing agency, $2.9 billion in capital to build state houses, and set aside another $760 million in operating funding for the extra rent subsidies and running costs that come with more tenants. The party says Kāinga Ora and community housing providers would deliver at least 6000 additional social housing places over four years.
Schools would get $450 million, of which $400 million is capital and about $50 million is operating money. Labour says more than 2000 state and state-integrated schools would see work on classrooms, heating, plumbing, drainage, playgrounds and sports facilities, starting within 12 to 24 months of taking office.
Hospitals would get $200 million in capital for small-scale repairs, with Health New Zealand directed to finish the repair jobs already on its books before moving on to new ones.
The package also expands the Apprenticeship Boost scheme and adds a Māori trades training programme. Labour says that would support nearly 30,000 apprentices and give each of them $1000 towards tools and gear.
Hipkins put the case in simple terms on the campaign trail. “Right now, homes need building, schools need improving and hospitals need fixing. We can do all three while creating good jobs for Kiwis,” he told RNZ.
He argued that public building money travels further than the site itself. “When the Government funds a building project, the benefits go well beyond the worksite. Builders hire tradies, tradies buy materials, suppliers get more orders, apprentices get hours and local businesses benefit from workers spending in their communities,” he said, according to 1News.
Andersen said the country could not keep putting the work off. “We need to get Kiwis back to work. That means building homes, fixing schools and repairing hospitals, not sitting on our hands,” she said.
The construction workforce has shrunk since late 2023, although it has begun to recover. Newstalk ZB reported that data released this week showed an uptick in construction employment, with roughly 192,500 people working in the sector in July, still well below the almost 210,200 in November 2023.
Labour says the plan would be paid for out of future operating and capital allowances, the amounts a government sets aside in each Budget for new spending. Most of the housing operating money would fall between 2028 and 2031.
That funding answer drew the sharpest response from the governing parties. National campaign chair Simeon Brown said it was another Labour promise with no detail about where the money would come from.
“Even if Labour could explain how it would pay for all these promises, it has no idea how to deliver. This is the party that promised 100,000 KiwiBuild homes and light rail for Auckland and delivered neither,” Brown said.
ACT leader David Seymour said funding the package from future allowances would mean either cuts elsewhere or more borrowing. “Unless Labour plans to cut spending elsewhere, they will have to increase those allowances and pile more debt on Kiwi households,” he said in a statement. Seymour pointed to the cost of servicing government debt, which he put at $24.8 million a day.
The announcement fits a pattern in Labour’s campaign so far, which has leaned on spending and investment promises alongside a capital gains tax to raise revenue. Earlier this week the party said it would keep interest deductibility for landlords and rely on its capital gains tax instead. National and ACT, meanwhile, are framing their pitch around paying for promises and getting the books back to surplus, which makes the question of how new promises are paid for one of the clearest dividing lines of the campaign.
For voters the practical question is whether 6000 extra social homes and repairs at thousands of schools can be delivered on the timeline promised. Any incoming government would need builders, consents and land lined up before new homes could be started, and large public building programmes have a long record of running behind their original promises. Labour’s promise that school work would begin within 12 to 24 months gives some sense of how long that ramp-up is expected to take.
Parliament rose for the election this week, and with writ day on 4 October the parties are now releasing policy at pace. If you are still working out where you sit, take our voting tool to see which party’s policies line up with your views.
Would Labour’s building plan help get people back to work, or is it spending the country cannot afford right now? Tell us what you think in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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