Colin Ambler/cvnznews.com
Labour Promises Surplus by 2029/30, Plans to Restore Reserve Bank Dual Mandate
signaling has released its fiscal strategy for Election 2026, promising a return to surplus in the 2029/30 financial year and signaling a shift back toward employment‑focused monetary policy by restoring the Reserve Bank’s dual mandate.
The strategy outlines Labour’s plan to balance the books using the original OBEGAL measure — the operating balance before gains and losses, including ACC deficits. Under that measure, this year’s Budget already forecasts a surplus in 2029/30. The current Government instead uses OBEGALx, which excludes ACC and predicts a surplus a year earlier in 2028/29, a target National has pledged to meet if re‑elected.
Labour says its approach will allow the Government to “return to a positive operating balance while still investing in the people, services, and infrastructure New Zealand needs”. The party also aims to gradually reduce net debt to 20% of GDP and maintain core Crown spending at around 33% of GDP once its proposed capital gains tax is fully implemented.
A major plank of Labour’s plan is reversing the coalition Government’s first legislative change — the removal of the Reserve Bank’s dual mandate. Labour argues high unemployment levels show the need for monetary policy that considers both inflation and maximum sustainable employment. The dual mandate was originally introduced in 2018 but removed in 2024, with the Government saying the Bank needed clearer focus on inflation control.
Labour would also reinstate wellbeing reporting, which was removed from the Public Finance Act last year. Treasury’s wellbeing reports, first published in 2022, assessed the state of New Zealanders’ wellbeing and the risks affecting it. Labour says these measures will sit alongside traditional economic indicators to test whether policies are helping people “get ahead, cover the bills, and feel confident about the future”.
The party is also committing to establishing a Parliamentary Budget Office to independently analyse government finances and election promises — an idea National previously supported but did not progress with coalition partners.
“National came in promising to fix the economy. Instead, unemployment is up, businesses are struggling and everything costs more,” Labour leader Chris Hipkins said. “Labour will get the books back into shape, but we won’t do it by making life harder for New Zealanders or cutting the services they rely on.”
