Labour revives free prescription policy, claims people will save 'up to' $100 a year

Author: Jamie Ensor ,
Publish Date: Thu, 18 Jun 2026, 1:33pm

This is Labour's fourth health policy to be paid for by its proposed capital gains tax. Photo / Mark Mitchell

Labour is reviving its 2023 policy of removing the $5 co-payment from prescription medicines, paying for it from its proposed capital gains tax.

The party removed the prescription fee when it was in Government in 2023, however that was reversed when the current coalition came into office.

Labour claims that its new policy will save people “up to” $100 a year, though its policy documents don’t say how many people will benefit by that amount.

The party says the $100-a-year saving is based on someone getting 20 new $5 prescriptions filled in a year. At that point, someone can get a Prescription Subsidy Card and not have to pay any more charges.

Under changes made by the current Government, prescriptions now last 12 months – as opposed to three months previously – and patients only have to pay the prescription co-payment once. Repeat dispensing does not require further payments.

Labour leader Chris Hipkins said on Thursday that too many New Zealanders were skipping medicine because they can’t afford it.

“People will be able to see their doctor for free with Labour’s new Medicard, then collect their prescription and pay nothing,” Hipkins said.

Labour’s policy document said “everyone in New Zealand who is entitled to free public healthcare” will be entitled to free prescriptions, but it also acknowledged prescriptions from non-approved prescribers “may still incur a co-payment of up to $15”.

Already, people aged up to 14 and over 65 receive free prescriptions, as do people with a Community Services Card.

The policy, which would take effect from July 1, is being costed at $74.5 million a year and funded through the party’s proposed capital gains tax (CGT).

Labour says it got to that costing by looking at Treasury data that showed had National not reversed the free prescriptions, the cost would have been about $68m in 2027/28.

Adjusting that for increases in subsequent years took the party to an average of around $70m a year.

Removing the co-payments for repeat prescriptions had cost about $12m a year. As that is already being met, Labour removed the $12m from $70m, leaving it with $58m.

It says Treasury is estimating Pharmac will need another $16m to meet additional demand for prescriptions. Taking inflation into account, Labour has averaged this at $16.5m.

Adding the $58m to the $16.5m took the party to an overall average cost of $74.5m.

Perhaps anticipating criticism from National about this policy benefiting wealthy New Zealanders who will receive free prescriptions, Labour included a section in its policy document on “why make this universally available?”

Labour said that “even with targeted support, cost remains a barrier for many people and they can go without the medicine they need”.

“Medicine isn’t a luxury – it’s basic healthcare, and basic healthcare should be there for everyone, like schools or the hospital.”

The party then provided figures on how many New Zealanders don’t collect medicine because they can’t afford it. It said keeping medicine free kept people well and out of hospital.

Earlier on Thursday, Health Minister Simeon Brown announced a funding boost for community pharmacies worth $26.6m.

“This funding boost will help pharmacies continue providing the services communities rely on every day, while supporting them to meet growing demand and deliver more healthcare services locally.”