Watch: National releases fiscal plan, promises more funding for health

The National Party has released its fiscal plan, detailing how it plans to pay for its election promises.

The main new commitment is four years of health cost pressure funding. This is carried over from Treasury’s Pre-election Economic and Fiscal Update (Prefu). That document anticipated three years of funding for health “cost pressures”, the funding needed to keep up with inflation and our ageing population.

Labour matched that funding track in its own four-year fiscal plan, but did not fund an increase in the fourth year, saying it will decide on the fourth-year figure later and fund it from its $10.4 billion of headroom – a pot of money which has also been pledged to pay equity.

National has accepted the same three-year track, but included funding for a fourth year – fiscal plans almost always include funding over four years. This means National’s fiscal plan funds four years of cost pressures at $14.57b, while Labour funds the same period at $13.02b. The first three years are exactly the same, but Labour’s plan currently implies a freeze in the fourth year.

While National’s cost-pressure funding, which mainly goes into hospitals and subsidies for GP clinics, is greater than Labour’s, Labour has funded a range of new initiatives like three free GP visits, free scans and removing the $5 prescription co-payment, which raise its overall funding for health above National’s – although the plan as it stands freezes cost-pressure funding.

The plan said that health makes up 88% of National’s spending commitments, “reflecting New Zealand’s ageing population and National’s focus on delivering quality health care for all”.

Finance spokeswoman Nicola Willis said: “New Zealanders have worked hard through a tough few years. National’s plan is about rewarding that hard work, letting more of what people earn stay in their pockets, and building a more secure future for families and businesses.

“Our plan will set New Zealand up for the future and put us in a stronger position to withstand the next severe weather event, natural disaster or global shock.

“Getting debt down is essential to delivering lasting prosperity for New Zealand.

“Less debt helps keep inflation and interest rates down, which means lower mortgage and business borrowing costs. That gives households more breathing room in their budget, and businesses the confidence to invest, build and hire.

The plan includes about $7.5b in operating headroom – less than Labour’s, which is $10.4b, although Labour has to fund an estimated $8.5b in pay equity settlements from its headroom, taking the figure down to $1.9b.

Willis said her headroom would be used for “other cost pressures and new initiatives, including the usual yearly uplifts for areas like education and policing”

The plan accepts the Prefu’s spending and debt tracks, posting an ObegalX surplus in 2028/29 and a smaller Obegal surplus the same year.

Willis has teased another round of income tax cuts once the books return to surplus. This plan confirms no tax cuts in the next four years.

Willis said the plan shows “a pathway to potential tax relief for working New Zealanders”, but that now was “not the time to cut taxes”.

“National’s priority is to get on top of the debt first so that our kids and grandkids aren’t left with a bigger bill and to ensure we have a bigger buffer to withstand future global shocks,” she said.