Labour reveals policy to forgive student loan debt as party kicks off campaign

Labour is promising to forgive 10% of student loan debt, a policy costing an estimated $583 million over the next four years.

The party is unveiling the policy at its campaign launch in South Auckland, where Labour leader Chris Hipkins anchored his speech on the impact of rising costs and declared he’d never felt so strongly about National being a “risk to the future of this country”.

The policy, announced alongside Hipkins speech, pledged to cut 10% of student loan debt for anyone who had finished studying, hadn’t benefited from the Fees Free programme and was still paying off their loan. Those owing $2000 or less would see their debt wiped completely.

The cut, first available from April 1, 2027, would be received once students had stayed in New Zealand for three years once they finished their study.

Labour’s policy document totalled 10% of eligible debt at more than $813m, however, said its true value, also known as its fair value was slightly more than $460m over four years.

In addition to costs from lower interest revenue and additional funding for Inland Revenue to administer the policy, the party estimated it would cost $583.4m over four years. Much of the cost ($439.5m) would be in its first year in 2026/27.

“Student debt can follow people for years, making it harder to save for a home, start a family or simply get ahead,” Hipkins said.

“This policy means more money to save for a home, start a family, build a business or just have a bit more breathing space.”

Earlier, National Party leader Christopher Luxon unveiled a new “pledge card” loaded with ten commitments he says his party will deliver on if re-elected as he headlined National’s own campaign launch, also in Auckland.

The pledges were mostly generic mission statements and policies, including to have “economic growth that delivers new jobs and higher wages”, “no new taxes”, “better school results”, “tougher consequences for criminals”, “faster healthcare and more medicines”, “better infrastructure”, and the “books in surplus”.

The card also referred to policies already announced by National including compulsory KiwiSaver, paid parental leave extension from 26 weeks to 30 weeks, and a “better deal at the supermarket”, which the party hopes to achieve by pursuing structural separation of FoodStuffs.

It came as Luxon and other speakers, including former PM and National leader Sir John Key, hammered home to the hundreds at Auckland’s International Convention Centre the threat of new taxes from a Labour-led government.

Speaking to Newstalk ZB this morning, Labour campaign chairman Kieran McAnulty said his party would be targeting an “out of touch” Luxon as well as the Government’s “broken promises”, referencing high unemployment, homelessness and wages rising slower than inflation.

He stressed how prominent the high cost of living would be in Labour’s campaign.

“We’re talking about the things that Kiwis care about the most and we, we monitor those things regularly and we know that consistently over the last three years the cost of living is well above everything else … and we know this Government is weak on that.

“They don’t talk about that because they know it’s true and they know it’s harming them, so of course we are talking about that every chance we get.”

McAnulty also spoke of Labour’s push to enrol people to vote amid the Government’s law change preventing enrolment 13 days before election day. The Government argued the change was intended to avoid vote-counting delays but McAnulty likened it to “gerrymandering”.

“There are 400,000 people that enrolled and voted within the period that the Government has now made it illegal to do so and the vast majority of those people did not vote for this Government.

“So it’s pretty clear what this Government is trying to do; they’re trying to screw the scrum because they can’t campaign on their record.

“In previous campaigns, [enrolment] hasn’t been a big feature, but this time it is a massive feature and we are enrolling a lot of people because of this.”

Adam Pearse is the Deputy Political Editor and part of the NZ Herald’s Press Gallery team based at Parliament in Wellington. He has worked for NZME since 2018, reporting for the Northern Advocate in Whangārei and the Herald in Auckland.