Labour would introduce a bill to Parliament before Christmas to bring forward infrastructure spending in a 20-year programme, if the party was re-elected.
Finance spokesperson Michael Cullen gave more details of the party's economic policy on Tuesday, which includes both an immediate plan to stimulate the economy by bringing forward infrastructure investment, and longer-term goals.
He said the aim of the additional stimulus package was to ensure the economy was kept moving during the slowdown, and that people are kept in work.
Dr Cullen said spending would be focussed on rail and roading improvements, local government, forestry, sewerage and water projects and upgrading state housing stock.
He announced that Labour would issue long-term infrastructure bonds with tax-free inflation-indexed elements, to help pay for the investment.
The party would support the creation of an electrified rail network in Auckland, including the North Shore and beyond.
Michael Cullen said the package would make no changes to the tax cuts Labour has already legislated for.
Labour would consult the Guardians of the New Zealand Superannuation Fund and KiwiSaver providers to encourage more investment in New Zealand by their funds.
Dr Cullen says another part of additional stimulus package would reduce the interest rate Inland Revenue charges businesses that under-pay their provisional tax, from about 14% to about 6.7%.
Other aspects of Labour's policy include increasing New Zealand's export returns to 50% of GDP by 2030.
The party guaranteed annual adjustments to the minimum wage during a next term in government, to keep pace with increases in the average wage or the Consumer Price Index, whichever is the greater.
But Dr Cullen said that due to the current economic circumstances Labour was not able to commit to lifting the minimum wage to $15 an hour, though it remained an ambition.
Not properly costed, says National
The National Party has dismissed Labour's economic rescue plan as a wish-list that has not been properly costed.
Finance spokesperson Bill English said National also intends to bring forward infrastructure spending if elected, but the difference is that National has run the numbers.
Mr English said reducing the interest rate Inland Revenue charges to businesses that under-pay provisional tax would make a "very marginal difference" to a small number of businesses.
"The biggest problems that businesses face over the next 12 to 24 months are rising costs and dropping revenue, many of them won't be making any profits at all."
However, Business New Zealand chief executive Phil O'Reilly says it will have an impact, particularly for small businesses.
"This is probably a good small-ish idea, but nevertheless a valuable idea that would help small business through what could be a bit of a hole in terms of economic activity."
The New Zealand Institute and the Stock Exchange had both called for provisional tax to be deferred for two years, but Labour, National and Business New Zealand have all said that could create cashflow problems in the third year.
Phil O'Reilly says while encouraging greater investment in the country by the New Zealand Superannuation Fund and KiwiSaver providers sounds good for businesses, it might not be good for investors.
"We need to make sure that we don't have a situation whereby we have some sort of misguided economic nationalism that means its all got to go into New Zealand. "
He says the policy as a whole is full of fine statements, but does not outline what it would cost, how it would be paid for, and what businesses and the government would do differently in order to achieve it.
