Labour is scrapping its plans to resume contributions to the Super Fund, saying New Zealanders told the party they were uncomfortable with borrowing to invest and it now understands the need to be thrifty.



Leader David Shearer this morning told the Wellington Employers' Chamber of Commerce Labour had listened.



"We've decided that until we are back in surplus, any new spending will have to be paid for out of existing Budget provisions, new revenue, or by re-prioritising."



However, Labour would allow "limited borrowing" to avoid asset sales.



"That's because the return on the assets is more than the cost of borrowing. And we'll get to keep them for future generations."



While Labour understood it had to be "thrifty", Shearer said it also needed to look at New Zealand's priorities.



As prime minister, he would make different decisions to National.



"I wouldn't have spent hundreds of millions of dollars delaying agriculture's entry into the emissions trading scheme. I wouldn't spend $2 billion on a holiday highway to Puhoi. I wouldn't spend $12 million on foreign consultants to restructure the Ministry of Foreign Affairs and Trade. And I wouldn't spend $120 million on selling our state assets."



Labour would stick with its other election policies of introducing a capital gains tax, raising the age of eligibility for superannuation and reviewing the Reserve Bank's monetary policy.



Shearer acknowledged raising the pension age was controversial but said bold decisions were needed.



"I am the first to accept that last year we didn't signal our intentions very well in this area, to raise the age to 67."



Over the next 40 years the cost of Super would double and there would be half as many workers for each retiree - 2.4 workers for each superannuitant, compared to 5.6 today.



"If we don't make changes, it could cost $100 billion over 30 years."



Much of Shearer's speech was spent attacking the Government's economic management; accusing it of "tinkering" and focusing on the short-term.



"New Zealand has not caught up to the world despite our export prices having been at record levels."



The near-zero Budget the Government was preparing to hand down later this month was a "failure to grow the economy".



"Zero Budgets are what you get when the economy is failing. A zero Budget is the consequence of failure, not a solution to it."



Yesterday's Household Labour Force survey showed unemployment had risen by 9000.



"The Government is trying to make a virtue of it. It's not. It's a tragedy."



Since National took office in 2008, Australia had grown almost 20 times faster than New Zealand, he said.



"That's why a thousand New Zealanders a week moved permanently across the Tasman last year. That's more than ever before - despite National's promise to reverse the tide.



"Even reality TV shows about New Zealanders are now set on the Gold Coast. That's of course if you've heard of the GC?"