Labour will provide an annual grant of $100 per student for schools in lieu of voluntary donations.
The education policy announcement was made by Labour leader David Cunliffe and education spokesman Chris Hipkins today.
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The policy aimed to stop children being "discriminated against and ostracised because of their parents' financial situation", they said.
"Some schools have adopted dubious tactics to get these so-called voluntary donations including repeatedly sending children home with letters and in one case, giving children donation paid tags to attach to their bags," Cunliffe said.
Fergusson Intermediate in Trentham is a decile six school and principal Paul Patterson said about 60 per cent of parents pay the school donation, which is about $100.
"We don't push it but we do have technology fees like most intermediates do.
"A number of people feel obliged to pay it but we don't chase it," he said.
Special education was a poorly funded area and the extra few thousand dollars generated from this policy would help, Patterson said.
"...The inadequacies of special education funding makes delivering an inclusive education exceedingly difficult.''
The school's board of trustees chair Wendy Eyles, said there are parents at the school who can't put food on the table so this policy would be a big relief.
"Suddenly they'll get rid of the social stigma of not paying the donations.''
Schools would be unable to use donations as a top-up if they opted in to the grant scheme.
It's a case of one or the other, Cunliffe said.
The policy is costed at $50 million a year based on all decile 1 to 7 state schools taking it up, and 30 per cent of decile 8 to 10 schools adopting it and integrated schools also getting on board.
Post-Primary Teachers' Association president Angela Roberts said the policy was a great step, particularly for low-decile schools which would really gain from the extra funding.
"It is a well documented fact that low-decile schools are the least likely to be able to raise significant funds from their communities yet it costs more to give their students the education they need."
While Labour's policy would not solve all the issues surrounding school charges it was an excellent place to start, Roberts said.
Cunliffe said school donations had become a real "stigma" for parents who struggled to find the money.
"As passionate as parents are and as committed as they are to their children, they simply can't put food on the table or find $100 for school donations that are not meant to be compulsory," he said.