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Labour says the state of the Government's books, being opened by the Treasury today ahead of next month's election, will show the need for a bold savings plan.

The pre-election economic and fiscal update, known as the Prefu, will be issued this afternoon and sets out the the state of Government's coffers and projections for the next three years.

Labour leader Phil Goff would not be drawn this morning on whether Labour will need to reassess its savings policy, being announced later in the week, to take into account the figures.

Labour's policy is expected to include partial compulsion for retirement savings and the resumption of contributions to the New Zealand Superannuation Fund which the National-led Government suspended.

National last week announced it would set aside up to $550 million for a one-off auto-enrolment in KiwiSaver, if the Crown accounts return to surplus by 2014.

That follows its earlier move to cut the minimum contribution rate to the scheme from 4 to 2 per cent and tax employers' contributions.

Goff said the credit downgrade by two ratings agencies last month indicated the bad shape of the Government's books.

"We've been downgraded for the first time in 13 years, that means the credit agencies don't believe we're as credit worthy as we used to be," he told TVNZ's Breakfast programme.

"We know it because 100,000 New Zealanders have voted with their feet and moved across the Tasman since 2008 and we know we've had the highest cost of living increases in 21 years."

The Government needed to tackle the country's high debt and low savings levels, Goff said.

Labour was prepared to take the hard decisions and had proven that by proposing a capital gains tax.

"Nobody wants to go into an election saying 'hey, there's going to be a tax' but if we are going to pay down our debt, keep our assets and give most New Zealanders a bit of a tax break, the people who have been struggling, you've got to have something like a capital gains tax."

Labour wants to give a tax break on the first $5000 of income, remove GST on fresh fruit and vegetables and re-introduce a $800 million research and development tax credit.

It plans to fund that with a greater tax take from a new top rate of income tax and a capital gains tax.

Goff said savings schemes should be bipartisan and has revealed he was approached by government officials about considering giving cross-party consensus to a capital gains tax.

"I said yes, we are not going to make it a political football and they threw it back in our face.

"You try to be bipartisan and do the right thing by your country and politics creeps in and that's a pity."

The last Prefu before the 2008 election projected a decade of deficits and forced the then-National Opposition to scale back its proposed tax cuts.

- © Fairfax NZ News