A proposal to change the way teachers are paid is being described as the Government's "latest ideological burp".
Treasury documents indicate the Government is considering education sector reforms including a form of bulk funding for schools, giving them more control over teacher salaries, Radio New Zealand reports.
The previous National Government wanted to introduce bulk funding and performance pay but scrapped the policy after furious union reaction.
Under the existing system teachers are paid by the Ministry of Education and schools don't have anything to do with pay levels.
Labour says meddling with school funding would be hugely disruptive and do nothing to improve learning.
"Reports that the Treasury wants to revisit the bulk funding of schools to encourage performance pay for teachers is just the latest ideological burp from the National Government that brought us increased class sizes and charter schools," said acting education spokesman Chris Hipkins.
"It's all about cost cutting and saving money - bulk funding is designed to allow the Government to duck responsibility for funding cuts by placing all the burden on schools."