Labour has launched its first key election policy this term, announcing a fund which would invest in New Zealand infrastructure and businesses only.
The party is calling it the first step in its plan to "back New Zealand's potential", create "secure, well-paid jobs across the country", lift productivity and ensure wealth is made and remains in the country.
As well, it's pledged to focus its efforts in its first term on helping businesses grow and succeed: "no endless reviews, no relitigating everything."
"We've heard the lesson of last term: too much, too fast - not enough finished... The next Labour government will be different."
Labour leader Chris Hipkins announced the proposed "New Zealand Future Fund" in Auckland on Monday, which would sit alongside - and be operated by - the New Zealand Super Fund, with the Minister of Finance acting as the sole shareholder.
The party's highly-anticipated tax policy is expected this month, but Labour said tax would not be the government's "only source of income", saying it was time to "build new ways of generating national wealth for the benefit of everyone."
Labour leader Chris Hipkins launching the party's first key election policy this term. Photo: RNZ / Marika Khabazi
"We need to create a future that young New Zealanders will want to be part of, a reason for New Zealanders to come home after their OE, a reason for them to stay here in New Zealand because they know they can get good, well-paid jobs that will create the sort of opportunities that they deserve," Hipkins said.
He said the policy would be one of the "cornerstones" of the next Labour government.
Labour's Finance spokesperson Barbara Edmonds said the fund would be "seeded with a number of Crown assets, plus an initial capital one-off injection of $200m".
Hipkins said the $200m would be the initial cash contribution from the government, but Edmonds said the fund would also use the dividends provided by publicly owned assets to reinvest and grow the fund's total value.
"Top of the list will be publicly owned commercial assets," Edmonds said.
"We won't go into the specifics of what those assets are today obviously because of commercial sensitivities and market disclosures, but we will ensure these assets remain in public ownership for generations to come and will be managed responsibly to create long-term wealth for all New Zealanders."
She would not say how much the fund could grow, "because when we look offshore ... these are decisions made by governments who were looking ahead for the future".
She said the government would ensure through legislation the money would be reinvested into New Zealand.
"Too many New Zealand-grown ideas and businesses have had to go offshore to find the backing that they need because they couldn't get it here. That takes away jobs, that takes away opportunities with them - that has to change."
Labour Leader Chris Hipkins and Finance and Economy spokesperson Barbara Edmonds visit Auckland start-up space GridAKL. Photo: RNZ / Marika Khabazi
The policy does not give a sense of the scale of the scheme, saying only that startup funds would come from a small number of Crown assets and an initial funding boost from the government.
"This will provide a steady revenue stream through dividends, an asset base to leverage and the ability to invest for long-term national benefit."
The dividends from the fund would be ring-fenced and reinvested, and the assets would be protected in law, preventing their sale.
"The Future Fund will have the authority to invest and borrow, but any sale of seeded assets will be prevented in legislation. Other assets will require explicit Ministerial approval before being sold."
Hipkins said years of underinvestment had left "too many great Kiwi ideas without support, while the wealth we create flows offshore."
"Labour is backing a future made in New Zealand," Hipkins said, telling New Zealanders they had a choice, "an economy going backwards because of National's short-term thinking, or one built by New Zealanders, for New Zealanders."
Edmonds said the Fund was how "we back ourselves as a country".
"For too long great Kiwi ideas have struggled to get the investment they need. That ends with the Future Fund, which will turn innovation into real businesses and real jobs here at home."
The party planned to partner with business, iwi, unions and communities to "build the industries of the future" and "keep more wealth in Kiwi hands".
A document launched alongside the new policy outlined three principles to underpin the Future Fund and the party's "wider approach":
- Wealth creation with purpose - directing investment to solving real problems: affordable healthcare, warm homes, higher productivity, and a zero-carbon economy.
- Partnership - working alongside business, unions and communities to shape and create new markets, providing clarity, direction and confidence to invest for the long term.
- Investing in ourselves - mobilising New Zealand's own savings, skills and innovation to create jobs and opportunity here at home, and investing proactively to nurture new technological and industrial strengths.
Labour said the exact entities included in the fund would not be confirmed until it was in government, because of commercial sensitivities.
How the initial seed capital would be paid for would be set out in the party's fiscal plan at a later date.
Hipkins said New Zealand First's intention to campaign for a future fund policy had "skipped my attention because I think that conference they spent most of it slagging us off instead".
"I did go back and have a look at what scant detail is available about that, it would appear to me that that's more about creating a fund for investment in infrastructure that has overseas investors in it. That's not what this is about. This is about New Zealanders investing in New Zealand through a public sovereign wealth fund that's about investment in New Zealand."
Peters announced the New Zealand First policy of a $100b future fund at the party's AGM last October, which would be ringfenced for infrastructure investment and against political interference.
Peters at the time said the fund would be based on similar approaches in Singapore and Ireland, and suggested work was already under way to have it operate alongside the National Infrastructure Agency set up by National's Chris Bishop.
He promised to campaign on such a fund for the 2026 election, but indicated he hoped to have it already setup by then, saying "I'll campaign hopefully on supporting its introduction already".
Hipkins said Labour's fund would not be modelled exactly on any other existing funds around the world, but its purpose would be to maximise the public good.
"The fund will be able to buy and sell assets, but in terms of the seed assets that go into it particularly given their strategic importance potentially, there'll be different restrictions around the potential to sell those."
He said the fund would also have the potential for co-investment with Māori organisations.
Edmonds said the policy would be developed so that instructions would be able to be delivered to officials "on my first day as the Minister of Finance". She said the fund would help fund people's retirement and could be a disruptor in the banking sector.
Hipkins said the oversight provided by the fund could help "sharpening the focus of them, but also allowing for reinvestment".
"New Zealand has not necessarily been well served by having energy companies that have extracted huge dividends that have gone back to shareholders rather than being reinvested in new generation, for example. The New Zealand Future Fund ... should those companies end up in it - will be able to reinvest in a way that will create jobs and actually have some public good benefits as well."
Edmonds said the phase after initial startup was when companies often struggled to find capital in New Zealand.
"The gazelle phase, is what would be described by the OECD for example, it's that growth phase before it actually lifts to quite a significant business, that's where access to capital can be difficult."
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