Both Peters and Hipkins cite Singapore\u2019s Temasek as a role model when it comes to spurring economic growth. <\/p>\n
The S$434 billion global investment company holds the Singapore Government\u2019s commercial assets – among others – on an arm\u2019s-length basis. A similar model here would see all the Government\u2019s holdings in SOEs and publicly listed companies transferred to a new government-owned fund, which would manage the portfolio.<\/p>\n
Capital would be recycled – if assets were divested and reinvested in new companies. That\u2019s not going to happen.<\/p>\n
Peters earlier told me a lot of time was spent working with Treasury to try to get Labour involved in a similar initiative during a previous government. <\/p>\n
\u201cIt works. I\u2019m seeing a whole lot of countries that are thinking that way.\u201d<\/p>\n
NZ First is instead promoting a $100 billion fund focused on investing in New Zealand infrastructure. It would also be ring-fenced from political meddling and billed as a silver bullet for infrastructure funding.<\/p>\n
The devil is in the detail \u2013 and NZ First\u2019s Future Fund is light on them. Purists will be aghast at the notion of offering tax incentives to attract infrastructure investment, though it tallies with the philosophy behind the party\u2019s proposal for a special Economic Zone at Marsden Point to \u201cprovide relief\u201d from planning regulations and the Resource Management Act. <\/p>\n
Tax and investment incentives and reduced company taxes would also be considered for the zone, as part of a wider strategy to produce more goods and services for export.<\/p>\n
The potential benefits from a $100b fund are significant. But with the establishment of National Infrastructure Funding and Financing (NIFF) to connect private capital with New Zealand\u2019s public infrastructure projects, the opportunity may have passed. <\/p>\n
Where Peters is mining votes is with the party\u2019s proposal to buy back the Bank of New Zealand (BNZ) from its Australian parent, National Australia Bank (NAB), and merge it with Kiwibank. The goal is to create a major, state-owned \u201cNational Bank of New Zealand\u201d to increase market competition and keep banking profits onshore.<\/p>\n
Peters estimates the purchase price to be in the range of $7.5b-$15b, while market experts suggest it could cost upwards of $20b. The proposed funding stack would involve issuing domestic sovereign banking bonds, long-dated Crown debt, and utilising investment vehicles like the Future Fund and ACC. His coalition partners have panned the proposal.<\/p>\n
Labour\u2019s proposal<\/p>\n
Labour\u2018s New Zealand Future Fund also draws inspiration from Singapore.<\/p>\n
Aimed at boosting domestic investment, the party\u2019s flagship economic policy proposes keeping Crown assets in public ownership and leveraging their dividends to fund national infrastructure and innovative Kiwi businesses.<\/p>\n
Hipkins says tax can\u2019t be the Government\u2019s only source of income: \u201cIt\u2019s time instead to build new ways of generating national wealth.<\/p>\n
Labour leader Chris Hipkins says his government’s future fund would “keep opportunities in New Zealand by investing in our people, our ideas and our industries.” Photo \/ Mark Mitchell <\/p>\n
\u201cThe Future Fund will keep opportunities in New Zealand by investing in our people, our ideas and our industries, so the next Trade Me, Xero or Rocket Lab can thrive and grow with the wealth they create staying here.\u201d<\/p>\n
The fund would be seeded with an initial $200m in taxpayer capital and existing state-owned commercial assets (such as energy gentailers or state-owned enterprises). There is, as yet, no transparency on which assets will go into the fund.<\/p>\n
The Government holds 51% stakes in three of New Zealand\u2019s four listed power companies – Genesis Energy, Meridian Energy and Mercury Energy. It also holds 51% of Air New Zealand and owns outright NZ Post, Kordia, KiwiBank, Pamu (Landcorp), Airways Corporation and Quotable Value NZ and Transpower. These companies paid $688m in dividends to the Government last year.<\/p>\n
The NZ Super Fund would run the fund. The single shareholder would be the Minister of Finance (similar to the Singapore model). But unlike the Singapore model where its fund can freely buy and sell assets, Labour\u2019s policy includes a legal firewall preventing the initial \u201cseed\u201d assets from being privatised or sold to private investors.<\/p>\n
Critics, including economists from the New Zealand Initiative, argue that the fund forces bureaucrats to \u201cpick winners\u201d rather than allowing private capital to allocate resources efficiently. Others note that diverting dividends from Crown assets reduces revenue for much-needed services.<\/p>\n
The fund will, however, use the assets as collateral to borrow against, with the goal of expanding the fund\u2019s investment capacity to as much as $20 billon over time.<\/p>\n
Infrastructure NZ has welcomed the proposal, saying it would secure Aotearoa\u2019s future and would be a positive step towards long-term infrastructure planning.<\/p>\n
\u201cLabour\u2019s proposed New Zealand Future Fund could also depoliticise key aspects of the funding process \u2013 a long overdue move,\u201d said Infrastructure NZ CEO Nick Leggett. <\/p>\n
\u201cNew Zealand\u2019s infrastructure deficit is well-known and understood. \u201cHowever, solving it will take political courage, bold long-term thinking and the willingness to seek additional investment. A future fund as Labour has proposed has the potential to bring scale, certainty and domestic capital into the system to fund much-needed infrastructure.\u201d<\/p>\n
Successive Labour governments established ACC (Kirk Government); KiwiSaver and the NZ Super Fund were launched by the Clark Government. The last Labour Government also created the Elevate NZ Venture Fund, with $300 million seed capital.<\/p>\n","protected":false},"excerpt":{"rendered":"Both Peters and Hipkins cite Singapore\u2019s Temasek as a role model when it comes to spurring economic growth.…\n","protected":false},"author":2,"featured_media":471788,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[7501,308,13956,19092,51,146881,6726,6256,138,3276,2199,3088,45450,10668,219,5903,528,1888,60044,2082,16555,295,36091,3273,305,13480,27699,13489,10934,111,139,69,2847,4762,6729,180,3235,238387,6271,3542,6728,80],"class_list":["post-471787","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-7501","tag-actually","tag-ambition","tag-assets","tag-auckland","tag-battlegrounds","tag-become","tag-brown","tag-business","tag-chris","tag-city","tag-commercial","tag-convention","tag-economic","tag-economy","tag-election","tag-far","tag-first","tag-followed","tag-for","tag-form","tag-fund","tag-funds","tag-future","tag-have","tag-hipkins","tag-labours","tag-leader","tag-mayor","tag-new-zealand","tag-newzealand","tag-nz","tag-only","tag-party","tag-peters","tag-shares","tag-sold","tag-spruiked","tag-suit","tag-wayne","tag-winston","tag-zealand"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/471787","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=471787"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/471787\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/471788"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=471787"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=471787"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=471787"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}