That income tax simply vanishes into the Consolidated Fund to be spent where Cabinet ministers decide. <\/p>\n
On one reading, the Super Fund is already underwriting a small portion of the $24.7b that the Government will shell out this year on NZ Super. <\/p>\n
On another, the Crown is simply taxing itself.<\/p>\n
Other countries have not been so squeamish about deploying their sovereign wealth.<\/p>\n
In July 2015, Canada\u2019s La Caisse de depot et placement du Quebec (CDPQ) launched a distinct subsidiary CDPQ Infra to actively design, finance, build and operate major public projects in Quebec. <\/p>\n
Its flagship project under this model is the Reseau express metropolitain (REM), a 67km automated light metro network in Greater Montreal.<\/p>\n
CDPQ has investments in this part of the world. It acquired a 50% co-controlling stake in Connexa from Spark New Zealand. <\/p>\n
The Ontario Teachers\u2019 Pension Plan holds the remaining 50% of Connexa. While Spark exited the ownership structure, it remains a key customer and continues to dictate its own mobile network capacity and development. CDPQ plans to invest more in Australasia.<\/p>\n
New Zealand has flirted with this approach.<\/p>\n
Under Adrian Orr and Matt Whineray the NZ Super Fund proposed teaming up with La Caisse to build Auckland light rail \u2013 effectively importing the CDPQ Infra model. <\/p>\n
That would have seen New Zealand\u2019s sovereign fund and a proven Quebec partner take on big slices of project risk in return for 30-50 year revenue streams.<\/p>\n
Cabinet baulked. The project was reset, re-announced and later shelved. The opportunity to let our own sovereign fund and its Quebec cousin shoehorn out some $6b to $7b and get light rail done was squandered.<\/p>\n
We should not make the same mistake again.<\/p>\n
Right now, there is a queue of green infrastructure crying out for exactly the sort of balance sheet that only a sovereign fund can bring.<\/p>\n
Take the proposed offshore wind project off the South Taranaki Bight, which the fund is endeavouring to develop with Copenhagen Infrastructure Partners. <\/p>\n
It could supply up to 10% of New Zealand\u2019s current electricity demand, materially easing dry year risk and reducing our reliance on burning coal and gas. <\/p>\n
With a price tag in the order of $5b to $6b, its bottleneck is not money. It is legislation, consenting and political will.<\/p>\n
Nor is the fund a stranger to large-scale green plays offshore.<\/p>\n
The fund is a cornerstone investor with Infratil in Longroad Energy, a major developer and operator of utility-scale wind and solar in the US. <\/p>\n
Longroad already has some five gigawatts in operation or under construction \u2013 enough generation to cover something like a fifth of New Zealand\u2019s annual electricity use if transplanted here \u2013 and a development pipeline that runs well into the tens of gigawatts.<\/p>\n
The irony is that our sovereign fund can find more shovel-ready green projects at scale in the US than it can here.<\/p>\n
Projects such as the proposed $3.5b hyperscale AI data centre that DataGrid NZ wants to build in Southland, which will run on \u201cclean\u201d energy provided by Meridian Energy, could be replicated elsewhere with the fund\u2019s backing.<\/p>\n
These could help anchor a fast-growing domestic digital industry and provide sovereign resilience with the fund a credible, permanent counterparty able to sit at the table with global investors and say, \u201cWe are here for 40 years. Let\u2019s build this properly\u201d. <\/p>\n
For instance, an NZSF Infra could lead or co-lead major green projects \u2013 offshore wind, grid upgrades, large-scale storage, and industrial decarbonisation \u2013 alongside experienced partners such as Copenhagen Infrastructure Partners, La Caisse, GIC or Ontario Teachers.<\/p>\n
It could take structured positions in critical digital infrastructure: green data centres, secure computer clusters, subsea cables and the underlying power and cooling systems that make them viable.<\/p>\n
It could also provide a vehicle to bundle and modernise Crown commercial assets \u2013 for example, selected energy or transport assets \u2013 under professional governance and away from ministerial patronage.<\/p>\n
The core NZ Super Fund would continue to do what it does best: run a globally diversified portfolio with a long-term horizon. The Infra company would spearhead transformational New Zealand-facing projects that require more than simply buying shares on the market.<\/p>\n
There would have to be hard guardrails and statutory protections requiring cross-party support for any change in mandate or withdrawal rules. This has been done elsewhere.<\/p>\n
The alternative is what we have now: a sovereign wealth fund whose mandate is still written as if it will one day be run down; a fund that is already doing heavy lifting for the Budget through tax, but is only allowed to dabble at the edges of the green transition.<\/p>\n
If we are serious about decarbonising our economy, securing our energy future and building the backbone for a modern, AI-enabled export sector, we need a dedicated, well-governed NZ Super Fund Infra company with the firepower and mandate to act.<\/p>\n
The projects are lining up. What\u2019s missing is the courage to admit that our \u201csuper nest egg\u201d has grown up and allow it to be used to build national wealth.<\/p>\n