Radio New Zealand
Wellington, October 14, 2024
New Zealand First Leader Winston Peters is promising his party’s proposed $100 billion ‘future fund’ will not be paid for with asset sales, but may involve cutting taxes for offshore investors.
Mr Peters unveiled the policy at his Party’s Conference in Hamilton on October 13, 2024, saying that it will be used to “invest solely in a multi-decade infrastructure build, to ensure our future infrastructure security and to enable future economic growth and social enablement.”
The funds would be “ring-fenced from politicians and political interference,” and used on projects “in our national interest, and not offshore globalised ownership.”
Sources of the Fund
Asked how much of the seed money for such a scheme would come from taxpayers, Mr Peters told Morning Report on Monday that would depend on “How much we get from other sources, how much we can get from present savings programmes.”
“But if the initiative is sound enough, we believe, like Singapore, that it will take off, and it would work, and we should have done it a long, long time ago,” he said and added that work on the policy was still underway, with details likely to come by the year’s end.
“The whole thing is fashioned and modelled on the wisdom of countries like Singapore, picked up later by Ireland or like Taiwan… and countries like Iceland – small populations, very, very trying economic and climatic circumstances, but doing devastatingly well, compared to us,” Mr Peters said.
The Successful Models
Singapore’s National Fund has an estimated value of around $1.2 trillion, and it also has investments worth hundreds of billions of dollars more in things like pension schemes and commercial investment firms.
Ireland set up its fund last year, the government mandated by law to put funds into it every year. At the start of 2024 it was worth about $31 billion.
Iceland announced plans for a sovereign fund in 2018, but it was not yet in operation.
Mr Peters hoped that foreign investment would be attracted by cutting corporate taxes for foreigners investing here, but not necessarily domestic firms.
“Well, it may be that, but that is not what happened in Taiwan, that is not what happened in Singapore. They cut the tax for those coming in, but not those domestically because they realise that we have got no business going on. We have got no employment going on, and then this is a hopeless circumstance.
“If we give them an attraction special to them, then at least we will have this – we will have a huge workforce doing a lot and turning exports around and the economy will benefit like that. And that is how they practically came to that decision, both Taiwan and Singapore. And we need to have for a long time, been required to start thinking like that rather than standing here and having this stupid argument that somehow taxation should be neutral and that taxation can’t pick winners,” he said.
Mr Peters said that funding the scheme would not involve selling state assets “for only eight months of income” as the Labour Party did in the 1980s.
Attracting investment
NZ First’s Coalition Partner ACT at the weekend announced the government had agreed to ease up restrictions on foreign investment.
“The truth is that, in the overseas investment game, New Zealand has been benched by international investors. Being 38th out of 38 countries for openness to investment means we are simply not in the game,” ACT Leader David Seymour said.
“We need to change from, ‘You can invest in New Zealand if you can prove the benefits of it,’ to ‘You can invest in New Zealand if you have got a willing buyer, a willing seller, and there are no dangers to New Zealand’s interests,’” he said.
Policy and Approach
Mr Peters said that he had not yet seen “the substance and the flesh of that policy,” so could not answer questions about it.
“All I think it said – and it was not clear – was we will change the emphasis. You can come unless there is a reason why you cannot, not the other way around… it is not really a Policy. It is an attitude, it is an intention, it is an approach.”
He said it did not necessarily mean land would be sold to offshore interests – and even if it was, it might not stay offshore.
“What we hope will happen is that when foreign ownership comes into this country, it might come here permanently. It starts off foreign but decides to make the full transition and come. That is what we want to do. That is how we became a great country, number one in the world – when you had real politicians who had practical experience running the country.”
New Zealand’s Super Fund, established in 2001 by the then-Labour-led government, was worth $76.6 billion at the end of the recent financial year.
A pension scheme set up in the 1970s by Labour was cancelled just months later by the new National government, led by Robert Muldoon. One KiwiSaver Fund Boss in 2021 described it as “the worst decision by a New Zealand politician, ever.”
‘We are sticking to it’
Elsewhere in the interview, Mr Peters – also Foreign Minister – was asked why New Zealand did not sign a letter condemning Israel for designating UN Secretary-General António Guterres persona non-grata, banning him from entering the country.
He said that New Zealand could not “be responding to every nuance that happens, whether it is the middle of the night when we do not know what other countries are doing.”
Former Prime Minister Helen Clark, under whom Mr Peters worked as Foreign Minister said it was “astonishing” that New Zealand had not signed the letter.
Mr Peters said he was not certain New Zealand had been delivered the letter to sign, despite more than 100 other nations backing it.
“I will go back and trace that , but always the idea that somewhere we all are in sync is wrong. We have to put an independent lens over everything we see and decide whether we are going to do that or not do it,” he said.
He said that New Zealand’s preference for a two-state solution was unchanged.
He called recent Israeli incursions into UN peacekeeping bases in Lebanon “unacceptable.”
There were a number of New Zealand peacekeeping staff on the bases, he said, but could not confirm just how many.
The above report and the pictures have been published under a Special Agreement with www.rnz.co.nz.
