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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 at the weekend, saying it would 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’’.
Asked how much of the seed money for such a scheme would come from taxpayers, Mr Peters said yesterday 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.’’
Work on the policy was still under way, with details likely to come by the year’s end, he said.
‘‘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.’’
Singapore’s national fund has an estimated value of about $NZ1.2 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 $NZ$31 billion.
Iceland announced plans for a sovereign fund in 2018, but it was not yet in operation.
Mr Peters’ hope was 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’s not what happened in Taiwan, that’s not what happened in Singapore. They cut the tax for those coming in, but not those domestically because they realise that we’ve got no business going on. We’ve 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’ll have this – we’ll have a huge workforce doing a lot and turning exports around and the economy will benefit like that. And that’s how they [Taiwan and Singapore]… came to that decision.
‘‘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.’’
Mr Peters said funding the scheme would not involve selling state assets ‘‘for only eight months of income’’ like the Labour Party did in the 1980s.
Coalition partner Act New Zealand announced at the weekend the government had agreed to ease 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’re 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’ve got a willing buyer, a willing seller, and there are no dangers to New Zealand’s interests’. ’’
Mr Peters said he had not yet seen ‘‘the substance and the flesh of that policy’’, so could not answer questions about it.
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’’.
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