The Labour Party plans to combine state-owned assets into a new sovereign wealth fund that will invest only in New Zealand businesses and infrastructure.
Leader Chris Hipkins said the Future Fund was the first step toward creating secure, well-paid jobs nationwide. It would channel more capital into local firms and expand opportunities for workers.
“New Zealanders are inventive and resourceful, but years of underinvestment have left too many great Kiwi ideas without support, while the wealth we create flows offshore,” he said.
The fund would be governed by the Guardians of the New Zealand Super Fund but operate as a separate investment vehicle, similar to the Elevate NZ Venture Fund.
Existing commercial Crown companies would be transferred into it, and managers could borrow against the assets to finance domestic investments. They would not be allowed to sell any initial assets and would require approval to sell new ones.
The fund would seek commercial returns but would not be benchmarked against global markets. It would operate independently of the Government.
“The Minister of Finance will set broad objectives through a letter of expectation but will have no power to direct individual investments,” a policy document said.
“Returns will be both financial and social. Some investments may not deliver the fast profits of global markets, but they will create lasting national value — stronger communities, lower costs, more resilient industries, and opportunities that keep talent and ideas in New Zealand.”
$20 billion?
Labour did not specify which assets would go into the fund, but possible candidates include Transpower, the three major electricity companies, Kiwibank, Landcorp Farming, Timberlands, New Zealand Post, and Air New Zealand.
Together they could form an asset base worth more than $20 billion, generating over $1 billion a year in dividends. The Future Fund could then borrow a few billion to invest.
But restrictions on selling or trading assets would limit the fund’s ability to grow, while placing them under commercial management would stop the Crown from using them to pursue broader goals, such as directing electricity companies to build more renewable generation.
Unprofitable entities such as TVNZ and KiwiRail could not be included without permanently weighing down the portfolio, since managers would be unable to offload their liabilities.
Labour finance spokesperson Barbara Edmonds said the fund would provide the capital needed to turn innovation into “real businesses and real jobs here at home.”
“The fund will invest in New Zealand for the benefit of everyone, building infrastructure and backing innovative businesses to create secure, well-paid jobs and grow wealth in every region,” she said.
Temasek-like
The Coalition Government has also received advice on a similar policy. Ministers Paul Goldsmith and Nicola Willis were briefed on a new holding company in January last year.
Treasury said the idea had been raised several times since 1996. Labour also explored it while in coalition with NZ First in 2017 but rejected allowing the fund to sell any assets.
Fund managers often oppose models that stop them from offloading underperforming assets or require them to weigh too many non-commercial factors, as such limits constrain returns and add financial risk.
On the other hand, more capital for New Zealand projects would be welcome, given most NZ Super Fund and KiwiSaver investment is held overseas.
Labour also set out the broad values behind its plan, saying it had learned from its previous time in government when it tried to do “too much, too fast” with “not enough finished.”
“In our first term, we will choose a focused set of targeted structural reforms in the areas that hold us back most, go hard at them, and show progress quickly — no endless reviews, no relitigating everything. If something works, we will back it. If it doesn’t, we will change it.”
32 Comments
"The Labour Party plans to combine state-owned assets into a new sovereign wealth fund that will invest only in New Zealand businesses and infrastructure."
So, not at "Temasek-like" then. The good intention however is probably going to become another Provincial Growth Fund rort.
So, not at "Temasek-like" then.
Temasek. Recent investigations by U.S. and British authorities on the multibillion-dollar pig-butchering network have drawn attention to Singapore-linked entities. According to Bloomberg, Chen and his associates set up a Singapore family office that claimed tax incentives and developed relations with firms backed by Temasek Holdings while purchasing expensive properties in the city-state.
An actual economic policy - wasn't that hard to come up with. Get the Keynesians back in government before our economy contracts beyond repair.
To be honest I'm struggling to see the benefit?
Groan.
The big borrow again.
We actually need to invest and own. Only way that will happen is 'Micawber'. In it's various versions.
Exactly.
As unpalatable as Labour are, it's refreshing to see an economic policy initiative. I could be convinced to vote Labour if they rule out a coalition with the Greens and TPM unequivocally. I think Willis is the worst MoF in living memory, she is catastrophically bad. Luxon I really don't have words to describe.
I'd have to hold my nose, but maybe we do need Labour?
I'd have to hold my nose, but maybe we do need Labour?
Consultants will likely do well. Kitchen renos in Grey Lynn will be planned. Plenty of junkets.
Right now, I'd take that.
I can see no light on the horizon. To use an aviation analogy, we have a compressor stall and not enough altitude to restart the engines.
Trickle down you reckon. What kind of vision is it though? It's like being the Cambodia of developed nations.
I think we need long-term strategic planning. For the people. I include the Maori ruling elite when I say that.
T.K. maybe you need to open the blinds and let in some light.
My second-order perception senses are tingling all of a sudden..
I don't want Transpower and the gentailers chucked into a 'sovereign wealth fund' to continue rapaciously to fleece us all.
I prefer the CTU vision of buying back the gentailers and providing us with electricity at the lowest possible price as a public good, improving the cost of living for us all and for enterprises reducing the cost of production.
Reimagining Aotearoa Together policy, a detailed plan to lower energy bills and protect manufacturing by bringing the electricity market back into public ownership, published by the NZ Council of Trade Unions.
https://www.reimagineaotearoa.nz/publicly_owned_electricity
As much as I like to think it'll happen that under a govt, particularly under the Labour/Greens the gentailers profits will be for the public good, I doubt it. Unless you mean it's more money for the govt to fritter away where Labour based on past behaviour merely write out the cheque when asked without asking too many questions. Dunedin Hospital and the ferries come to mind. If you mean run as a not for profit ie no dividends to the govt so we can be the beneficiaries of cheaper electricity, that's another story.
Where does that stop? Government buying farms and producing milk as a public good, baking bread as a public good, etc?
There's a word for that political economic system...& it's failed everywhere it's been tried
Yep. The best public good is when the government keeps its nose out of it.
Borrow more.
Grow more.
When we're already a quadrillion in global debt, and 6-7 billion overshot.
I feel really sorry for them - they know what's ahead, but cannot be elected if they announce it.
Traceable to our media (Dan should ask Hipkins what he knows about the Limits to Growth - he does).
I seem to keep getting the youtube algorithm feeding me videos of the worry of the AI bubble based on the recent unveiling of how it is being financed, with the likes of NVidia 'investing' $100m in OpenAI, then OpenAI buying $100m of NVidia chips given they don't have the funds to pay up front. Add in Private credit market and your assertion of the level of overleverage just got multiplied once or twice over again.
The Future Fund could borrow against up to $20 billion of existing state assets
To be clear, that means getting $20,000,000,000 more into debt...
Debt is only good when investing in houses right?
Politicians and public servants / bureaucrats picking winners, what could possibly go wrong?
Let's copy the Norwegian Government Pension Fund Global. Drilling North Sea Oil and Gas and selling it to the hair shirt net zero UK muppets.
"The North Sea has become the site of a live policy experiment, showcasing two dramatically different approaches to the energy transition, with profoundly different results.
While Norway, committed to net zero, backs further exploration, provides long-term regulatory certainty, and cashes in on massive oil and gas revenues, the UK, also focused on net zero, is actively driving away investors."
https://oilprice.com/Energy/Energy-General/North-Sea-Oil-Booming-in-Nor…
They're selling the family cow for magic beans.
And that was a fairy-tale too.
Golden eggs, as I recall
The Criteria to receive funding is the detail we need. Will the business need to be affiliated to Iwi or show how they align to the Treaty to tap into the fund
So no ideas other than debt debt and more debt. Spend and stay. This country needs a additional source of tax before the whole place is foreign owned.
Land Tax FTW.
Nope.
Seeing it in the wrong light.
Read my recent articles, this site. The inputs are resources and energy. Tax them by all means - but don't tax a dormant item. That's trying to get blood out of a stone, misidentifying the driven and the driver.
No energy applied to land, nothing taken from it.
Which tells us the ponzi is well overshot.
This may be a part of a comprehensive plan though I somehow doubt it.
It seems to me that if the state has determined that the economy needs direction/assistance then the simple option is to invest directly, and by all means appoint an arms length team of technocrats to administer the leading, but I fail to see any advantage in creating yet another fund on ad hoc market principles.
"Labour did not specify which assets would go into the fund, but possible candidates include Transpower, the three major electricity companies, Kiwibank, Landcorp Farming, Timberlands, New Zealand Post, and Air New Zealand."
...which inclusion in the fund would then inhibit/prohibit those assets ever being sold down individually by National ?
Might just be part of a cunning plan...
Say it with me now... "debt, debt, debt!"
It all rather depends on who controls what gets invested in, as it has the potential to be an enormous pork barrel for favourites' projects.
And do we really need to further enable natural monopolies And public goods to take on more debt?
Well, if we want exponential growth to continue - everything gets commodified, dug up, burnt, trashed.
Then it stops anyway - up against hard limits.
Better we discussed the truth about those hard limits.
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