Kerre Woodham: It's concerning if this is the best Labour can do

Labour released some policies yesterday. Very late in the piece, and you can kind of see why. Just like that, we're back to 2017 with a cut and paste of lofty rhetoric, promises to spend lots of money, and little to no detail. It's a dud, I think it's fair to say. And it's not just me saying that. Oh, we'd expect you to say that, you hate Labour. No, I don't hate Labour. I just hate really, really dumb ideas. I hate the fact that they think that we're all idiots. I hate the fact that they're relying on the fact we have short memories. I hate the fact that apparently, they have been working on this idea since 2017, and this is all they can come up with. When you have Radio New Zealand's political analysts calling it a flop, it’s a flop. You know, they are about as sympathetic as you can possibly get.

Basically, if you missed it yesterday, it was the announcement of a Future Fund. The Future Fund will sit alongside and be operated by the New Zealand Super Fund, with the Minister of Finance acting as the sole shareholder. Chris Hipkins (and this terrifies me), Chris Hipkins said the policy would be one of the cornerstones of the next Labour government.

We want to back New Zealand businesses and invest in New Zealand. We need to see more of our wealth being invested back here in New Zealand rather than flowing overseas. So by using some of our existing public assets, our existing state assets, putting them into a Future Fund, using the returns from them to reinvest in growing New Zealand businesses, we can create jobs and keep more wealth here at home.

You're putting in $200 million in cash. Are you also putting in assets?

That's right. So we're not being specific right now on which companies, which, you know, existing companies would go in because there are market disclosure issues and so on. Some of those are pub, you know, partially publicly listed companies. But we'll set all of that out in government. 

Set all of that out in government. Just trust us. We're not going to give you any detail. We'll just trust us to fix it in government. There is so much wrong with this thought bubble policy, I don't know where to start, so I'll let Chris Bishop do it.

I thought it was a bit of a brain fart put to paper. I mean, honestly, like I had a read of it. Like my like there's more detail on my Uber Eats order than there is in what they've put in their document. I mean, honestly, it's just it's 11 pages - three of them are photos. One of them is like something that you take out of a clip art manual and chuck on the front page. I mean, honestly, it's there's nothing there.

No, there's not. As Nat Rad said, Labour is most vulnerable to the criticism around the thin details, as it feeds National's well-established attack line that Labour is all slogans, no substance.

 
The policy documents came with no figures and no list of assets. And that glib Chris Hipkins, ‘I will fix that in government’, really? How did that work out last time? Not so well. To think that Grant Robertson began work on the Future Fund in 2017. Even allowing for the COVID years, that is the best they can do.

Another concern is, as the PM pointed out, those crown assets provide profits that fund health and education. If the money is being diverted to the fund, where will the shortfall in funding come from? Probably increased taxation.

 And that's fine, but give us the details so that we can then make an assessment on it. If you're going to get the extra funding through a capital gains tax or through raising income tax or whatever - tell us, and then we can decide whether that's where we want the money to go. Is there even a need for this fund to back New Zealand businesses? What is this trope that, plucky little New Zealanders have to have a stake in amazingly successful New Zealand businesses?

The CEO of Icehouse was on with Mike this morning, and he pointed out that capital investors are always available for good ideas. There is no shortage of professional investors awash with money who know a good idea when they see one and will pay for it. Is it the government's business to be picking winners when it comes to SMEs?

Didn't work with the DFC, which was created in the 60s, the Development Finance Corporation, to support industrial development in New Zealand through loans and equity. It failed spectacularly in the late 80s, costing the country billions.  

Pattrick Smellie from BusinessDesk says Labour's claim that their future fund is comparable to Singapore's state investment house Temasek is completely and utterly unsustainable. Temasek has a mandate to trade in its assets and to invest offshore. Labour's proposal doesn't contemplate, he says, either of those things.

He writes, the party remains wedded to an approach to public ownership that traps New Zealand in restricted choices about capital deploy

Episode Transcript

Speaker 1 (00:06):
You're listening to the Carrywood and Morning's podcast from News Talks.

Speaker 2 (00:10):
He'd be laborly release some policies today, very late in
the piece, and you can kind of see why. Just
like that, we're back to twenty seventeen with a cut
and paste of lofty rhetoric, promises to spend lots of
money and little to no detail. It's a dud. I

(00:31):
think it's fair to say. And it's not just me
saying that. No one would expect you to say that
you hate labor. No, I don't hate labor. I just
hate really really dumb ideas. I hate the fact that
they think that we're all idiots. I hate the fact
that they're relying on the fact we have short memories.
I hate the fact that apparently they have been working
on this idea since twenty seventeen and this is all

(00:54):
they can come up with. When you have Radio New
Zealand's political political analysts calling it a flop, that's a flop,
you know they are about as sympathetic as you can
possibly get. Basically, if you missed it yesterday, it was
the announcement of a future Fund. The Future Fund will
sit alongside and be operated by the New Zealand Superfund,

(01:17):
with the Minister of Finance acting as the sole shareholder.
Chris Hipkins, and this terrifies me. Chris Hipkins said the
policy would be one of the cornerstones of the next
Labor government.

Speaker 3 (01:32):
We want to back New Zealand businesses and invest in
New Zealand. We need to see more of our wealth
being invested back here in New Zealand rather than flowing overseats.
So by using some of our existing public assets, our
resisting state assets, putting them into a future fund, using
their returns from them to reinvest in growing New Zealand businesses,
we can create jobs and keep more wealth here at home.

(01:53):
You're putting in two hundred million dollars in cash, are
you also putting in assets? That's right. So we're not
being specific right now on which companies, which existing our
companies would go in because there are market disclosure issues
and so on. Some of those are public you know,
partially publicly listed companies. But we've set all of that
out in government.

Speaker 2 (02:11):
Set all of that out in government. Just trust us.
We're not going to give you a any detail. We'll
just trust us to fix it. In government. There is
so much wrong with this thought bubble policy. I don't
know where to start, so let Chris Bishop do it.

Speaker 4 (02:25):
I thought it was a bit of a brain fart
put to paper. I mean honestly, like I had a
read of it. There's more detail in my uber Eats
order than there is and what they put in their document.
I mean, honestly, it's just it's eleven pages of three
of them a photos one of them is like something
that you take out of a clip art manual and
check on the front page. I mean, honestly, there's nothing there.

Speaker 2 (02:46):
No, there's not. As nat Rad said, Labor is most
vulnerable to the criticism around the thin details as it
feeds nationals well established at tack line that Labor is
all slogans, no substance. The policy documents came with no
figures and no list of assets, and that glib chris

(03:09):
hip consol will fix that in government? Really, how did
that work out last time? Not so well. Do think
that Grant Robertson began work on the Future Fund in
twenty seventeen, even allowing for the COVID years, that is
the best they can do. The other concern, well, there

(03:30):
is another concern is as the PM pointed out those
Crown assets provide profits that fund health and education. If
the money's being diverted to the fund, where will the
shortfall and funding come from. Probably increase taxation And that's okay,
I mean, you know that's fine. But give us the
details so that we can then make an assessment on it.

(03:51):
If you're going to get the extra funding through a
capital gains tax or through raising income tax or whatever,
tell us, and then we can decide whether that's where
we want the money to go. Is there even a
need for this fund to back New Zealand businesses? What

(04:12):
is this trope that plucky little New Zealanders have to
have a stake in amazingly successful New Zealand businesses. The
CEO of ice House was on with Mike this morning
and he pointed out that capital investors are always available
for good ideas. There is no shortage of professional investors,
a wash with money who know a good idea when

(04:34):
they see one and will pay for it. Is it
the government's business to be picking winners when it comes
to Smeez didn't work with the DFC, which was created
in the sixties a development finance corporation to support industrial
development in New Zealand through loans and equity. It failed
spectacularly in the late eighties, costing the country billions. Patrick

(04:57):
Smelley from Business Desks As Labors claimed that their future
fund is comparable to Singapore's State Investment House. Temase is
completely and utterly unsustainable. Temasek has a mandate to trade
in its assets and to invest off shore. Labour's proposal
doesn't contemplate, he says either of those things. He writes,

(05:19):
the party remains wedded to an approach to public ownership
that traps New Zealand in restricted choices about capital deployment,
constrained returns, and a strategic straight jacket that says if
the state already owns something, it should automatically continue to
do so. The real concern here is that Labor is

(05:41):
not worried about what informed commentators like Patrick Smalley have
to say about its policies. They don't care because they
know that the vast majority of the voting public don't care.
They're backing on people having short memories of its complete

(06:01):
and utter ineptitude and failure to deliver on almost every
metats the last time it was in government. All people
know right now as that they're hurting, they're still hurting.
This coalition government isn't setting them a fire. This coalition
government promised a lot and really has yet to deliver.

(06:24):
And you know, I know it's going to take time.
But Labor is quite right to back on the fact
that the vast majority of people just don't care. They
won't read the detail. They won't even know that there
is detail to look for. They won't even know that
there is no detail. I think Patrick'smelly put it brilliantly

(06:47):
too here. The Labor proposal of the Future Fund suggests
either that the party is economically illiterate or that its
target audience is presumed to be, which is so true.
The Future Fund criticizes New Zealand's super Fund for only
investing eleven percent of his assets in New Zealand. As

(07:10):
Patrick Smeley points out, the reason for that, and you know,
and I know, but the vast majority don't is that
the superfund's job is to fund pensions and get the
best possible results from its investible capital, which means not
over exposing itself to a small, vulnerable economy like New Zealand's.
It is basic risk management, but No, this cornerstone of

(07:38):
the next labor government criticizes the Superfund for not investing
all of the funds in New Zealand. Yeah, it's really concerning.
It is really concerning. If this is the best they
can do. They know that everybody who cares has been

(08:00):
waiting to hear what its policy is going to be,
so we can compare and contrast. The coalition government has
not set us on fire. Okay, let's see what labor
can do. Wow, that's it. That is simply not good
enough and it is quite frankly, for those of us

(08:21):
who care, terrifying.

Speaker 1 (08:24):
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