Labour’s first big policy – building Economic Sovereignty up rather than burning it down
Election 2026: Labour pitches an alternative to tax
The Labour Party has released its first major policy ahead of next year’s election, promising there is an alternative to taxation.
Labour leader Chris Hipkins announced his party’s “Future Fund” policy, pitching it as the way to grow the economy, pay the bills, and build local infrastructure.
I think Labour’s first big announcement was clever and shrewd.
It’s straight as fuck because it is appealing to those who voted Labour in 2020 and voted National in 2023.
Most Kiwis have no idea what a National Fund is, but what they do understand is investment and building up rather than tearing down and that is the impression most will have.
National, ACT and NZF are only focused on protesting their donors interests while cut everything else back, what Labour is suggesting is building up our economic sovereignty and protecting NZ businesses.
There are questions of course, the dividends of these State Owned Enterprises are currently providing revenue that is paying for public services, if that money is being channeled away into a National Fund, who is providing the revenue that is paying for those public services?
This is where Labour’s tax plan needs to step in.
In terms of economic sovereignty, Labour’s plan is a powerful one as CAFCA points out…
The Campaign Against Foreign Control of Aotearoa (CAFCA) applauds the Labour Party for recognising the harm that dependence on overseas “investment” is doing to the people of New Zealand.
CAFCA Organiser Murray Horton says Labour Leader Chris Hipkins’ signal that the Party wants to retain more business profits in Aotearoa and reduce the number of skilled Kiwis leaving the country is very positive.
“Mr Hipkins said that: ‘For too long we have leaned on overseas investment and too often the jobs and wealth that start here end up offshore’. He also said we need a Government that backs our people, our ideas, and our industries so our people and wealth stay here at home,” Horton says.
“CAFCA could not have said it better. In fact, we have been saying the same thing for 50 years as Governments of both flavours have made it easier for overseas corporates to buy local businesses”.
Horton says Labour’s fresh approach comes at an important juncture because the ACT-National-NZ First government is currently pushing a Bill to make it even easier for overseas investors to gain access to New Zealand resources.
“Kiwis are constantly told that ‘We need overseas investment’. What we have had, however, is not foreign investment, but foreign takeovers”.
“We do not see overseas investors building up green field businesses that create jobs and bring in new technology. Instead, foreign companies buy farms and businesses that Kiwi entrepreneurs or the Government have created, and the returns to New Zealand are minimal at best”.
“They suck profits out our country, they do not create more jobs, and while we are told we need overseas money to pay off the national debt, our debt has increased as overseas ownership in the economy has grown”.
CAFCA’s Website (see below) provides figures on the impact of overseas takeovers in Aotearoa.
Based on Government statistics, the figures show that in the 2023-2024 financial year transnational corporations extracted profits of $11.1 billion from the NZ economy. In the 2022-2023 financial year they extracted $12.2 billion, and over the last decade, their annual profits averaged $9.9 billion.
In the decade 2015-2024, overseas corporations made $99.5 billion in profits from New Zealand. Over that time they only reinvested 33.6% of these profits back into the NZ economy.
“Foreign investors make massive profits here and they are not great for employment either,” Horton says. “They only employ 17% of the workforce and this has steadily declined from 20.5% in 2000″.
“Foreign ownership can add to unemployment. Over the past couple of years, for example, we have seen a number of manufacturing businesses close in the regions because power prices have jumped and overseas companies have decided they can operate more cheaply in other countries”.
Neither has foreign ownership improved New Zealand’s foreign debt problem. In 1989, total private and public foreign debt stood at $47.5 billion, about two-thirds (67.8%) of NZ’s GDP. In March 2024, it was $363.6 billion, or 87.5% of our GDP, despite all of the asset sales and takeovers that have occurred in that time.
Horton says CAFCA is very concerned about the Government’s Overseas Investment Amendment Bill, currently making its way through Parliament.
Among CAFCA’s concerns are changes that would speed up approvals for overseas takeovers and that would make it easier for overseas companies to buy forestry land or sell bottled and bulk water overseas.
Bill Rosenberg and Jane Kelsey are long-standing experts in this field. They have have alerted the public to the fact that the Bill weakens the current special forestry test, which holds that a sale of forestry land must pass a Benefit to New Zealand test.
The new Bill also removes the current investor test, which examines the character of a potential overseas buyer of forestry land. The character test examines whether the an investor has been imprisoned, fined, or penalised for illegals acts.
Proposed amendments to the Overseas Investment Act also remove protections on sensitive land that is not residential or farm land. This would make it easier to sell offshore islands, marine and coastal areas, conservation land, and land subject to a heritage order or wahi tapu.
A mining company looking to buy or lease land native forest on an offshore island or coastal area for exploration or mining would no longer have to undergo the benefit to New Zealand test or investor test, for example.
…economic sovereignty is going to matter more and more in the future, which is why we need to start considering the creation of a Sovereign Credit Fund.
The greatest mistake Labour did over Covid, was that they borrowed the money from private banking rather than do what Mickey Savage did, create Sovereign Credit!
In the 1930s–40s, the first Labour Government (Savage & Fraser) used the Reserve Bank to directly finance social housing, infrastructure, and employment schemes. This was sovereign credit creation — money issued into the economy for public purposes.
New Zealand used sovereign credit creation in the 1930s for housing and recovery. Since the late 20th century, reforms locked us into a bond-based system to satisfy global financial orthodoxy and inflation fears. The difference is simple: bonds create debt to outsiders, sovereign credit creates money internally.
Why borrow from private banks when we should be directly creating sovereign credit to build the vast infrastructure deficit and climate adaptation investment net we face.
If the Reserve Bank or Treasury created credit for targeted, productive investment (like, green infrastructure, affordable housing, climate resilience):
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The economy could benefit from extra capacity and jobs.
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Inflationary pressure would be limited if the spending matched real productive needs.
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International markets might notice but wouldn’t necessarily “punish” NZ — especially if debt-to-GDP stayed stable.
Let’s call it the Tino Rangatiratanga Sovereign Credit Fund.
A Tino Rangatiratanga Sovereign Credit Fund that is used to build infrastructure and community climate change adaptation.
A Tino Rangatiratanga Sovereign Credit Fund could build all RSAs and Marae’s up as civil defence fall back hubs while putting solar panels on all their roofs and on every school, hospital and public state house to reach 100% renewables.
A Tino Rangatiratanga Sovereign Credit Fund could build the big infrastructure projects, Second Harbour crossing, mass public housing build, wind farms, sea turbines, and hydro dams alongside next generation hospitals.
A Tino Rangatiratanga Sovereign Credit Fund could fund a new inner coast marine transport service.
Climate change and geopolitical upheavals exacerbated by Climate change are coming whether we want to believe in them or not.
A Tino Rangatiratanga Sovereign Credit Fund could be the mechanism we use to make that investment now.
As a first step, Labour have done bloody well for brining economic sovereignty back to the main stage.
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There is no alternative to a CGT with teeth and a Wealth tax. Chippy is one of the sorted.
Good to have you back after your coma Chris. In the years since you been gone things have changed around the world. Startups were big in the 2010s but they sort of all morphed into incubators for the war machine. Then there was an attempt to make money off the virus but that spluttered out because the people realised that public servants were trying to make money off the virus. And these days we certainly don’t lock healthy people up indoors like those sick power-hungry politicians used to do. Today’s issues are urgent Chris. The imperial loonies and especially the 5 eyes world that you inhabit are committing genocide every day, for fun, and so maybe you need to start your campaign with an assurance to the world that this is unacceptable, that you recognise the Palestinian nation and people, that you will do everything in your power should you be elected to hold these murderers to account, and that your priority is keeping the kids and communities of the world safe. I know, it isn’t really a fit with the ordinary robotic policy that you’re used to delivering (safe and incremental, am I right?), but then again, these are not ordinary times Chris. Welcome back, hopefully you can do better than your last performance at election.
I am giving this a cautious appraisal. It looks like a good start. Are they brave enough to rewrite the OIA and remove some dangerous changes hidden under the radar like this…
” The new Bill also removes the current investor test, which examines the character of a potential overseas buyer of forestry land. The character test examines whether an investor has been imprisoned, fined, or penalised for illegals acts “
Yes…excellent idea…mskes absolutes sense on every level..
Labour are the real party of business .. and …social morality…
Able to walk, talk, and chew gum…
all at the same time.
Meanwhile…National are completely posssumed in the headlights ..caught out…don’t know what to do…
Luxon and Willis stuttering and stammering all over the place…hopeless!!
This is the same income source that pays the bills for health and education so where is that income coming from.
The government picking winners has had a poor track record think zero power scheme through Blackrock
Where is that income coming from?…Jesus wept.
Cancellation of all the coalitions policies would be the revenue stream. Reverse landlord rebates, put a hold on MP salary increases, cancel the 300 million in tax breaks to tobacco companies etc etc etc.
The problem is you are financially literate, the profits get sucked out of the country.
Illiterate that’s wot you meant
Yes that oaf who wants to be PM should have been warned and made to apologize to Barbara Edmonds yesterday in parliament. Unfortunately she is fair game for the right wing misogynistic bullies because they are very afraid of her and her knowledge about finance, move over Willis let the real finance minister
“please stand up “
And the idiots can’t see why Labour are reluctant to issue policy this far out from the election. The disinformation from the right to scold Labour policy is on full show. The same time Labour announce policy National announces policy on roads. Yes, roads of all things(so National). National having roading policy is like saying water is wet, same old same old.
And it’s National, whose pathological hatred of trains, that have, in turn, fucked the roads around the country by choosing to move freight using massive, unsuitable for N.Z. roads, articulated trucks.
National’s economic plan…. Getting the country off the rail track and over a cliff.
Scary read and why this CoC mob has to go ASAP. They have no scruples, standards or conscience, nor do they give an iota about anyone other than themselves and their incessant greed and corruption. Hipkins is on the right track but needs to ensure he has the funds to clear up the horrible mess this lot are already leaving in their wake. May this CoC-up implode soon to ensure there is something ‘left’ for the loyal folk who truly love and care about NZ. So again a reminder to everyone on the left to continually check your enrolment details; store a dated snapshot and keep checking. There is something amiss out there re enrolments! Either phone 0800 367656 or email https://elections.nz/contact/
Bishop was on RNZ this morning running Labours plan down, yet he hasn’t explained exactly how his government is going to pay for the billions of dollars of roads and infrastructure they are planning to build and who is going to do the building. And to makes matters worse they have brought forward these plans and are trying to fast track them. People need to remember the mess they made of the Ferries and the fact they caused a two-year delay with the Melling link, the Dunedin hospital and thwarted the Kainga Ora building of social housing sending our economy into a spin.
A bloody great first move .The next step is to increase the 200 million to two billion which we could get back from the land lords ASAP .Then why not roll in the Super fund and ACC investment fund along with Pamu for starters.This type of fund could have snapped up fonterra brands and aliance and turned them into great added value companies .
Labours plan must be OK as those noted economists and business doyens One Minute Mike, the Child Bride and Wotsername are agin it
Interesting take on the pros and cons of Hickey’s mini hoon interview with Edmonds. Hickey had some well thought through questions including on the rigidity of both Labour and National’s adherence to government debt being set at no more than 30% of GDP for forty years now.
Forty years rational thinkers have been telling Labour such obvious truths.
And only now they wake up and expect us to believe that they’re sincere?
Christ they can’t win with you Richard. When they don’t do anything, you complain, when they do something, you complain. I would accuse you of being a moaner, but then rational thinkers have been telling you that for years.
Oh come on, for the last 40 odd years all parties on the left have been captured by the Ideology of Neo-liberalism. Even the alliance bowed to it somewhat. Yes, Neo-liberalism is a FUBAR ideology. The turning of the tide has been slow, but the tide is turning, lets make that turn a full blown reality. By holding labour to account, but not by bashing them.
Good coverage here https://theintegrityinstitute.substack.com/p/integrity-briefing-labours-future
The Future Fund isn’t what the current governments honorary PHD candidates in economics think it is. They are a wonderfully brilliant bunch of geniuses only a mother could love.
What the Future Fund has to be in the first instance is an investment fund that keeps infrastructure invest at our near enough to raising inflation.
This idea that inflation can be maintained on at our near zero percent interest is so insane that The National Party still think of it as sound economic policy and Ultra Orthodox economic doctrine Kiwi style.
The whole National Party Orthodoxy around zero percent borrowing is that they think no one will notice that they’re borrowing at higher rates than Labour did during COVID while they’re using Labours own wealth redistribution policy ie sustainable house price increases/INFLATION!!! and claiming it as sound economic management it’s The Labour Party’s policy. That’s gotta be plagerism.
It’s not even a choice choosing between inflating asset prices or Infrastructure investment keeping pace with inflation the choice is obvious.
Essentially The Future Fund will enable kiwi entrepreneurs to retool or scale up. Introducing badly needed technology back into NZ like extrusion machines, mega massive hydraulic rams, moulds, power plants need way more of that. Just to name a few.
Where’s the excitement!!!
An investment fund that invest in infrastructure seeks a return. Most likely to be in the form of user pays. Which, unlike income tax, is not progressive. So that’s not very left wing.
It’s more viable to fund it directly
Good read https://thekaka.substack.com/p/mini-hoon-inside-labours-future-fund
The government doesn’t buy new tractors it leases but kiwi entrepreneurs can buy tractors. Big difference.
I mean fuck mate. Where the fuck did you learn commerce ??? Watching television eh? Dork.
Leasing saves the cost of the initial outlay or the burden of borrowing. Moreover. there’re also great tax advantages along with maintenance, servicing and repairs savings.
Nevertheless, the option of buying or leasing is open to government
Most local businesses are struggling with low consumer demand due to the high cost of living.
Until you address that, investing in businesses that don’t export won’t really be viable.
Many local businesses are struggling with low consumer demand due to the high cost of living.
Until you address that, investing in businesses that don’t export won’t really be viable.