spinofflive
Image: Getty
Image: Getty

The BulletinOctober 15, 2024

Coalition aligned on push to attract foreign investment

Image: Getty
Image: Getty

But, asks Stewart Sowman-Lund in this extract from The Bulletin, can Winston Peters win his cabinet colleagues over with his ‘future fund’?

To receive The Bulletin in full each weekday, sign up here.

The push for foreign investment

We talked briefly yesterday about Winston Peters’ plans for a $100bn “future fund” – a ring-fenced infrastructure initiative to be used for projects “in our national interest” – which it appears he intends to campaign on at the next election rather. It’s a bold move, and one that appears to show a softening stance on his party’s view on seeking foreign investment.

The bigger picture is that while Peters is arguing for his long term policy, the government he’s part of is making smaller waves in the same area. The prime minister, as we’ll talk about below, is strongly behind his government’s plans for a new National Infrastructure Agency. And in an announcement made during the typical unfriendly news slot of Saturday morning, associate finance minister David Seymour revealed that foreign investment rules will be loosened, as explained by The Post’s Tom Pullar-Strecker. The move will effectively flip the existing burden of proof that requires overseas investors to prove their investment will benefit the country, with Seymour saying “the new starting point is that investment can proceed unless there is an identified risk to New Zealand’s interests”.

It’s no surprise

The weekend’s announcement had been foreshadowed for some time. Back in May, the OECD noted our restrictive foreign investment rules as barriers to increasing productivity, ranking New Zealand at 38th (out of 38 countries) when it came to openness for investment. At the time, reported The Post, David Seymour indicated that the government had gone as far as it could under the existing legal framework in allowing for more investment and signalled that he was drafting up new legislation. “I’m working as rapidly as possible to send the message to the world that New Zealand actually wants people to come in and invest here,” he said. What we have now is just an initial outline of where the government intends to go, and further detail will likely emerge next year.

Beyond a global assessment of our situation, it has been widely observed that New Zealand has an infrastructure deficit. In a statement, Infrastructure NZ welcomed the shift in our overseas investment rules, saying it was necessary to “supercharge New Zealand’s infrastructure uplift”.

Coalition in alignment (almost)

With all three parties pushing for broadly the same thing, the invitation to foreign investors appears wide open. Writing for BusinessDesk (paywalled), Pattrick Smellie said the significance of Winston Peters’ new proposal, which would involve changes to the tax system to attract foreign investment, was less about what he said and more that he said anything at all. “Hostility to foreign investment, quite simply, has always been part of NZ First’s DNA,” wrote Smellie. As he notes, while the announcements by Peters and Seymour were not directly connected, “the coalition’s message is undoubtedly aligned”.

In a recent interview with Smellie’s colleague Dileepa Fonseka (paywalled), Christopher Luxon said that New Zealand needed to make it easier for foreigners to invest, contrasting us with one of his favourite small nations. “At the moment we’ve sort of got this ‘you’re lucky to invest in New Zealand’ and yet in Ireland it’s ‘thank you for coming all this way to spend your money with us’,” the prime minister told BusinessDesk.

In all likelihood, Peters will be taking his policy with him into the 2026 election campaign, though RNZ reported he was confident of getting buy in from his coalition partners. He told Newstalk ZB’s Mike Hosking he hadn’t seen the government’s own announcement on Saturday and “couldn’t quite follow” what Seymour had said. At his weekly post-cabinet press conference yesterday evening, Christopher Luxon confirmed Peters’ future fund idea had not been discussed and parties were “free” to take their own ideas to the next election. However, on the general principle of foreign investment, Luxon reiterated: “I sit down with investors regularly offshore and say what’s the ‘good the bad and the ugly’ of investing in New Zealand, and the messages are pretty simple: it’s too hard to get anything done [and] it takes too long…

A softening on foreign home ownership?

Meanwhile, in that same interview with Mike Hosking, Peters appeared willing to loosen his stance on foreign ownership of property – something that he was reportedly unprepared to budge on during coalition talks. But it would take more than someone with a “lousy $20m” to make that happens, Peters told Hosking, and wasn’t about allowing people to buy up and then abandon homes in “leafy suburbs” like Remuera. “If you’ve got the right investor here, who’s going to argue about them buying a home,” said Peters. In an interview with Bloomberg earlier in the year, the deputy prime minister similarly suggested that he would be open to relaxing the rules for ultra-wealthy foreigners that were prepared to invest more broadly in the economy.

Meanwhile, we have a new political poll that could fuel Peters and his policy push. Last night’s TVNZ poll showed steady support for the coalition, though New Zealand First was heading dangerously close to the 5% threshold at which they would be turfed back out of parliament. Writing for the Herald, Thomas Coughlan suggested that was the figure that would worry the government the most – “a plausible worst-case scenario for the coalition would be for NZ First to slip ever so slightly, crashing out of parliament and taking 4% of the vote with it”.

Keep going!
FeatureImage_E23HipkinsVsLuxon2b-850×510-850×510.jpg

The BulletinOctober 14, 2024

One year on from Election 2023, what do we know about the next?

FeatureImage_E23HipkinsVsLuxon2b-850×510-850×510.jpg

NZ First is already eyeing up its 2026 campaign, while Labour is promising a ‘reset’, writes Stewart Sowman-Lund in this extract from The Bulletin.

To receive The Bulletin in full each weekday, sign up here.

12 months since a vote for change

It’s exactly one year since New Zealanders headed to the polls in the 2023 general election, though as we should all remember, not quite a year since the coalition government came into power. 1News’ Anna Murray has looked back at the past 12 months, reflecting on what the government has managed to tick off its to-do list thus far. Seeing the list of achievements in rough chronological order really highlights just how much of the government’s initial work was about stopping work introduced by Labour – from the clean car discount to Let’s Get Wellington Moving, through to the possibility of letting 16 year olds vote in local elections. Soon after, work was under way to introduce and pass numerous new pieces of legislation, with Christopher Luxon announcing business-like “quarterly plans” that focused on key areas.

On The Spinoff this morning, we’ve published an extract from Back on Track? The New Zealand General Election 2023, edited by Stephen Levine, a collection of personal reflections on last year’s campaign. In an excerpt from the book, Luke Oldfield looks at the populism, starting with the protest at parliament in 2022. Turning to Labour, Oldfield suggests the party seemed “unwilling or unable to respond” to the then-opposition’s populist messaging, which in part contributed to the crushing defeat and “inevitably” played a role in Winston Peters’ return to parliament.

NZ First eyeing up 2026

Speaking of Winston Peters, one narrative that has built over the past 12 months has been the resurgence of New Zealand First. The party has famously struggled to stay in parliament for more than one term after being in government and, as noted in a recent column for the Herald (paywalled) by Matthew Hooton, support for the party often slips away quickly after an election result. But not this time, with almost all polls (bar a 1News Verian poll in April) showing New Zealand First comfortably above 5%.

Leader (and current deputy PM) Winston Peters sent a clear message to supporters and detractors while speaking in Hamilton yesterday. “We’re getting ready to be fully prepared to do much better,” said Peters of the 2026 election. “But no political party has been under so much scrutiny and criticism unfairly than the party you’re a member of.” And evoking his favourite, Chumbawamba: “We get knocked down, but we get up again.”

Peters was in Hamilton for the New Zealand First annual conference, which this year was attended by about 900 people (and disrupted by several protesters). In a lengthy address yesterday, Peters revealed new party policy (not yet signed onto by the coalition) in the form of a proposed $100b infrastructure fund. In analysis for RNZ, Russell Palmer noted that while Peters intends to push for this policy now, it may end up being on his party’s agenda come 2026 if he can’t win over his cabinet colleagues. With his tenure as deputy prime minister nearing its end, it’s not out of the question that Peters’ re-election campaign is already about to begin.

Coalition hoping for poll bump tonight

new 1News Verian poll will be released tonight, which the government will be quietly hoping provides a better result than the most recent Curia poll made public before the weekend.

That poll, released while the prime minister was in Laos, provided an unwelcome book end to the first 12 months of the coalition government. As reported by The Post, it had support for National down by 4.1 points to 34.9% while Labour had bounced up 3.6% to 30.3%. While it wouldn’t result in a change of government – the centre left bloc would still be a handful of seats short – it’s an interesting indicator of the lukewarm support for both major parties. Polls routinely bump around and none can be taken in isolation, but bar the occasional outlier the trend of the past 12 months has been one of consistency as both blocs have remained relatively steady. Christopher Luxon, unsurprisingly, told reporters: “I just don’t care”.

Writing for Interest, Dan Brunskill suggested that National’s latest drop in support could be due to a series of controversies related to issues of health, from Casey Costello’s questionable smoke free proposals to the recent move to downscale the Dunedin Hospital development.

Labour planning ‘reset moment’

Many commentators saw the collapse of Labour as the defining narrative of last year’s election. “No matter the extenuating circumstances, and again there were many, to go from a historic high, above 50% in the 2020 election, to a result last night below 27%? A horror show,” wrote The Spinoff’s Toby Manhire the day after the election.

The party has spent the last year in reflection mode. In an interview with me last December, Chris Hipkins said he was looking to develop a a “refreshed manifesto” and “a really clear vision for the future of the country” in time for the 2026 election.

Labour has remained relatively quiet over the past year, opting not to “bark at every passing car”. That approach is going to have to change soon. Speaking to AAP in a piece shared here by the Otago Daily Times, Hipkins remained determined he could refresh and reinvigorate his party in time for the 2026 election. “We’ve spent a year not really talking about what we would do differently because we wanted to hear from people,” said Hipkins, who expects to reveal the party’s new direction in a speech next month.

“It will be the reset moment.”

But wait there's more!