by Rob Hosking
Labour’s Parliamentary partner United Future wants to see more of the New Zealand Superannuation Fund (aka the Big Cullen Fund) invested in New Zealand businesses.
Untied Future’s finance spokesman Gordon Copeland (pictured) has asked the Minister of Finance, Michael Cullen, whether it would be possible to use some of the money from the fund to buy minority stakes in on-shore investments, such as wood processing businesses.
He says that if an overseas investor is willing to put money into a venture then the New Zealand government could also put money in too.
"It’s not a matter of picking winners – the overseas investor has done the homework and the winner has already been picked."
Copland is one of the new batch of nine United Future MPs and is deputy chair of Parliament’s finance and expenditure select committee.
A former director of the NZ Refining Company, he worked mostly in the oil industry with Europa and then with BP. He has also been a director of Hikurangi Forest Farms, and since 1984, the financial administrator of the Catholic Archdiocese of Wellington.
His suggestion would, he says, be a way of ensuring New Zealanders have a greater investment in the future, as well as attracting foreign investment in key areas.
"We have this ‘wall of wood’ coming at us that is going to require $6 billion to process. We need to make sure that processing is done here and not overseas."
Dr Cullen is considering Copland’s suggestion.
United Future has supported the government's pre-funded scheme as the best option going, although Copeland says the country missed a big opportunity when it rejected the compulsory saving scheme put up in the 1997 referendum.
Other areas the party wants action on is the encouragement of savings through employer based schemes.
Copeland pressed Cullen on the issue at last week’s finance and expenditure select committee meeting, and while the minister reiterated the government's intention to remove some of the disincentives in that area, he reiterated that no moves are likely before April 2004.
However, that is only a start. There are two parts to Copeland’s approach: getting more New Zealanders to save; and then getting them to invest in their own country.
"We have a mish mash of tax laws that are efficiently disincentives for New Zealanders to invest in their own country."
And he believes New Zealand businesses are not doing enough to highlight the savings issue.
"I think it needs to be talked up in the business community. Economic growth comes from an accumulation of capital, which means people have to save, and I think there needs to be more encouragement of that," Copeland says.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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