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New Zealand First has an economic policy that will improve the lives of ordinary Kiwis and put New Zealand on a pathway to prosperity. It is based on four key pillars:  

  • The need for a flexible monetary policy.
  • The need to protect New Zealand ownership of key infrastructural assets.
  • The need for an innovative and coherent export plan to rapidly grow our nation’s wealth.
  • A National Savings Plan to free New Zealand from its dependence on foreign savings.

New Zealand First’s economic policy is to capitalize on the natural assets and climate that New Zealand is endowed with and the talent and enterprise of New Zealanders. A new economic direction is needed because New Zealand is at an economic crossroads. In spite of the terms of trade being at a 40 year high our economy is dangerously exposed.

Under the National Government we have failed to diversify the economic base and are now even more vulnerable to a shock. Despite the Christchurch rebuild there is a massive waste of talent and ability with around 150,000 unemployed.

New Zealand First will:

  • Support the primary sector and help it to grow in a sustainable way.
  • Give a high priority to maintaining and building the manufacturing sector.
  • Introduce a government procurement policy that gives preference for New Zealand firms.
  • Reform the Reserve Bank Act to reflect that New Zealand has an export – dependent economy and create a sensible exchange rate regime that serves New Zealand’s economic interests.
  • Reverse the loss of New Zealand’s strategic land and assets to foreign ownership.
  • Give priority to New Zealand industries and communities in setting any programme on tariffs. Future tariff removal will be consistent with the policies and progress of our trading partners.
  • Continue to advocate a comprehensive compulsory savings plan.
  • Pursue policies to protect investors and improve regulation of and confidence in the finance industry.
  • Direct the guardians of the New Zealand Superannuation Fund to prioritize the purchasing of shares in New Zealand infrastructure companies, particularly when they are being sold by overseas investors.

RESEARCH AND DEVELOPMENT

With such a large proportion of the funding of research in New Zealand coming from the government (and going directly to Crown Research Institutes (CRIs), clearly the state must play a key role in leading Research and Development (R&D). However we are unsure how much benefit is derived from this investment.  

The key to a successful research and development policy is the maintenance of balance between genuine blue sky research and research activity which will directly lead to economic advancement. New Zealand must focus its limited research funds where it has a competitive advantage, primarily in expanding export potential.  

However, public good science must also be supported through a dedicated funding pool

At present, New Zealand lags behind the rest of the world in terms of research and development. New Zealand First will actively encourage strategic alliances between industry, the Crown Research Institutes and Tertiary Institutions.

New Zealand First will:

  • Provide tax incentives for businesses to engage in research and development leading to innovation and export growth
  • Increase the proportion of tertiary tuition subsidies for specific courses to increase the number of appropriately qualified graduates (e.g. science and technology).
  • Introduce further scholarships (especially at post-graduate level) to ensure that we keep our best students and provide for research and development expertise.
  • Expand publicly-funded topo-culture research through rural New Zealand.
  • Assist New Zealand companies in developing new technology and facilitate technology transfer.
  • Provide improved lower cost intellectual property protection for New Zealand-based innovators.
  • Provide and encourage venture capital sources for New Zealand innovations.
  • Provide assistance in the marketing of new or innovative products.

FOREIGN INVESTMENT

Too much of New Zealand’s wealth is going overseas. New Zealand First will impose strict controls over foreign ownership and create a comprehensive register of overseas ownership of land and property.

New Zealand’s net overseas debt was $150 billion as at June 2013.

The vast majority of the profits of foreign companies are paid out to their overseas owners. Tens of thousands of hectares of our land continues to be sold. About 70 per cent of our forestry is in foreign ownership.
New Zealand First is not opposed to foreign investment so long as such investment stands the test of being to New Zealand's advantage. New Zealand First stands firm against state asset sales to foreign ownership.

New Zealand First will:

  • Base New Zealand’s foreign investment strategy upon the premise that such investment must be in the interests of New Zealand.  The private interest of foreign shareholders is not our concern, the public interest of New Zealanders is.
  • Establish KiwiFund as a state owned saving scheme so New Zealanders can invest in New Zealand assets and infrastructure.
  • Establish priorities for foreign investment in New Zealand that require such investment to bring new technology and lead to employment and export growth or import substitution.
  • Create a comprehensive register of foreign ownership of land.

FOREIGN OWNERSHIP

New Zealand First holds that the transfer of ownership of land, assets, and businesses in New Zealand to non-resident foreign citizens and companies does not constitute investment. It is simply the transfer of wealth, profits, and revenue streams to overseas interests. This affects all New Zealanders, impacting negatively on our balance of payments, keeping interest rates for New Zealand borrowers unnecessarily high, increasing foreign debt, and inflating the New Zealand dollar exchange rate to the detriment of businesses and exporters.

The unrestricted sale of houses in New Zealand to non-residents is pushing prices up and driving home ownership out of the reach of New Zealand families and first home buyers.

New Zealand First is not opposed to new foreign investment so long as such new investment stands the test of being to New Zealand's advantage. This may include such things as the building of new houses, breaking in and conversion of new farmland, establishment of new joint venture manufacturing and processing businesses, establishment of new aquaculture ventures, or the planting of new forests.

New Zealand First stands firm against the sale of State-owned and other strategic assets to foreign interests.

New Zealand First will:

  • Impose strict controls over foreign ownership and create a comprehensive register of overseas ownership of land and property.
  • Restrict ownership of houses and land including farmland to New Zealand citizens and to permanent residents who are exercising their right to residence.
  • In the case of the purchase of existing houses, land, or businesses to corporate ownership, joint ventures, and overseas-based trusts and funds, require such companies or other legal entities to ensure a majority New Zealand shareholding before being permitted to gain freehold title.
  • Prohibit the further sale of strategic state assets to overseas buyers, and institute programmes to restore New Zealand ownership of SOEs and other assets already sold.

REGIONAL DEVELOPMENT

New Zealand First believes that Crown royalties, through a Royalties for Regions policy, should play a role in contributing to the development of regional communities and economies.

Under our proposal, over $80 million would have contributed towards regional development initiatives in the 2012/13 year.

New Zealand is more prosperous when the regions are thriving.

Developed, diversified regional economies create skilled jobs and encourage people to move to the provinces, thereby also easing urban housing pressures.

New Zealand First will:

  • Ensure that the involvement of local people in decision making and development of their areas through the proposed Royalties for Regions scheme has the potential to help concerned resident and mineral extractors reach agreement over environmental issues.
  • Ensure the regional fund could contribute to local projects and developments upon advice from local authorities, interest groups and iwi.  
  • Ensure that twenty five per cent of the royalties paid on extraction of minerals – whether it be coal, limestone, lignite, gold or others will be placed in a fund for use in regional development in the region of extraction.
  • Provide economic and social benefits conferred to regional communities through the scheme which will allow local communities to plan and spend more efficiently and effectively.

MANUFACTURING

International research show that for every job created in manufacturing up to five further jobs are created elsewhere.

New Zealand First will:

  • Introduce a lower (20 per cent) business tax rate for exporters.
  • Give preference to New Zealand firms in government procurement.
  • Reform the Reserve Bank Act so it can better manage our currency.
  • Have a capital guarantee scheme for small to medium enterprises.
  • Reintroduce tax credits for research and development.
  • Provide accelerated depreciation for plant and equipment.
  • Pursue policies to add value to raw materials.

STATE OWNED ENTERPRISES

State asset sales have been a swindle perpetrated on the public of New Zealand.

What New Zealanders already owned is being sold back to some of them at enormous cost and loss of government revenue. Many of these strategic assets have ended up with a large proportion of foreign ownership. The National Government had no mandate for its state asset sales programme.

New Zealand First opposed the sell-off of energy companies and Air New Zealand by the National Government.
 
New Zealand First will:

  • Commit to buying back the shares at no greater price than paid by the first purchaser.
  • Stop further state asset sales. If considered appropriate, and only where necessary, public assets currently in the hands of the government will be commercially managed in the public interest and ownership.
  • Bring the energy companies sold by the National Government back into public ownership and put them back under a single generating entity.
  • Establish KiwiFund, a government owned KiwiSaver provider, which will have a focus on investing in New Zealand assets and infrastructure.
  • Ensure that the government has first right of refusal on the resale of any former state assets, in particular 'infrastructure' assets.
  • Direct the guardians of the New Zealand Superannuation Fund to prioritize the purchasing of shares in New Zealand infrastructure companies, particularly when they are being sold by overseas investors, with the aim of building a solid base of New Zealand ownership of these assets. This shall be conducted at arm’s length, with no ministerial interference, and at the discretion of the guardians so as not to distort the market.

Rt Hon Winston Peters MP on this policy

"New Zealand First’s economic policy is to capitalize on the natural assets and climate that New Zealand is endowed with and the talent and enterprise of New Zealanders. A new economic direction is needed because New Zealand is at an economic crossroads. In spite of the terms of trade being at a 40 year high our economy is dangerously exposed. Under the National Government we have failed to diversify the economic base and are now even more vulnerable to a shock. Despite the Christchurch rebuild there is a massive waste of talent and ability with around 150,000 unemployed.