SAVINGS AND INVESTMENT
One of our fundamental economic failings as a nation has been allowing too much of our key infrastructure to fall into foreign ownership, which has effectively turned New Zealand workers into cheap labour for these investors to exploit.
The same can be said for some of our key industries and New Zealand First has signalled clearly its opposition to proposals for Fonterra’s 'partial listing' and to any sell off of Auckland International Airport. The Government's primary concern must be the national interest - and this needs to be an actively pursued long-term goal.
Compounding the difficulties in offsetting this flow of funds overseas is the comparative lack of savings by New Zealanders when compared to other developed nations. Government, in an economy the size of New Zealand's, must accept that as one of the larger players in the economy and in the absence of other large players domestically, it has a crucial role in securing our key infrastructure.
Government must also play a far greater role in facilitating the building of a long-term sustainable savings base. Positive developments in this area have been stalled by Government which has added to our debt crisis. New Zealand First has long advocated a comprehensive compulsory savings plan and New Zealand’s failure to take up this plan now sees New Zealand seriously exposed.
Security of savings is another key issue and New Zealand First will be actively pursuing policies to protect investors and improve regulation of and confidence in the finance industry.
Long-term secure investment is an essential element of achieving sustainable high economic growth. However, investment must be viewed as a means to an end rather than an end in and of itself and must always be viewed in the national interest, not just in the interests of profit-driven corporates.
New Zealand First will:
- Ensure that the government has first right of refusal on the resale of any former state assets, in particular infrastructure assets.
- Stop 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.
- Direct the guardians of the New Zealand Superannuation Fund to prioritise 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.
- Require the fund managers to invest in New Zealand infrastructure and growth industries including making funds available at competitive interest rates to the New Zealand Transport Agency, ONTRACK, and local government for capital projects.
- Establish the ‘New Zealand Fund’ for New Zealanders to invest in New Zealand assets and infrastructure.
- Encourage investment in New Zealand by providing a government guarantee on the first $100,000 of investment in New Zealand-owned banks.
- Limit foreign investment in strategic/infrastructural assets to 24.9 per cent
- Ensure that any foreign investment must be in the interests of New Zealand.
- Ensure that priorities for foreign investment in New Zealand will depend on whether this brings new technology and employment and export growth.
- Review the process of local government sales of infrastructure assets.
- Strike a balance between preserving the nation's infrastructure in New Zealand hands and ensuring that New Zealand enterprises can enter partnerships with international agencies for their mutual benefit.
- Promote the creation of an internal investment/savings base to provide a clear alternative to foreign credit for the development of New Zealand infrastructure and businesses.
- Build on the 1997 New Zealand First initiative to drastically reduce the sales of land to foreigners each year.
- Strengthen the foreign investment policy framework and operational requirements as they relate to the work of the Overseas Investment Office to protect the national interest.
- Ensure the O.I.O understands the difference between genuine foreign investment and an overseas corporate raid on New Zealand assets.
New Zealand First will establish a new KiwiSaver option – KiwiFund. This will be a state run KiwiSaver provider. It will offer New Zealanders the option of a saving scheme with minimal fees and a guaranteed return of capital.
The main features of this innovation scheme are:
- KiwiFund will be a fund that invests much more in New Zealand land, assets, enterprises and infrastructure.
- KiwiFund will offer minimal fees because its purpose is to maximize returns to savers not make profits for fund managers and owners.
- KiwiFund will ensure that much of the projected flow of over $22 billion in fees into private providers over the next 30 years will instead go to boost the savings of New Zealanders.
- KiwiFund will compel current KiwiSavers to raise their game because New Zealanders will in future have an attractive state run option.
- KiwiFund will be open to all New Zealand citizens and permanent residents.
- To assist narrowing the widening incomes gap in New Zealand. A 2011 OECD report stated that the incomes gap in New Zealand was the worst for OECD countries over the previous 20 years.
- New Zealanders currently spend 14 per cent of their household income on food at home (USA only half of our percentage) and pay the fifth highest prices for food in the world. This is unacceptable for an efficient food producing nation and is grossly unfair to struggling low to medium income earners.
- To tax only those activities which are appropriate for income taxation having regard to the wider social ramifications of the system.
- To replace the existing tax system with a fair and equitable system based on people's capacity to pay, so that people and businesses who benefit from the higher incomes made possible by New Zealand’s economic potential will bear a greater portion of the tax burden than those with lower incomes.
- To replace the existing tax system with one which is clear and easily understandable, thus minimising confusion and costs.
- To ensure that the tax system is effective, raising only sufficient revenue to enable effective and efficient government programmes to be paid for without excessively burdening taxpayers and handicapping the economy.
GST OFF YOUR FOOD
Food is an absolute necessity for life and is not an appropriate object for taxation; and rising food prices over many years have been a major contributor to child poverty, to financial inequality and growing resentment, and many adverse health issues in New Zealand.
The exemption will not apply to food sold as part of a service in restaurants and takeaways, so that GST will be still be added to these food services, as is currently the case. However the food purchased by those outlets will be free of GST, and therefore the end consumer will still benefit from reduced costs at restaurants and takeaways.
This policy is estimated to cost $3 billion per year and will be funded by clamping down on tax evasion and the black economy (estimated to run at $7 billion annually).
Australia and other countries such as the United Kingdom apply differential tax rates on food and many other products.
New Zealand First will:
- Exempt food from liability for GST as a way of helping families on low-medium incomes, who pay a much greater proportion of income on food than those on higher incomes, thus assisting the battle to reverse the widening incomes and wealth gaps in New Zealand. The average household spends at least $200 per week on food (about 20 per cent of household expenditure on items that have a GST component). The benefit for families from lower food costs will therefore be significant.
- Ensure that most of the food an average family puts in their supermarket trolley each week will be GST exempt.
GST OFF RATES
In addition, as part of a fair system, New Zealand First will remove GST from rates on residential property. Rates are a major burden, particularly for those on fixed incomes. This “tax on a tax deceit” has to end, and it will.
TAX EVASION CRACK-DOWN
The total effect on tax evasion in New Zealand has been estimated at $7 billion per year.
New Zealand First will:
- Implement a system where tax evasion is treated seriously. The black economy is a major drain on Crown revenue.
- Crackdown on the e-economy and the new challenges they present to the tax base. International corporates such as Google and Facebook are effectively paying minimal tax in New Zealand. This will be urgently addressed by New Zealand First as a part of the tax evasion crackdown.
TAX ADVANTAGES TO HELP YOU SAVE
The current tax regime is acting as a disincentive to save.
New Zealand First will:
- Use the tax system to encourage savings, especially for people saving for a deposit for a first home.
- Ensure that earnings from approved saving schemes will carry a tax advantage.
BETTER WAGES, NOT MORE HAND-OUTS
New Zealand First believes the income support payment “Working for Families” needs a thorough rethink. It has provided a cover for employers to not pay decent wages, it discriminates against those without children, and it complicates the tax/benefit system.
The reduction in GST on food will also reduce the need for ‘Working for Families’.
The cost of Working for Families is currently around $2.6m annually.
New Zealand First will review “Working for Families” preferring that everyone gets at least a genuine living wage.
Rt Hon Winston Peters MP on this policy
"One of our fundamental economic failings as a nation has been allowing too much of our key infrastructure to fall into foreign ownership, which has effectively turned New Zealand workers into cheap labour for these investors to exploit. The same can be said for some of our key industries and New Zealand First has signalled clearly its opposition to proposals for Fonterra’s 'partial listing' and to any sell off of Auckland International Airport. The Government's primary concern must be the national interest - and this needs to be an actively pursued long-term goal."