The National Party would change the law to direct the Super Fund to invest 40 per cent of its funds into New Zealand businesses, John Key announced today.
The policy would see a greater amount invested into New Zealand and amend the New Zealand Superannuitants and Retirement Income Act.
As of June 30 this year, 23 per cent of the fund was already invested in New Zealand.
Yesterday, Dr Cullen released the Government's economic policy regarding bonds that could be taken up by the New Zealand Superannuation Fund and KiwiSaver providers who he wanted to invest more in New Zealand.
"It is a question of how we can be sure that the developing assets we have in New Zealand... can also drive New Zealand's economy from within," Dr Cullen said yesterday.
"I am certainly not saying we want to direct those [funds], but [we will look at] what changes in policy would encourage those running KiwiSaver funds, the Guardians of New Zealand Superannuation Fund to say 'let's up our allocation to the New Zealand market'."
Mr Key went one step further today and said he would legislate for the fund to have at least a 40 per cent target in a range of assets including bonds to fund large infrastructure projects.
"National believes that a greater proportion of this increasing pool of capital, which belongs to all New Zealanders, should be invested in New Zealand to grow our economy," Mr Key said.
The fund, set up by Labour, gets $2 billion a year from the Government to invest, so the money can be drawn down on in the future to fund national superannuation.
Mr Key said using that money would be better used to invest in the New Zealand productive sector and broaden and deepen the capital markets.
"In the short term, in a world where money for investment is going to be more tightly held and more closely guarded, it will help ensure New Zealand has the investment capital we need to get out of recession and into a period of solid and sustainable growth," Mr Key said.
"In the longer term it will give New Zealand businesses a greater opportunity to grow from a domestic base and grow under New Zealand ownership further than they would otherwise have been able to."
Mr Key said in every other way the Guardians of the Fund would continue to invest as they do now on a prudent, commercial basis.
"In particular, the guardians will determine the appropriate rate at which to increase their investment in New Zealand to 40 per cent, taking into account their need to manage their overall risk profile, the availability of quality investments, and the impact of increased investment on local markets."
The range of investment opportunities available to the fund would include New Zealand-listed equities, government bonds, high-quality commercial paper, local government fixed-interest securities, private equity, property, infrastructure, forestry, and commodities.
Mr Key said National would also work to create more investment opportunities that the Super Fund can take up in New Zealand, including longer-dated infrastructure bonds.
"Additional investments in New Zealand infrastructure made by the fund as a result of this policy change will be over and above the increased government commitment to infrastructure that we have already announced," Mr Key said.
- with NZPA