Foreign investment in Cunliffe's sights

Labour leader David Cunliffe. Photo / Paul Taylor

Labour leader David Cunliffe has signalled major changes in foreign investment if his party is elected.

Mr Cunliffe's speech to the New Zealand Initiative in Auckland this morning did not include any new policy, but aimed to underline his economic credentials and spell out Labour's wider economic vision.

The theme of the speech was that New Zealand needed an economic upgrade which focused on value, not volume.

To make this upgrade, the country would require much greater investment in a wider range of sectors, which Labour would encourage through universal Kiwisaver and by restarting contributions to the Super Fund.

An upgrade would also depend on well-managed investment from overseas.

Mr Cunliffe said foreign direct investment was poorly managed at present and New Zealanders were losing out.

"Overseas investors are buying up land, farms and good companies, then sending the profits and jobs offshore."

He said Labour would revamp foreign direct investment to attract quality investors with credible business cases designed around creating jobs and providing new technology to New Zealand companies.

It would make changes to the Overseas Investment Office rules to ensure that investors brought access to leading-edge technology and new overseas markets.

"Overseas investors are welcome to be part of our economy but they must contribute to the upgrade."

Mr Cunliffe foreshadowed major Crown investments in regional areas, citing a new rail line to Marsden Point in Northland and dredging the harbour at Opotiki to drive new aquaculture projects.

He spoke of expanding research projects which fuelled specific industries, such as Scion's forestry schemes in Rotorua or the Wine Research Centre in Marlborough.

Mr Cunliffe railed against trickle-down economics and said that neoliberal policies had pushed a growing share of New Zealand's economy into the hands of the top few per cent.

The Labour leader said New Zealand needed to follow the example of small states such as Sweden, Norway and Singapore by driving its own sustainable long-term growth.

He said it was not a serious long-term strategy to "tie our economic wellbeing to forces that are largely beyond our control".

"As an old Chinese proverb says: 'A peasant must stand a long time on a hillside with his mouth open before a roast duck flies in'."

He also reiterated Labour promises to introduce a capital gains tax, renew the R&D tax credit, and to reform monetary policy.