Labour has admitted key details about its Future Fund, including the cost to the Crown and which state assets will be rolled into it, will not be released until after voters have gone to the polls.
On Tuesday, Labour’s finance spokeswoman Barbara Edmonds admitted the party doesn’t itself know which public assets will go in the fund, and won’t know until it gets advice from officials after the election.
Explaining why this was necessary, Edmonds said some state-owned enterprises (SOEs) may have Treaty of Waitangi obligations attached to them.
The Government would need advice on these obligations, which could only come after an election, meaning Labour will not decide on which assets go into the fund before Kiwis go to the polls.
“We haven’t decided what assets to put in it [the fund], because different assets have different caveats that come with it,” Edmonds said.
“For example, some assets have Treaty claims and overlay, like first right of refusal rights if it gets sold.”
It has been expected the full cost of the fund would be included in Labour’s fiscal plan, which will be published prior to the election.
The National Party has seized on the admission, claiming that this Labour Party, like the one elected in 2017, will kick policy development to publicly funded working groups.
The party has also claimed the policy will see up to $700 million worth of revenue lost to the Crown. That calculation is based on the amount of dividend income that could be lost to the Crown if it were diverted to the Future Fund. Currently, dividends are spent on the core public service.
National’s campaign chair Simeon Brown said Labour should front up about the amount of dividend revenue that will be diverted from the main Crown account into the Fund.
“They’ve said they’re going to use the dividends from our SOEs to go and invest in other companies, the reality is that means they are going to have to make cuts in health, in education, in law and order,” Brown said.
Brown said working the detail of the policy out after the election meant Labour was “clearly going back to the bad old days of policy by working group”.
In October of last year, Labour released a plan for the Future Fund, which is meant to invest in growing New Zealand firms. It is also designed to act as a holding company for a number of SOEs.
The dividends from these SOEs will be paid into the fund, allowing it to grow.
It will also be given $200 million in seed funding from a future Labour Government.
When the policy was announced, Labour refused to say which SOEs would be rolled into the fund, citing commercial sensitivities. The reasoning changed on Tuesday, with Labour now saying it wanted to take advice on things like Treaty obligations.
Asked on her way into Labour’s caucus meeting, whether Labour had decided which assets would go into the fund, Edmonds said “no”.
Edmonds said Labour had received some advice on the policy, and that advice had urged her to wait until it was in government.
“The advice that was given to us when we sort of did some small consultation and developing that policy, it was wait till you get into government, get the advice from the officials, what those assets are, what’s the caveat on top of it before you decide what goes into it,” she said.
Edmonds said she wanted to wait to get official advice before deciding what would go in the fund.
“We’re not going to be reckless and just pick a couple of assets and pop them in without actually knowing what the fiscal cost is. Is there any Treaty clauses and any other caveats that are in relation to those assets?
“I’m very measured and very considered when it comes to that sort of policy development,” she said.
SOEs have been a battleground for Treaty litigation for decades.
The landmark Lands case in 1987 found the transfer of assets into the new SOEs – without establishing any system to consider whether the transfer of some assets would be inconsistent with the principles of the Treaty – was unlawful.
Later, when asked for examples of Treaty concerns, Edmonds cited Pāmu-Landcorp, a state-owned farming company. Some of the land farmed by Pāmu has Treaty covenants attached to it.
“Some of the land that is available there, which does provide a return to the Government, is subject to Treaty settlements,” Edmonds said.
Asked whether there were other examples, Edmonds replied, “I don’t know whether there is for example if an asset has a landholding which is subject to a Treaty settlement”.
On Sunday, speaking to TVNZ’s Q&A with Jack Tame, Labour leader Chris Hipkins described the fund as the “cornerstone” of Labour’s efforts to create new well-paying jobs.
On Tuesday, Edmonds said Labour did not actually know how many jobs would be created by the Future Fund. This is in part because the party does not know what the fund will look like, despite it being a “cornerstone” of their jobs policy.
Edmonds said the number of jobs created by the fund would “depend on where the investment goes to“.
“I‘ve been speaking a lot to the Irish Strategic Investment Fund, which is ... very much similar”.
“It has a dual mandate, which is to invest with commercial returns for economic activity in Ireland. They’ve seen some good job creation as a result of that and some very strong returns since 2014 when it was established,” she said.