Wind turbines on the Tararua mountain range on the outskirts of the town of Palmerston North, New Zealand.
Wind turbines on the Tararua mountain range on the outskirts of the town of Palmerston North, New Zealand. Reuters

The Labour Party in New Zealand has unveiled a "NZ Inc "to drive growth, clean technology to achieve a smart economy, reported NZ Herald.

Labour leader David Cunliffe said a Labour Government would also establish a Sovereign Wealth Fund that will invest in new businesses including clean energy projects. It will leverage the dividend from the remaining stakes in mixed ownership model companies and extract higher oil and gas royalties.

Clean Technology Leader

Unveiling the party's 'NZ Inc' policy, Cunliffe said it would "drive growth, boost clean technology and protect strategic assets to achieve the goal of a sound economy". The NZ Inc policy envisages sustainable growth with a transition from fossil fuels and enshrines New Zealand's ownership of strategic assets. Cunliffe is of the view that New Zealand will be a world leader in clean technology and will power the economy of the future. Along with the sovereign wealth fund, Labour would also set up a 'KiwiShare' programme to protect the state owned energy assets.

Cunliffe said this "visionary policy" would draw more dividend from state owned energy companies to the Wealth fund, that will be managed by the NZ Superannuation Fund, and invest in high growth New Zealand assets. Labour aims to generate new revenues from the oil industry. It can be from new wells or increased royalty levels. A review of the oil and gas royalties will be undertaken to bring them to a fair level without exceeding the rates in Australia. This would help New Zealanders to get a fair share from resources and provide more funds for NZ Inc Sovereign Wealth Fund.

Stake Protection

Mr. Cunliffe said state stakes in the former state owned energy companies would be protected from future sell downs in the form of 'KiwiShares'. An initial corpus of $100 million will be the commitment to make the fund rolling. Then it will grow over time, because of compound revenues from both SOEs (state enterprises) and the oil and gas industry. The fund will create maximum benefit for future strategic assets and clean technologies.

However, the National Party spokesman Steven Joyce described Labour's plan of the wealth fund as yet another way of pre-committing the money already committed a few times over. He noted that the dividends received by the Government from state-owned enterprises are already in use for paying public services like education and health and in debt servicing.