"In just seven years' time, they'll have enough money to buy every share in every public company in New Zealand. Soon, they could buy all the farms. Indeed, one day the government could wind up owning literally everything. And you know what that's called ... don't you?"
Thus intoned the most famous electoral advertisement in New Zealand political history: the National Party's 1975 "Dancing Cossacks" ad.
Truly, we are right through the looking glass when a National Party led by John Key offers as its own policy the dread spectre that Rob Muldoon's National Party conjured to win power a generation ago -- and the Labour party sounds the alarm.
As David Skilling has noted, there is certainly an appeal in having a large public fund seeking long-term investments within New Zealand: it becomes the provider of the debt-style finance for broadband infrastructure that people like Rod Drury have been talking about.
Indeed, if the Superannuation Fund were commanded by a National government to make 40% of its investments within New Zealand, it would be obliged to seek such projects, or risk its sheer size seriously distorting the share market.
It's not going too far to say that it would save National's big-bang fibre-to-every-home plan, given the telco sector's lack of enthusiasm for an opportunity that doesn't follow strict commercial logic. There are 14 billion big ones in the bank, just waiting to be wooed into a Public-Private Partnership.
But that would be a very major change to the purpose of the fund: which is to fund a future liability as a large number of New Zealanders reach retirement. To this end it has been placed in the control of independent managers tasked with achieving the best possible return for New Zealanders, which will not necessarily lie in New Zealand. A diversified portfolio also spreads the financial risk. Political direction of its decisions undermines both goals.
The fund is not pure as it is. A truly agnostic strategy wouldn't have 23% of the funds investments located in New Zealand as it is, and the fund has rightly responded to pressure to divest from ethically problematic holdings. There is certainly a case for the fund to buy into long-term infrastructure investments. (Michael Cullen himself mused on policy changes that might make such investment more attractive to Superannuation and Kiwisaver fund managers, and he's been talking for years about a shift from physical to financial assets for the Crown.)
But if the managers were to be ordered to do so by a government that has pet policies it would like to fly -- and Key ran quite close to saying that on Morning Report today -- then we're into very different territory.
David Farrar was clearly doing it for the team when he blogged the announcement yesterday (and some of his regulars are clearly horrified), while the classical liberals are up in arms.
The Greens are delighted, but they hated the Super Fund from the beginning (of note: Rod Donald's 2002 speech Cullen Super Fund must be stopped). So these times -- when prospective parties of government are reaching around for policies that offer a bounty without direct fiscal costs -- make for strange bedfellows.
---
This week's Media7, focusing on crime and the media and how it steers the debate, is online. The panel is Catriona McLennan and Jock Anderson -- who functioned as yin and yang except when they were agreeing --and Jeremy Rose of Scoop and Radio NZ. Also, Simon Pound asks a psychologist about the stuff people write in Your Views in the Herald.
The TVNZ ondemand version is here. The Windows media clips of the show are here.
The podcast feed is here and it'll turn up some time soon on our YouTube channel.
--
And meanwhile, thanks to Christchurch reader Bob Munro for photographic evidence that while the Act Party might have "zero tolerance for crime", it's liberal as all-get-out when it comes to spelling and stuff.
Local candidate Aaron Keown appears to have been running around patching billboards in the past few days, and I feared we'd missed out. But here's one he didn't get to:
And here's a patched one. The correct spelling of the word "emissions" has been stapled on over the original. That must have been a fun job …
NB: This just in! Flat city-dweller and swell guy Ian Dalziel has come up with an un-altered "emmissions" billboard! All your politically incorrect spellings are belong to us!
---
And finally, former Clark press secretary David Lewis points out on Pundit that the reviews of this week's TV One leaders' debate were really very similar to those after the 2005 Clark-Brash debate. Personally, it struck me as a contest that told me a bit about where the respective candidates are at personally, but remarkably little about where they're going politically.