Speaker 1: Kyoda. I'm Richard Martin in for Chelsea Daniels and this
Speaker 1: is the Front Page, a daily podcast presented by the
Speaker 1: New Zealand Herald. The government's focus on economic growth and
Speaker 1: foreign investment is back in the spotlight. Later this week,
Speaker 1: the much anticipated Investment Summit will take place in Auckland.
Speaker 1: Businesses from over fourteen countries with six trillion dollars of
Speaker 1: capital will be in attendance across Thursday and Friday, with
Speaker 1: government ministers and labor representatives in attendance. It comes at
Speaker 1: a critical time for the government, with mixed pole results
Speaker 1: suggesting a difficult path to re election next year. Today
Speaker 1: on the Front Page to talk us through who will
Speaker 1: be in attendance and what it all means for the government,
Speaker 1: we're joined by Enzed Herald Deputy Political editor and host
Speaker 1: of On the Tiles podcast, Thomas Coglin. Thomas, what is
Speaker 1: the purpose of the summit? What is the government actually
Speaker 1: hoping to get out of it?
Speaker 2: Well, the government wants to encourage more investment in New
Speaker 2: Zealand economy in general. It's keen to get more foreign
Speaker 2: investment into all parts of the New Zealand economy. So
Speaker 2: that means you know, you start a business somewhere, perhaps
Speaker 2: there is a foreign investor out there who wants to
Speaker 2: buy into your business and help you grow it overseas.
Speaker 3: That's the sort of broader government goal.
Speaker 2: More specifically, this conference is about private investment and government projects,
Speaker 2: so the public private partnerships. For example, the government is
Speaker 2: more than a handful of sort of infrastructure projects. The
Speaker 2: mainly in the infrastructure area that it is keen to build,
Speaker 2: and it is less inclined to borrow the money and
Speaker 2: do the building themselves as New Zealanders tended to do
Speaker 2: in the past. You know, you borrow a whole lot
Speaker 2: of money and.
Speaker 3: You build a tunnel or whatever.
Speaker 2: The government is keen to partner up with private investors
Speaker 2: overseas who will raise the capital themselves, partner with builders
Speaker 2: to deliver the project. They'll run it for a certain
Speaker 2: amount of time. I mean, this is all sort of hypothetical.
Speaker 2: These contracts look different depending on the project, but that's
Speaker 2: just sort of your boilerplate example of how it works.
Speaker 2: So the government's basically got a lot of infrastructure projects.
Speaker 2: That's key to tickets in private finance. For these investors
Speaker 2: from overseas are coming to have a look at them
Speaker 2: and see if they if they stack out.
Speaker 1: In layman terms, it's basically a big sales pitch to
Speaker 1: the world, right.
Speaker 2: Yeah, it's a it's a public private partnership sales convention.
Speaker 3: Really.
Speaker 2: They come in and if they like what they see,
Speaker 2: they'll they'll ope ab out their walllets and potentially invested that.
Speaker 1: Okay, So what are some of the key businesses that
Speaker 1: are going to be in attendance because we're looking at
Speaker 1: around one hundred or so, right.
Speaker 2: Yeah, about one hundred businesses or organizations. Some of them
Speaker 2: are small local construction firms and then you've got like
Speaker 2: large ewe organizations. My Tagic Holdings from the South Island
Speaker 2: is coming up. So these are these are like construction
Speaker 2: and professional services firms, law firms from New Zealand. So
Speaker 2: these are New Zealand firms that would be partnering with
Speaker 2: these seas firms to try and deliver projects. If their
Speaker 2: construction company or help with the legal you know that
Speaker 2: the legal infrastructure of New Zealand. If their law firm.
Speaker 2: You know, if you're you're a big international investment, you
Speaker 2: want to you want to pick up the front of
Speaker 2: a New Zealand lawyer to say, you know, how does
Speaker 2: the r M A, how does the RMA work. That's
Speaker 2: a that's a long conversation. And then you've got larger
Speaker 2: organizations that are keen to get involved like that. They've
Speaker 2: got some some pretty big portfolios at the moment and
Speaker 2: they might be looking to say, you know that they've
Speaker 2: got some local expertise. I mean to use the Nahoo
Speaker 2: example again, they know the South Island back to front.
Speaker 2: They've got a lot of capital themselves, but they might
Speaker 2: want to partner up with a with an even larger
Speaker 2: investment front from overseas to to do something to match
Speaker 2: the capital and skills that I've got with with even
Speaker 2: more capital from offshore. So that's the that's the local
Speaker 2: side of things like Morrison's as there as well that
Speaker 2: there are large New Zealand firm that that that manages funds.
Speaker 3: You know, it's not it's not all international.
Speaker 2: Then you've got some some large sort of blue chip
Speaker 2: firms from overseas. So CVPQ, which is a big Canadian
Speaker 2: and investment investment fund. They were the ones who were
Speaker 2: looking at doing the Auckland light Rail public private partnership
Speaker 2: from a few years ago before they've done before that
Speaker 2: fell apart.
Speaker 3: That's one of them.
Speaker 2: You've got City Bank, one of the big American banks,
Speaker 2: but some of the large Chinese Chinese banks which which
Speaker 2: have a claim to being some of the some of
Speaker 2: the largest banks in the world, head Construction, so they're
Speaker 2: involved in the transmission gully provate public private partnership. China
Speaker 2: Construction Bank, another very large Chinese bank, Hyundai, well a
Speaker 2: member of the Hyundai group, so that that they were
Speaker 2: obviously involved in the in the Theory project that that
Speaker 2: that hasn't been going so well, but but that clearly
Speaker 2: still interested enough to come over. So your big big films.
Speaker 2: So there are also some Kiwi savers providers like Milford
Speaker 2: Milford Asset Management who obviously do managed funds, but they
Speaker 2: also run quite a popular kiwisaver so that they're here
Speaker 2: on the on the New Zealand side of things, mid
Speaker 2: Tubishi's here. So some really some really big names and
Speaker 2: familiar names. But I think you have our colleagues across
Speaker 2: the corridor at Businesses have done some some good reporting
Speaker 2: on this that there are some big since thes as well,
Speaker 2: like you know, the government's were making a big push
Speaker 2: to Abu Dhabi and sorry, the United Barer Emirates and
Speaker 2: some of the large and some of the large immorti
Speaker 2: funds are not are not here. So so look it's yeah,
Speaker 2: you can you can find some big names, but there
Speaker 2: are also some some some places, some some firms that
Speaker 2: you'd expect to see that that that that are not there.
Speaker 1: Yees, So looking at that choice of firms and I
Speaker 1: guess also the firms that that are not going to
Speaker 1: be attending. What does that really say about what this
Speaker 1: government is targeting?
Speaker 3: The government is quite kean philosophically.
Speaker 2: The government thinks that New Zealand would be better off if
Speaker 2: it were more connected to international capital markets. If if
Speaker 2: if New Zealand was seen as an attractive place to invest,
Speaker 2: that would mean there would be more investment. And when
Speaker 2: there is more investment, arguably the cost of capital decreases
Speaker 2: because people there's so much demand to invest in New
Speaker 2: Zealand that that people are willing to people are people
Speaker 2: are willing to cut their pricess in theory, so so
Speaker 2: so the government's of philosophical ideas more investment equals more
Speaker 2: and more foreign investment in New Zealand means of all
Speaker 2: the better economy and certainly when you look at the
Speaker 2: relationship between foreign investment and things like productivity, and there's
Speaker 2: some good evidence that foreign investment is good for that.
Speaker 2: In terms of who's invited, I mean, the government doesn't
Speaker 2: want any kind of low profile, kind of not all
Speaker 2: that flash foreign funds coming and and certainly, you know,
Speaker 2: it doesn't look like there's anyone on that list who's
Speaker 2: just making up the numbers for it that way. So
Speaker 2: so credit to the government, I guess that managed to find,
Speaker 2: you know, a fairly solid slate. But the list is
Speaker 2: mainly full of firms that have money to invest and
Speaker 2: then then firms that have the construction, legal professional services
Speaker 2: ability to deliver on on that on that investment, anyone
Speaker 2: with money was probably probably welcome, and then I guess
Speaker 2: you wouldn't want any kind of sort of dark money obviously,
Speaker 2: but it doesn't appear that that's is the case.
Speaker 4: With the schools, a private partner comes along and build
Speaker 4: the school and then rather than just building something and
Speaker 4: handing over to the ministry or school to maintain, which
Speaker 4: you know, I think anyone listening will know from our
Speaker 4: school property experience, the government has done really badly. It's
Speaker 4: while we have rocking school buildings all over the country.
Speaker 4: In a PPP a deliverer of the project in maintainment
Speaker 4: for twenty five thirty years now. We've paid that so
Speaker 4: it's not going maintenance, but that's built into the contract
Speaker 4: and as an availability of payment and a maintenance payment
Speaker 4: and all of those things. But they have to maintain
Speaker 4: it to specified performance standards. And anyone who visits the
Speaker 4: PPP schools that we have out there now will know
Speaker 4: that are really well maintained. They're very high quality schools
Speaker 4: and so you get what you're paid for.
Speaker 1: Private public partnerships are something that this government is keen on,
Speaker 1: but Business Desk reported last week that there aren't actually
Speaker 1: that many ready to go in the near term.
Speaker 3: Is that correct, Yeah, that's correct.
Speaker 2: There's the government publishes these investment statements every cord. I
Speaker 2: believe they were started by labor, but the current government
Speaker 2: has begun publishing them more regular so that people labor.
Speaker 2: Labor wasn't so so flash on publishing them in a
Speaker 2: timely manner, so that the government, the government's publishing them
Speaker 2: very regularly, so you get a look up of the
Speaker 2: hood at what's happening investment wise, and at the moment, Yeah,
Speaker 2: there there aren't very many PPPs ready to go to market,
Speaker 2: just for I think are the first stage of the
Speaker 2: Northland Expressway, which to be fair is a very large
Speaker 2: PPP if that happens, and then a couple of smaller projects.
Speaker 2: Chris Bishop, I think, in that story said that actually
Speaker 2: that's quite a lot to go to market with it once,
Speaker 2: and I guess you know, he's probably right, mainly because
Speaker 2: that Northland Expressway projects so big. But certainly, you know,
Speaker 2: if you if you're having all these people too Ortland
Speaker 2: for the summit, you'll want to have a deeper, a
Speaker 2: bigger stand to offer. The government is saying, well, look,
Speaker 2: this is just the start, and this part of this
Speaker 2: is about forging relationships with these businesses so that in
Speaker 2: the long term, is we have more of these PPPs
Speaker 2: go to market, that New Zealand is sort of a
Speaker 2: trusted and reliable partner for them, and so perhaps the
Speaker 2: relationships that are built at this at this summit leads
Speaker 2: to PPP investments down the track. But you know, obviously
Speaker 2: that time will tell whether they're right from thinking that,
Speaker 2: But certainly if it goes well, you know, maybe who
Speaker 2: knows five years time, some of these other PPPs go
Speaker 2: to market. Some of the some of the relationships that
Speaker 2: will forged this week be a fruit from terms of investment.
Speaker 1: Labour's Farbara Edmonds is going to be there. Does this
Speaker 1: suggest that we might finally see some cross party consensus
Speaker 1: on infrastructure. Surely Labor has some different priorities on what
Speaker 1: infrastructure it wants to see built.
Speaker 3: Yeah.
Speaker 2: I think one of the main things for Labor, one
Speaker 2: of the main things for PPPs in general, is market certainty.
Speaker 2: When things go really bad, a new government comes and
Speaker 2: rips up contracts and changes the investment environment, and that
Speaker 2: means that as a country, investors are less likely to
Speaker 2: come here and sit up shop because they don't know
Speaker 2: what the next government's going to do.
Speaker 3: Now.
Speaker 2: When Labor got into office last time around, it was
Speaker 2: not philosophically very keen on PPPs, but.
Speaker 3: It didn't rip up any contracts.
Speaker 2: You know that the Transmission Gully PPP was finished and
Speaker 2: had a funding top up and then opened by Labor.
Speaker 2: Quite the fact that Labor wasn't very keen on the
Speaker 2: idea of PPPs, it's still it's still allowed the project
Speaker 2: to go ahead. And and so I think the fact
Speaker 2: that Barbaria Edmonds is there sort of says like, hey, look,
Speaker 2: you know, we're obviously with a labor party. We absolutely
Speaker 2: different values and views on doing infrastructure, but don't be
Speaker 2: afraid of the sovereign risk aspect to investing in New
Speaker 2: Zealand because we're pro investment too. So I think there's
Speaker 2: actually quite a big thing that she is there, quite
Speaker 2: a big signal to those investors to come here, and particularly,
Speaker 2: you know when you see all the crazy stuff that's
Speaker 2: happening in the United States and actually some crazy stuff
Speaker 2: that's happening in Europe and South am Euerica too, these
Speaker 2: these big funds might look at you know, boring old
Speaker 2: New Zealand and think, well, great, invest a few hundred
Speaker 2: million dollars in building a road, and we've got this
Speaker 2: asset which makes money for us over over a few decades,
Speaker 2: and the future government isn't going to come along and
Speaker 2: rip it up and cost us, you know, one hundreds
Speaker 2: of millions of dollars. That the fact that that Barbaria
Speaker 2: Edmonds is there gives them a lot of a lot
Speaker 2: of certainty. I think that whatever happens their investments, I say,
Speaker 2: under a future government, because obviously these projects will last
Speaker 2: for decades, and you know in New Zealand, like the
Speaker 2: longest the longest government we've had do we tend to
Speaker 2: have these days as a nine year government. So you know,
Speaker 2: whatever whatever happens with these investments, these investors know that
Speaker 2: and then not to just in future there will be
Speaker 2: another government and they want to make sure that their
Speaker 2: investments safe under their government too.
Speaker 1: Economic growth is a key priority for the government this year.
Speaker 1: Do you think that that's resonating with voters.
Speaker 3: It's a good question. I think.
Speaker 2: I think voters would like to see economic growth because
Speaker 2: economic growth is usually a good thing. So I think
Speaker 2: because we haven't had very good economic growth for the
Speaker 2: last few years, I imagine voters are thinking, yes, police,
Speaker 2: we would like some of that.
Speaker 3: Please.
Speaker 2: You know, it means generally means higher incomes and a
Speaker 2: good of life for New Zealanders. So I think voters
Speaker 2: would like to see economic growth, whether or not heavy
Speaker 2: with the tactics and the methods of the government is
Speaker 2: using to get their economic growth, more foreign investment in particular.
Speaker 2: That's that's that remains to be seen. There's a ten
Speaker 2: Expayers Union poll out recently which actually showed that voters
Speaker 2: were pretty supportive of more tourism, international students and the like.
Speaker 2: So most of the government's policy leaders that it's looking
Speaker 2: at using are supported by by a decent number of voters.
Speaker 2: So so yeah, I suppose based on that poll voters
Speaker 2: like what they're seeing. Obviously most current polling, here's the
Speaker 2: government behind the opposition. So I suppose you know what,
Speaker 2: what does that say? Well, that says the voters is
Speaker 2: not very happy with the current government. Although whether whether
Speaker 2: that those poles will reversed out once we get economic growth.
Speaker 2: You know, typically based on what we've seen in the past,
Speaker 2: when the economy is doing well, the government the government's
Speaker 2: position and the polls improves. So maybe that's what that's
Speaker 2: what the government's hoping for, is that is that once
Speaker 2: they get the economic growth, if they get economic growth,
Speaker 2: some of that pollingly that the opposition currently enjoys will
Speaker 2: will reverse.
Speaker 3: Out way for polling.
Speaker 5: So Forny, look, I mean, we've got you know, it's
Speaker 5: a tough time for Kiwi's poles are bouncing around a lot.
Speaker 5: Our job is to focus on what New Zealanders want
Speaker 5: and that is all about us fixing the economy and
Speaker 5: making sure we get money into Kiwi's back pockets, and
Speaker 5: I can tell you don't give a lot of thought.
Speaker 5: I'm here each and every day making sure that we're
Speaker 5: actually growing the economy. That's why we're doing the infrastructure summit,
Speaker 5: That's why we're going to India. Those are the things
Speaker 5: that are actually going to power up the economy and
Speaker 5: get Kiyi's more cash in the pop us so that
Speaker 5: there's a trend of labor overtaking you. Well, I just
Speaker 5: say to you, look, I never have obsessed too much
Speaker 5: on poles, as you know when we've talked about them
Speaker 5: in the past, and it's the same position.
Speaker 3: Yeah.
Speaker 1: Well, on the subject of polls, there was a Horizon
Speaker 1: Research poll and stuff this week that found that thirty
Speaker 1: nine percent of respondents were concerned about the coalition's performance.
Speaker 1: Thirty eight percent were disappointed, compared to only ten percent
Speaker 1: who felt pleased. So does this put some pressure on
Speaker 1: the summit succeeding to really turn things around, or is
Speaker 1: this just one small part of a bigger issue for
Speaker 1: the coalition?
Speaker 2: Well, polls, that's like, it's a quite interestingly worded question.
Speaker 2: I suppose it's in the polling question. I mean, not
Speaker 2: your question that those poles sort it's quite it sounds
Speaker 2: quite similar to a right track wrong track question, which
Speaker 2: is do you feel like the countries on the right
Speaker 2: track and do you feel or on the wrong track?
Speaker 2: And so voters feel like the countries are on the
Speaker 2: wrong track, that tends to vote very bad as a
Speaker 2: leading indicator for the party vote performance. So if the
Speaker 2: voters are feeling negatively about the government, about the country
Speaker 2: and the direction it's on, that tends to show up
Speaker 2: in a few weeks or months and the party vote
Speaker 2: performance of the government. Yeah, I think what their horizon
Speaker 2: poll shows is what a number of right and wrong
Speaker 2: track tolls and economic sentiment polls are shown, which is
Speaker 2: that people are not feeling very good. People are not
Speaker 2: feeling very good about the state of the economy and
Speaker 2: the country, and therefore the government that runs the country
Speaker 2: is not performing well. Like that does for pressure, I mean,
Speaker 2: not so much on the summit, Like I don't think
Speaker 2: the government is going to succeed or failed depending on
Speaker 2: the summit, but it does put pressure on the government
Speaker 2: to sort of actually deliver something tangible to voters before
Speaker 2: the next election, just so it does have something to say,
Speaker 2: you know, to vote as well that we're making the
Speaker 2: country better because because of the exposed and I suppose
Speaker 2: whether summit might be successful and achieving their aim as
Speaker 2: if the summit's able to court investment from someone and
Speaker 2: because of that investment and infrastructure project is accelerated. The
Speaker 2: ex party has this idea of accelerating infrastructure investment by
Speaker 2: simply allowing more or less say well, look, if you
Speaker 2: want to if there's any infrastructure project out there that
Speaker 2: you think you can build and with no assistance from
Speaker 2: the government, then you know, we would like to hear
Speaker 2: from you. And if you can do it without us
Speaker 2: putting up any money, then there's a chance you'll be.
Speaker 3: Able to do it.
Speaker 2: And then they look at that as a way of
Speaker 2: accelerating investment, you know, or even when you look at
Speaker 2: the roads that we want to build over the next
Speaker 2: of thirty thirty years, we have a long pipeline of roads.
Speaker 2: If a private investor comes and says, look, you know
Speaker 2: that road that you want to build in fifteen years time,
Speaker 2: I could do that as a PvP if you let
Speaker 2: me start tomorrow, And that sort of works that way
Speaker 2: where private investors look at the slate and if they
Speaker 2: like something or else they can bring it forward, maybe
Speaker 2: very downstream of this summit. You see stuff like that,
Speaker 2: and the government would would then be able to go
Speaker 2: to verses and say, look, as a result of our
Speaker 2: investment changes, result of us courting this capital, we've actually
Speaker 2: started to close the infrastructure deficite thanks to private capital.
Speaker 2: You know, I'm not sure you'll see a massive changes
Speaker 2: before the election though, because these things, particularly in the
Speaker 2: infrastructure world, things move pretty slow, So I wouldn't be
Speaker 2: getting ahead of myself.
Speaker 1: Yeah, Like, are you expecting it to go well or yeah?
Speaker 1: Is it just too short term thinking to think in
Speaker 1: terms of success or failure about this?
Speaker 2: I think if we see some projects Anington in the
Speaker 2: short term, then I think it will be a success.
Speaker 2: But I yeah, I don't. I wouldn't be expecting something
Speaker 2: too tangible from it.
Speaker 3: Thanks for joining us, Thomas no Wiries. Thank you.
Speaker 1: That's it for this episode of The Front Page. You
Speaker 1: can read more about today's stories and extensive news coverage
Speaker 1: at zidherld dot co dot nzen. The Front Page is
Speaker 1: produced by Ethan Sills. I'm Richard Martin. Subscribe to the
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Speaker 1: and tune in tomorrow for another look behind the headlines.