Integrity Briefing: Labour’s Future Fund – Visionary investment or corporate welfare?

Oct 20, 2025

Labour’s newly unveiled “Future Fund” is being sold as a bold economic vision for New Zealand – a sovereign-style investment vehicle to boost infrastructure and innovative businesses. But a closer look suggests this policy may be more about political optics and corporate welfare than genuine economic transformation.

The $200 million fund (the initial Crown investment) is modest in scale and shrouded in vague detail, raising eyebrows across the political spectrum. This column critically examines the Future Fund’s substance, motivations, and beneficiaries. Is it a promising strategy for national growth, or merely public money rerouted to private interests under a lofty brand name? The evidence so far points to the latter.

A Corporate welfare plan in disguise

Critics argue that the Future Fund essentially amounts to “corporate welfare”, i.e. using taxpayer money to subsidise private businesses rather than funding public services. Even the Fund’s proponents acknowledge that the fund will take on riskier investments in Kiwi companies, with no guarantee of returns to match the cost of public capital.

As Jenée Tibshraeny has written in the NZ Herald today, Labour will be criticised “for engaging in corporate welfare – using money that could be spent on health, education and infrastructure to invest in businesses that align with its worldview”. Indeed, there is “rightly… debate over whether this is really the best way to grow the economy”.

The Government is effectively proposing to pick winners by investing public funds in selected firms. Such moves risk socialising losses and privatising gains: if investments fail, the public bears the cost; if they succeed, much of the profit accrues to private shareholders.

This corporatist approach, in where the state partners with big business using public resources has a chequered history in New Zealand. Past initiatives like the Provincial Growth Fund poured billions into regions and companies with mixed results, and opponents are already likening Labour’s Future Fund to a smaller repeat experiment. In short, many see the Future Fund not as a visionary public investment, but “a bid to claw back some credibility”, as stated by RNZ’s Craig McCulloch. Other just critics see it as a form of business handout.

Vested interests applaud – Who really benefits?

One telling sign of the policy’s true bent is who applauded it loudest: Infrastructure New Zealand, the lobby group for major construction and infrastructure corporations. Infrastructure NZ “welcomed” Labour’s proposal as “a positive step towards long-term infrastructure planning”, praising the idea of an investment vehicle that could “unlock large-scale, intergenerational infrastructure projects”.

It’s not hard to see why big infrastructure firms are enthused. They stand to gain enormously if public funds are funnelled into new projects that those firms will build, consult on, or finance. (Infrastructure NZ represents over 150 organizations, including construction contractors, engineering consultants, financiers and government agencies.)

The endorsement from such vested interests should give the public pause. Of course industry players support a scheme that might line their pockets with state-backed investments. The chief executive of Infrastructure NZ, Nick Leggett, even talked up the fund’s potential to attract private co-investment and deliver projects faster.

Yet in the same breath, he hinted at the industry group’s broader wish-list: calling for clarity on how the fund might work “alongside other forms of funding and financing” and stressing that tools like public-private partnerships (PPPs), “asset recycling” (a euphemism for selling or leasing public assets), and overseas capital still “have a big role to play”. In essence, the infrastructure lobby is delighted with Labour’s plan because it aligns with their interests: more public money in infrastructure, with possible openings for private profit through PPPs and asset recycling. This raises concerns that the Future Fund could become a vehicle for corporatist deal-making, where public assets and cash are leveraged to benefit a small elite under the guise of nation-building.

Big idea, little detail – A “Puny” proposal

If the Future Fund is supposed to be a game-changer, the Labour Party has provided precious little evidence for how it will work. The announcement came with scant detail and no transparency about which state assets would be involved or what return on investment the public can expect.

As RNZ political editor Craig McCulloch observed, the policy’s “distinct lack of detail has left Labour somewhat exposed, evoking echoes of other ambitious projects that fizzled, like KiwiBuild or the Green Investment Fund”. The plan was unveiled in an 11-page brochure heavy on slogans and light on specifics. There were no costings, no list of assets, just a promise that more will be revealed after the election. McCulloch notes that the documents came with “no figures and no list of assets” and that without such information it’s “impossible to judge the true scale – or credibility – of the proposal”.

In The Post, Henry Cooke was even more blunt, writing that Labour “released a policy… with a stupendous amount of unspecificity”. He highlights that the Future Fund has an “unspecified mandate” funded by an unspecified pool of Crown assets at a very unspecified scale – “it could be not more than a few hundred million… it could be $10 billion”. In other words, even the basic scope of the fund is anyone’s guess.

What we do know is underwhelming. Labour will seed the fund with $200 million. This is money, Jenée Tibshraeny points out, it “would likely need to borrow” – and divert some yet-to-be-determined SOE dividends into it, rather than into the general budget.

To put the scale in perspective, $200m is a drop in the bucket of New Zealand’s economy. BusinessDesk editor Pattrick Smellie calculates today that even if you pooled the annual dividends from the four largest state-controlled companies (power utilities Genesis, Mercury, Meridian, plus Air New Zealand), it’d total only about $500m a year for the fund, which is “not a sum that’s going to shift the dial much on the country’s multi-hundred billion dollar public infrastructure deficit”.

Smellie’s verdict on the policy as announced: “short on detail, and on the face of it, hardly ambitious”. The sentiment may be laudable, as who wouldn’t want strategic, long-term investment free from short-term politics? But Smellie concludes “its potential for impact looks, frankly, puny”.

Across both sympathetic and hostile media, from The Standard to Kiwiblog, the consensus is that Labour’s proposal lacks scale or clarity. Even commentators on opposite ends of the political spectrum describe the policy as small in ambition and vague in design, a rare moment of agreement about its shortcomings.

There are also serious questions of fiscal trade-offs. By siphoning off hundreds of millions in Crown asset dividends to this fund, the government forgoes that revenue for other uses. Those funds would no longer be available to pay for healthcare, education or debt reduction in the annual budget. Smellie says: “The dividends directed to the fund’s activities would also be funds not available to the Crown to bank against its annual Budget calculations”, meaning the rest of the Budget would be “just that little bit tighter”.

In essence, it’s a shell game: money shuffled from one pot to another, creating the illusion of a new investment boost while potentially squeezing other public spending or forcing more borrowing. Yet Labour hasn’t been upfront about this reality. When pressed, finance spokesperson Barbara Edmonds refused to say whether the fund is expected even to cover its own cost of capital, offering only that it should “keep growing on its own steam”. Such ambiguity leaves open the possibility that the Future Fund could deliver sub-par returns (or even losses) effectively subsidising private ventures at taxpayers’ expense.

Henry Cooke notes that the entire initiative risks making Labour look “unserious.” He reports that the glossy policy document contains “one page of policy detail, one page of self-criticism, and one page that is just a photo of Chris Hipkins,” and quips that “if you want construction firms or other big movers in the economy to plan for your big changes, you will need to give them some actual detail”.

Political optics: Positioning against asset sales

Why would a party roll out such a sketchy policy? The answer lies in politics as much as economics. Labour’s Future Fund appears engineered to draw stark contrast with the National Party on the emotive issue of state asset ownership. By linking the new fund to state-owned enterprises (SOEs) and pledging to reinvest their dividends rather than sell them, Labour is implicitly campaigning on “no asset sales.”

As Jenée Tibshraeny has observed, Labour’s first economic policy “is more about giving it a platform to campaign against asset sales than grow the country’s wealth”. She notes that by involving SOEs, Labour “would commit to not selling these entities. This is the key point. Labour wants to emphasise its commitment to keeping and growing SOEs – in contrast to National”.

In truth, Tibshraeny says there was “no real need” to tie the Future Fund to state assets at all, as governments can invest in or lend to businesses without that linkage (as recent administrations did through the Provincial Growth Fund, small business loans, and other programmes). The sole reason for the SOE angle is political: to stake out an anti-privatisation stance and paint National (and Act) as eager to hock off public assets to the highest bidder.

It’s a smart calculation that asset sales will be a potent election issue, one where Labour can get an edge. New Zealanders have historically been lukewarm or hostile to selling state assets, and Labour is clearly itching to revive this debate. Tibshraeny writes that, “Labour will be hoping phrases like ‘the Guardians of the Super Fund investing in New Zealand’ and ‘Labour keeping Kiwis in New Zealand’ will resonate with its support base. More importantly, it hopes to set the stage for a debate on asset sales – something New Zealanders typically oppose”. We can expect to hear a lot from Labour about how the Future Fund proves you can leverage state assets for national gain without selling them, while National will be cast as revenant Rogernomes planning a garage sale of the family silver.

In fact, Newsroom’s Marc Daalder notes today that the Future Fund is explicitly framed as a “useful platform to attack asset sales”, a pre-emptive rejoinder to National’s likely campaign to privatise or “asset recycle” parts of the state. The fund allows Labour to argue that government should keep assets like KiwiRail or Landcorp “because those assets can be leveraged to boost the domestic economy”. It shifts the narrative: instead of asking why the government owns a farming company or an airline, Labour wants the public to ask why one would ever sell an income-generating asset when you can borrow against it to invest in NZ’s future.

Whether this argument holds water economically is dubious. After all, borrowing against assets or redirecting their profits isn’t magic money, as discussed. But politically, the optics are deliberate. RNZ’s McCulloch says: “Labour’s new Future Fund proposal is as much about optics as economics – a bid to claw back some credibility and to seize control of the looming tax debate”.

With National likely campaigning on fiscal responsibility and possibly reprising its traditional stance of asset sales or partial privatisations, Labour wants to draw a clear line in the sand. The Future Fund gives them a talking point to say: We have a plan to grow the pie without selling assets; National just wants quick cash from selling off our future. It’s a classic election-year gambit, wrapping economic nationalism in a shiny new package.

Courting and cosying up to NZ First

There’s another political creature lurking in the Future Fund: Winston Peters. The policy bears an uncanny resemblance to ideas long promoted by Peters and his party New Zealand First. That’s surely no accident. Peters has been touting a massive $100 billion “New Zealand Fund” (essentially a giant state investment fund) since late 2024. Labour’s Future Fund is a pale imitation, but clearly congenial to NZ First’s worldview.

Pattrick Smellie points out that the idea “chimes happily enough with NZ First’s desire also to create a national investment fund”. In an election where NZ First might hold the balance of power, “policies that make Labour and NZ First appear capable of working together should be noted when they appear”. In other words, Labour’s fund could be read as an olive branch to Peters. It’s a signal that we’re on the same page, we too believe in an interventionist, sovereign-wealth approach.

Unsurprisingly, Winston Peters has claimed credit (and some indignation) for the Future Fund concept. He blasted Labour’s plan as a knock-off of his own, calling it a cheap “Temu mail-order rip-off” of NZ First’s big investment fund policy.

Labour leader Chris Hipkins, somewhat unconvincingly, said he was not aware of Peters’ policy, but the overlap is hard to ignore. It’s clear the flavour of the announcement leant heavily on Peters’ brand of economic nationalism. This could be an effort to woo NZ First-leaning voters or even to pave the way for post-election negotiations. By showing openness to NZ First’s ideas (minus the extra zeros), Labour might hope to soften Peters’ stance or undercut his appeal. At a time when Labour’s ally Te Pāti Māori appears toxic and unstable, this is a very clever repositioning.

The Dangers of corporatist thinking

Beyond the immediate electioneering, the Future Fund highlights a deeper problem in New Zealand’s economic policymaking: a drift toward corporatist, ad-hoc solutions instead of coherent strategy. Rather than tackling root issues, like boosting productivity, encouraging genuine private-sector innovation, or directly funding critical infrastructure through the Budget, Labour is reaching for a gimmicky fund that attempts to do a bit of everything at once.

It’s a classic case of “politics by announcement”: create a shiny new entity with a hopeful name, seed it with a token sum, and declare the problem addressed. In reality, such funds often become inefficient slush pools, subject to political influence and benefiting a narrow set of insiders. The Future Fund’s mandate (as far as one can discern it) is so broad – investing in “infrastructure” and “innovative businesses” and anything that creates jobs or “serves the public good” – that it risks trying to be all things to all people. With such a thin capital base, it cannot possibly fulfill all those lofty goals. Will it prioritise roads and bridges, or biotech start-ups, or green energy projects? No one seems to know yet, including Labour’s policy designers

This lack of focus is dangerous. A fund that must please both infrastructure barons and tech entrepreneurs might end up satisfying neither, or making scattershot investments with little overall impact. Meanwhile, truly pressing needs like public hospitals, schools, or public transport might lose out on funding as money is diverted into the Future Fund’s ventures.

There’s also the risk of political patronage: even with professional Guardians (from the Super Fund) managing it, the government of the day will set broad objectives. As history shows, governments can find ways to nudge even “independent” funds toward pet projects. The Provincial Growth Fund under NZ First was widely criticized for pork-barrel spending in regions that suited its political interests. Could the Future Fund become a similar honey pot? The scant oversight and detail so far do not inspire confidence.

Furthermore, injecting government as an investor in businesses raises questions about fairness and market distortion. Companies with the right political connections or ideological alignment might get capital they wouldn’t have from private investors, while others miss out. It’s a recipe for crony capitalism.

At a time when the economy is struggling, New Zealand deserves robust, well-thought-out economic leadership, not half-baked experiments. The corporatist impulse behind the Future Fund reflects a failure to articulate a clear economic direction. It smacks of desperation: an attempt to appease the business community (who have been losing faith in Labour) by dangling some money in front of them, and to appease voters by saying “look, we have a plan for growth” – all while avoiding unpopular choices like significant tax reform or spending reallocation.

But poor strategy and blurred accountability are a toxic mix. If the goal is infrastructure development, then plan and fund infrastructure directly with transparency. If the goal is fostering innovation, then address why private capital isn’t already doing so, is it skills, R&D incentives, regulatory barriers? Creating a mysterious fund sidesteps these hard questions.

Conclusions

Labour’s Future Fund may be wrapped in future-focused rhetoric, but so far it looks like a triumph of style over substance. The policy’s grandiose promises of investing in “our future, by us, for us” ring hollow against its paltry scale and vague mechanics. It appears driven less by sound economics than by electoral calculations and the influence of vested interests who see dollar signs in a new government pot of money. In the final analysis, the Future Fund risks being neither truly transformative nor fiscally prudent. Instead, it could divert public resources into politically convenient, but economically dubious, projects, all while allowing the Government to claim it’s doing something bold.

New Zealanders should be wary of politicians bearing Future Funds. Without significantly more detail, transparency, and evidence of public benefit, this proposal remains a flimsy scaffold of an economic plan. It is one that, has Labour in trouble the moment you examine it closely.

If Labour is serious about addressing the country’s economic malaise, it will need to come up with far better than a corporate welfare slush fund dressed up as visionary policy. For now, the Future Fund looks like a small bet touted as a big idea, and the stakes are our public dollars. The country deserves more honesty and substance in economic policymaking than this. As Pattrick Smellie rightly concludes, Labour will have to “do a whole lot better than this” if it wants to prove it can grow the economy without simply subsidising business elites.

Dr Bryce Edwards

Director of The Integrity Institute

From the NZ Lobbying and Influence Register: