Peters: Think like Singapore, Ireland
Deputy PM says other nations can offer lessons on economic growth
Winston Peters reckons it’s time to take lessons out of the playbook of other small advanced nations like Singapore and Ireland to get the New Zealand economy on a stronger growth path. He cites Ireland, which changed its economic policies and became the Celtic Tiger. And he has his eye on Singapore and Taiwan too.
Peters won’t go into specifics — he doesn’t want to step on the toes of Finance Minister Nicola Willis.
But he obviously has a personal affinity for strategies other small advanced nations have deployed, including offering preferential tax rates at both personal and company levels and other incentives to attract global talent and foreign firms to work and invest in their countries.
Says Peters: “The only time you hear ‘we can’t pick winners’ is when you’re talking about taxation policy. In sport and in everything else I know, it happens.
“Singapore does it. I’ve seen China do it. Other small countries like Ireland do it.”
He underlines how Ireland forged a cross-party consensus before tilting its tax system. “That’s what we’ve got missing here.”
NZ’s current level of foreign direct investment is underwhelming.
OECD (Organisation of Economic Co-operation and Development) chief economist Clare Lombardelli this week openly criticised NZ’s restrictive foreign investment regime. But having a more open regime may not be enough.
Peters says a common question he gets out on the road is: “What will you give to advance NZ’s interests?”
It’s a debate that needs to be had in this more protectionist world where other countries are taking a transactional approach overlaid with a security lens and there is competition for capital.
The Deputy Prime Minister has clearly studied Singapore’s development. Singapore’s Government uses a global investment company called Temasek to invest at arm’s length.
A similar model here would see all the Government’s holdings in publicly listed companies transferred to a new Government-owned fund which could then manage the portfolio.
This would enable capital to be recycled — if assets are divested — and reinvested in new companies.
Importantly, it would remove the politicians from using their clout to appoint mates as directors of individual companies and from mounting parliamentary inquisitions if they don’t like decisions.
Asked if New Zealand should also look at instituting Singapore’s model, Peters says a lot of time was spent trying to get Labour involved with the Treasury on this issue in a previous Government.
“It works. I’m seeing a whole lot of countries who are thinking that way.”
Giving and Getting
The Government has set an ambitious target to double the value of exports in 10 years by pursuing quality trade agreements, conducting a record number of trade missions to open doors for NZ exporters and making India a strategic priority for increased trade and investment.
NZ’s quest for a free trade deal (FTA) with India is instructive.
Peters says Kiwi negotiators went in with the idea that NZ may not get to have free trade, “but what we can do is mark up as fast as we can between 10 and 15 real, itemised targets for trade changes and business opportunities and go for it”.
Food security is an issue for India’s fast-growing population.
He says some apparently obvious obstructions are not actually obstructions.
“The animal industry of India will need NZ’s help and needs it now,” he says. “They’re getting ready for a future that they can’t yet handle.
“Our job is to get into their minds how we can help them without being an opponent.”
Peters suggests everyone defaults to the proposed FTA and Indian farmers’ opposition to opening the door to NZ dairy. “Once they get it for themselves what’s in it for them — which is about personal relationships, the sooner the better.”
India does have other asks — but they are too sensitive to get into publicly at this stage.
The Government’s approach is to target incremental gains across a lot of places.
“Multilateralism is not necessarily on the decline but it’s not the flavour of the month,” says Peters. “So, we’ve got to deal with that reality.
“There’ll still be multilateral agreements — but they’ll be hard to come by in a world which, as we’ve said in the speeches, has changed.
“The strategy is elegantly simple: Incremental gains across a lot of places add up. Years [of ] pursuing quality trade agreements, conducting a record number of trade missions to open doors for NZ exporters and making India a strategic priority for increased trade and investment.”
Peters is open. NZ may not get a free trade deal with some countries. But he can do a backup job for his colleague Trade Minister Todd McClay (“he’s everywhere as well”) and “look at every opportunity we can possibly find and get back to him or get back to the Prime Minister or other ministers on it”.
An example of this was Peters recently swinging by Washington DC to meet with United States Secretary of State Anthony Blinken.
The two players emerged with a joint statement saying NZ and the US “see powerful reasons for NZ engaging practically” with Aukus and the Quad, a strategic group of the US, Australia, India and Japan formed in response to China’s rise.
But he also took the opportunity to raise directly some regulatory issues facing Peter Beck’s Rocket Lab in the United States.
He recently hosted Latin American heads of mission at his Bolton St ministerial house.
The message from that night? “Just how open the door is and they just want NZ to follow through.”
Chewing the fat
Away from “the tiles” where cameras frequently record him jousting with Parliament’s press gallery, Peters presents as relaxed and considered and prepared to talk freely (some of it off record so as not to step on ministerial colleagues’ toes) about the coalition’s strategy to double exports by value within a decade.
Peters is not to be underestimated. He is on first-name terms with powerful Chinese Foreign Affairs Minister Wang Yi, America’s Anthony Blinken and a coterie of foreign ministers from multiple countries, ranging from Germany’s Annalena Baerbock, who he hosted in Auckland last weekend, to those from smaller Pacific nations.
Peters is “known”. In part, that is the legacy of being NZ’s Foreign Minister for the third time with wellestablished personal linkages that enable him to quickly get cut through.
Peters knows more than most that sustaining personal relationships at the diplomatic level matters at a time when there’s obviously a great deal of geo-political sensitivity and conflict.
He’s already had meetings with countless diplomats. In the first three months of this Government he met those who represent 87 per cent of our trade.
“We’ve got a long way to go yet, we are going to five countries next week.”
We met just days ahead of his offshore political delegation which includes Labour’s David Parker, heading off to visit the Solomon Islands, Papua New Guinea, Vanuatu, New Caledonia, and Tuvalu.
It’s a punishing schedule, on top of previous punishing schedules.
Peters is well-connected in the Pacific. He was instrumental in persuading the Trump Administration to “reset” its own Pacific policy, making the point (my words) that it could hardly criticise China for muscling in when it was not really at the table itself.
As has been noted elsewhere, his Ma¯ori whakapapa certainly helps, as does his age and gender.
Resourcing up?
A key question is whether the coalition’s first Budget will underwrite the necessary offshore resources to underpin the targeted doubling of exports by value.
A benchmarking project has been set up at the Ministry of Foreign Affairs and Trade (Mfat) which looks at countries with a similar GDP — or similar populations — to ours to assess relative resourcing levels.
Peters has been struck by what a 3.5 million-strong Croatia has achieved from where it was in 1990 — to now be a member of the European Union and strategic military alliance Nato.
There is a perception NZ is undercooked by some 35 per cent offshore.
Peters also wants NZ to step up its pursuit of international sporting events and to keep them here, citing the loss of the Rugby Sevens, America’s Cup and Sail GP among others.
“We spent all the money on the America’s Cup and it’s in Barcelona.
“What’s wrong with us? Can you imagine Ireland letting that happen? Singapore? No.”
One of the perceptions from the Prime Minister’s trip to Southeast Asia was NZ is not actually that brilliant at hosting and business matching.
“You’re reading from our textbook here,” laughs Peters.
“You’re going to see a change starting with visiting dignitaries. It’s not a matter of elitism, snobby, hierarchy or personalities. Not matching nearly enough what most of the world is doing has a bad look.
“I can’t announce what the conclusion is, but you will see a dramatic change.”
He was pleased to host Germany’s Baerbock in superb settings when she visited last weekend.
“But some of the settings — I’ve sat there and thought ‘this is disgusting’.”
Peters is open that there will be slightly more cost — “But you’d actually feel proud that you’re actually stepping up”.
“The Prime Minister came off the plane and said ‘we’re gonna do this’.”