No Cullen Fund restart until surplus, says Shearer - but did he tell his MPs?

Labour leader David Shearer has recommitted his party to a capital gains tax but says it will emulate National and delay restarting payments into the Superannuation Fund.

It is not clear, though, whether he told his caucus of the NZ Super Fund move.

Mr Shearer told a Wellington business audience this morning that New Zealand exporters cannot access enough capital to expand because there is not a capital gains tax.

Labour’s policy is for a CGT on all businesses – including, presumably, exporters – and on all other investments except the family home.

Family homes which also run a home business – for export or not – would, however, have that part of the home included in a CGT.

Mr Shearer says his party’s first priority for growing the economy is tax.

"The first is creating pro-growth tax reform. That includes a capital gains tax that will encourage people to invest in productive parts of our economy rather than speculation.

“At the moment, the Government is starving our productive exporters of the investment capital they need.

"New Zealanders are borrowing heavily overseas because we don’t export enough to pay for our imports and interest.”

That is in line with previous speeches.

The only new move was a promise not to restart repayments into the New Zealand Superannuation Fund – known as the Cullen Fund – until the government’s books are back in surplus.

This is National’s position, and Labour has, until today, strongly opposed this.

Indeed, Labour hatchet man Trevor Mallard was, only three days ago, criticising National’s policy on this in the House.

In a debate on Tuesday on a tax bill – held after that day's caucus meeting, during which it would be expected Mr Shearer would have mentioned the policy change – Mr Mallard said National’s policy in this and other savings policy areas is shortsighted.

“One of the things that we need to consider is whether, rather than giving preference to offshore lenders, we should, in fact, focus on building up our own domestic capital and domestic borrowing in order to retain the financing of our businesses onshore as much as possible and thereby reduce the flow offshore.

“That, of course, would require more ambition around savings than we currently have," he said.

"I note that it has been the policy of the government to not put money into the Cullen Fund.

"I note that it has been the decision of the government to run down KiwiSaver, to reduce the incentives and to reduce the flow of payments into the system.

"And that, of course, is something that works against the development of capital in New Zealand. I think that has been a short-term approach,” Mr Mallard said.

This morning Mr Shearer said the previous committment to restart Super Fund repayments was not popular with voters.

"New Zealanders told us they were uncomfortable about the rate of borrowing... They saw this as borrowing to invest and they didn't like that.

"We have listened.

"That’s why I won’t continue with Labour’s previous policy to restore contributions to the Cullen Super Fund until I think we can afford it.

"It wouldn’t have increased net debt because it gave us an asset that matched the liability.

"However, New Zealanders saw this as borrowing to invest and they didn’t like that," Mr Shearer said.

"We’ve decided that until we are back in surplus, any new spending will have to be paid for out of existing budget provisions, new revenue, or by re-prioritising."