For generations, New Zealand has struggled with weak productivity growth, dependence on overseas capital and the challenge of funding the infrastructure and industries needed for lasting prosperity. New Zealand First's latest policy proposes a different economic pathway: discover the nation's resource potential, capture substantial public revenue from its development, and turn that income into enduring national wealth capable of helping build New Zealand's future.
Report by eLocal
What if New Zealand's most important economic debate is not about which government can redistribute existing tax revenue, but about how the country can create new wealth, retain ownership of that wealth, and reinvest it in its own productive future?
That is the much larger proposition behind Winston Peters' newly announced New Zealand First policy, Future Proofing our Fuel Security.
The policy begins with a proposed $1 billion National Subsurface Development Survey, designed to establish what oil, natural gas, geothermal and underground carbon-storage resources New Zealand may possess. But the ambition goes substantially further. New Zealand First proposes developing commercially viable resources, capturing significant public revenue through royalties, establishing a Norwegian-model sovereign wealth fund and investing in regional industry.
This is not simply an argument about drilling for oil. It raises a fundamental question about New Zealand's economic structure: whether the country should continue relying predominantly on taxation, borrowing and private investment to finance its development, or deliberately build a larger pool of national capital from the economic value of its own natural resources.
Will this in fact make New Zealand stronger? The opportunity is to establish a wealth-building system in which New Zealand's resources help finance New Zealand's infrastructure, industries, technology, energy security and future prosperity.
The distinction is between generating economic activity and ensuring that the country retains a meaningful share of the wealth that activity creates.
New Zealand's Long-Running Productivity Problem
New Zealand's productivity performance has been a persistent economic concern for successive governments.
The Treasury identifies productivity as the most important long-term determinant of wages and living standards. Yet its research shows that average whole-economy labour productivity growth slowed from approximately 1.4% annually between 1993 and 2013 to just 0.2% annually over the subsequent decade examined in its research.
That is not literally zero growth, nor does it mean productivity has been unchanged for 50 years. It does demonstrate how severely New Zealand's productivity growth has weakened.
For households, the consequences are familiar. When an economy struggles to produce more value for each hour worked, sustainable wage increases become harder to achieve. Governments face greater difficulty funding expanding public services without increasing taxation or borrowing, while businesses struggle to justify investment in higher-value production.
New Zealand's economic challenges cannot be solved by shifting existing money between government departments alone.
The country needs greater productive capacity, more investment, stronger infrastructure, better technology and more income-producing assets.
That is where the resource-development and sovereign wealth proposition becomes economically significant.
A sovereign wealth fund could give New Zealand an additional source of investment capital and public financial returns, while carefully designed domestic investment programmes could help expand the nation's productive capacity.
The two objectives are connected, but they require deliberate policy design.
The Difference Between Producing Wealth and Owning It
New Zealand has substantial productive resources, including agricultural land, fisheries, forests, mineral deposits, renewable energy potential and prospective petroleum basins.
But there is a difference between resources being located in New Zealand and the resulting profits remaining in New Zealand.
When a foreign-owned enterprise operates domestically, it can create employment, pay taxes, purchase local services and contribute to national production. Those are real economic benefits. However, part of its profits may also flow overseas to shareholders.
The question is not whether overseas investment should be excluded. International capital, expertise and technology can be essential to developing major resource projects.
The question is how New Zealand negotiates its share of the value created.
If the public receives relatively little enduring financial benefit from the extraction of a finite resource, the country may surrender a valuable economic opportunity.
If, instead, the state establishes an effective framework of resource royalties, taxation, public ownership interests and long-term investment, the resource can become a source of national capital.
That is the principle New Zealand First is seeking to apply.
Under the party's proposal, commercial explorers would carry much of the initial risk of proving fields, while the government would establish terms designed to deliver substantial public returns as production matures.
New Zealand First proposes royalties eventually exceeding 50%, although the published announcement does not yet specify the precise royalty base, timing or treatment of project costs.
Those details matter. The objective would be to secure a meaningful public share while maintaining sufficient commercial incentive for exploration and development.
The larger economic prize would be what happens to that public revenue after it is collected.
Norway: The Difference a National Wealth Strategy Can Make
Norway offers a powerful example of what can happen when a country treats natural-resource income as a national asset rather than merely another source of annual government revenue.
Its Government Pension Fund Global was established in 1990 to manage petroleum wealth for current and future generations. The first capital transfer followed in 1996.
By the end of 2025, the fund was worth approximately NOK 21.3 trillion, equivalent to around NOK 3.8 million for every Norwegian resident.
That figure represents collectively owned national financial wealth, not individual bank balances.
The fund invests internationally in shares, bonds, property and other approved assets. Norway's fiscal framework allows petroleum wealth to support public expenditure over time while seeking to preserve the fund's underlying capital for future generations.
The results demonstrate an important economic principle.
An exhaustible resource can be converted into financial assets that continue generating returns long after the original resource has been extracted.
Norway did not become wealthy merely because oil existed beneath its continental shelf. The country established institutions, tax arrangements, ownership structures and investment rules that captured and preserved a substantial share of the resulting value.
Its petroleum industry also helped develop engineering, marine technology, industrial services and specialist expertise.
The lesson for New Zealand is therefore broader than petroleum production.
It is about deliberate national wealth creation, public ownership of financial assets, and the institutional discipline needed to preserve that wealth.
New Zealand First's policy raises the possibility of applying that principle to resources beneath New Zealand's own territory.
The National Wealth-Building Cycle
The economic framework can be understood as a connected series of decisions.
First, New Zealand identifies and assesses its natural resources. Second, commercially viable projects are developed under arrangements that capture public revenue. Third, a portion of that revenue is accumulated as sovereign capital. Fourth, investment returns and appropriately structured development funding support productive national assets. Finally, stronger industries, infrastructure and productivity help generate further economic value.
The essential point is that resource income should not simply disappear into annual expenditure without leaving enduring assets behind.
A national wealth strategy would seek to turn finite underground resources into lasting economic capacity above ground.
[Insert infographic: From Natural Resources to National Prosperity]
The $1 Billion Survey: Establishing What New Zealand Actually Has
New Zealand First proposes an initial $1 billion investment over a term of government in a National Subsurface Development Survey.
The survey would create a coordinated dataset covering prospective petroleum resources, geothermal opportunities and potential underground carbon-storage locations.
The party argues that New Zealand's offshore basins remain insufficiently explored and that existing seismic information is inadequate to assess their full potential.
It identifies ten prospective basins and highlights the Great South Basin, where relatively limited historical drilling has taken place.
The immediate value of such a survey would be better information.
Without reliable geological data, neither government nor private investors can properly evaluate the scale, location, commercial viability or development risks of potential resources.
A modern survey could reduce uncertainty, identify promising areas and allow commercial exploration decisions to be made on a stronger evidential foundation.
New Zealand First says it expects initial results within 12 months, priority basin surveying within 24 months, and a potential pathway towards energy production and exports within approximately six years.
These are proposed milestones rather than established development outcomes.
The party also claims that the probability of a major commercial discovery exceeds 90% and that New Zealand could possess petroleum resources comparable to Norway's.
Those are substantial claims. The published announcement does not include the independent geological analysis required to verify them.
The survey would therefore serve a critical purpose: establishing whether the opportunity is as large as the party believes.
Energy Security Is Part of Economic Sovereignty
New Zealand's fuel-security vulnerabilities have become more apparent since the closure of the Marsden Point refinery in 2022.
The country now depends on imported refined petrol, diesel and aviation fuel, leaving essential industries exposed to international supply disruptions, shipping constraints and geopolitical developments.
Agriculture, road freight, aviation, construction, emergency services and food distribution all depend on reliable energy supplies.
New Zealand First argues that developing domestic oil and natural gas resources could reduce that exposure, support domestic industry and create export opportunities.
The distinction between crude oil and refined fuel is important. Domestic crude production would not, by itself, guarantee petrol or diesel security without suitable refining or processing arrangements.
Nevertheless, the broader objective of reducing energy vulnerability has direct implications for national resilience.
Energy security also influences productivity. Businesses are less able to invest, expand and compete internationally when energy supply is uncertain or its cost is persistently high.
Reliable, competitively priced energy can support manufacturing, food processing, transport and other productive industries.
The resource proposal therefore connects energy policy with economic development rather than treating fuel security as an isolated issue.
Building New Zealand, Not Merely Building a Fund
The most consequential question is how New Zealand would use the public wealth generated by commercially successful resource development.
A sovereign wealth fund should not be confused with a government account from which politicians can withdraw money whenever they wish.
Its purpose would be to preserve capital, earn investment returns and create a lasting financial asset for the nation.
But the wider national development objective must also be considered.
New Zealand requires long-term investment in transport infrastructure, energy systems, water networks, advanced manufacturing, science, technology, regional industry and workforce capability.
These are the foundations of higher productivity.
A national wealth strategy could combine a protected long-term investment fund with a separately governed domestic development programme, supported by defined revenue allocations or sustainable investment returns.
That would require explicit rules to prevent the depletion of capital, politically directed lending and the funding of projects that cannot demonstrate economic value.
Norway's main sovereign wealth fund is largely invested outside Norway. That helps diversify national wealth and limits pressure on the domestic economy. New Zealand would need to decide how much emphasis to place on international financial investment and how to finance domestic development without undermining the fund's long-term purpose.
New Zealand already has experience in sovereign investment management through the NZ Super Fund.
The challenge would not be inventing the concept of public investment. It would be establishing a durable resource-revenue framework that adds to the nation's financial assets and supports productive development.
The intended outcome is straightforward: stronger infrastructure, more competitive businesses, higher-value employment and a growing pool of national capital.
Regional Industry and the Opportunity to Retain More Value
Major resource developments can generate more than royalties.
They can create demand for engineering, marine services, logistics, construction, environmental monitoring, scientific research, specialised equipment and skilled workers.
Where domestic firms can supply these services competitively, more of the economic value remains in New Zealand.
This matters particularly for regional economies seeking investment beyond housing construction, retail and traditional primary production.
New Zealand First has separately proposed returning 50% of mining royalties to the regions from which they originate, alongside greater investment in geological information, science and mining skills.
That proposal concerns mining royalties and should not automatically be assumed to apply to the petroleum revenue arrangements in the newly announced fuel-security policy.
Nevertheless, it illustrates the party's stated interest in linking resource development with regional economic activity.
For New Zealand, the broader opportunity would be to move beyond simply extracting and exporting raw materials.
Higher-value processing, specialist engineering, technology development and local supply chains can help ensure that resource projects contribute to lasting productive capability.
The measure of success should not be the volume of resources extracted alone.
It should be how much durable economic value remains in New Zealand.
The Financial and Environmental Tests
A national wealth strategy must be built on commercial and environmental realities.
Deepwater exploration can be expensive, and geological prospects do not necessarily become profitable producing fields. Resource prices fluctuate, development projects require substantial capital, and international energy demand may change over the lifetime of a project.
There are also environmental obligations involving marine ecosystems, emissions, accident prevention and the eventual decommissioning of infrastructure.
Any development framework would need to ensure that operators meet those costs rather than leaving taxpayers responsible for liabilities after production ends.
The financial test is equally important.
A $1 billion public survey should be subject to transparent procurement, staged investment decisions and independent assessment of its results.
Any sovereign wealth arrangement would need clear legislation governing public ownership, investment objectives, deposits, withdrawals, reporting and accountability.
The public should be able to see what revenue has been received, how it has been invested, what returns have been earned and what economic benefits have resulted.
These safeguards are not separate from the wealth-building objective.
They are what would make that objective credible and sustainable.
A Larger Economic Question for the 2026 Election
New Zealand's long-running productivity problem cannot be resolved through resource extraction alone.
It requires better investment, stronger institutions, skills, technology, competition and businesses capable of producing more value.
But the central proposition raised by New Zealand First deserves to be examined on its own economic terms.
A country that possesses valuable resources has choices about how those resources are developed, how public revenue is collected, who benefits from commercial activity and whether the resulting wealth is preserved.
The Norwegian experience demonstrates that natural-resource revenue can be transformed into an enormous pool of publicly owned financial capital.
It also demonstrates the importance of long-term institutions that protect that capital from short-term political demands.
New Zealand First is proposing an initial step towards a comparable resource-revenue model: invest in discovering what the country possesses, establish commercial development arrangements, capture substantial public returns and use those returns to build enduring national wealth.
The scale of New Zealand's undiscovered petroleum resources remains uncertain. So do the potential returns, the development costs and the final design of the proposed fund.
But the underlying economic question is both immediate and generational.
Can New Zealand move from an economy that predominantly debates how to distribute existing revenue towards one that deliberately creates, retains and reinvests national wealth?
If resource development proves commercially successful, the opportunity would not simply be another export industry or another revenue stream for government.
It would be the possibility of converting finite natural resources into lasting public capital, productive infrastructure, industrial capability and investment income for future generations.
That is the significance of the sovereign wealth proposition.
The ambition is not simply to build a fund.
It is to build New Zealand.
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