Where Does Wealth Come From?

Speech to ACT’s 2026 Campaign Launch – Where Does Wealth Come From?

Introduction

Welcome to the official start of ACT’s campaign to do two things:

Number one: Lock Labour Out.

Number two: Unlock New Zealand’s potential.

As I said at our rally in June. ACT has three unique advantages this election.

Number one: We are not Labour.

Number two: We've never worked with Labour.

Number three: We are not Labour lite.

As one wag put it last week, the ACT Party's job is to keep Labour out of Government and Labour's ideas out of National.

I thought it was a clever line, but lately it's become very serious.

It's important to keep your head when others around you are losing theirs.

Our party campaigns this year to steady the ship in a sea of political panic. We must hold true to our north star, or our proud little country will be lost to weak leadership.

Our candidates are here because they sense the panic, and they know our country needs calm. They are small business owners, engineers, farmers, teachers, and Mums and Dads who believe in this country's potential, but fear for its future if the government changes.

I want to thank each ACT candidate for standing, and a few others. To every person who's made a donation, knocked on a door, put a sign on their fence or talked 'round their workmates to ACT, thank you for backing our candidates, this election belongs to you.

ACT enters this campaign in good heart with great momentum, and that's thanks to every single person who's sacrificed to make that possible.

The Cost-of-Living Election

Every election gets a label. 1984 was the Snap election. 1996 was the first MMP election. 2017 was the kingmaker election. 2020 was the COVID election.

So what will 2026 be?

Maybe people will call it the cost-of-living election. At one level that makes sense.

Ask New Zealanders what is bothering them and the answer comes back again and again - life costs too much, wages do not stretch far enough, and too many young people wonder whether their future might be easier overseas.

Our political opponents are right, the cost of living is the number one issue in polls and focus groups, but they don't understand the real problem underneath it, or the job of a political leader.

Voters do not want leaders to parrot back their every concern. Empathy is not enough, and who would rely on a politician for empathy anyway? That's why Labour are languishing in the polls. They're like an AI counsellor with a parrot voice.

Someone told Labour it's too hard to cancel their gym membership, guess what policy Labour announced this week! Polly's going to simplify your gym membership.

Of course, their policy won't make it cheaper to run a gym. Gyms will still need to cover the same costs, plus comply with a new layer of bureaucracy. They'll need to recover all the cost in the base price, defeating the whole purpose of the policy.

All their policies are the same. Whatever your problem, they agree with you. But they won't actually treat your problem, just the symptoms. If they can fool enough people for five weeks it doesn't matter.

Empathy does matter. A real leader's job is to have a soft heart, but keep that softness from infecting their head. That means understanding that the first and most obvious solution is usually wrong.

There’s a panic, a helplessness in the way other parties are approaching this ‘crisis.’ They are reaching for the first and most obvious solution every time they have a bad focus group.

People say prices are too high, so politicians parrot back the answer. "You think the prices are too high, we'll punish the people charging you those prices."

It's not only a failure to diagnose the problem. It's a failure of leadership.

The Productivity Election

Real leadership would sound something more like this. "Yes, the pain is real. People are struggling to afford today what they once hoped progress would put in reach.

"Some people even have less left at the end of the week than they did, say, seven years ago. They are struggling to afford what they used to.

"The problem is not just that prices have risen. That's happened all over the world. The problem is that New Zealand wages have not risen as fast as prices.

"What we have is not a cost of living problem, but a productivity problem.

"New Zealanders work harder than most of the world by hours worked, but they take home less due to poor productivity.

This, a leader would say, is not a cost-of-living crisis. It is a productivity crisis.

This should not be the Cost-of-Living Election, it is the Productivity Election.

A productivity election is a different election. In a productivity election, we ask a different question. Where does wealth come from?

In a productivity election, there is no point in Government attacking businesses. Consumers need them to succeed. We need them to invest and innovate. They need their government policy to uphold their rights, not be the biggest risk.

That starts with politicians understanding productivity.

When did you last hear a New Zealand politician say the following:

That “a person’s hard work, success, and wealth should be celebrated.”

That “business is a force for good. Entrepreneurs, investors, workers and customers achieve together what they couldn’t achieve alone. They do it voluntarily and it's a beautiful thing.”

That “profit is a good thing, because it means people are getting more value from what a business sells than from the resources it consumes.”

That “higher wages come from higher productivity, not from politicians passing laws.”

That “lower, flatter taxes encourage people to work, save and invest.”

That “new regulations should only be foisted on New Zealanders if there is no other solution, and the benefits outweigh the costs.”

ACT will continue to proudly defend these values, even if no one else does, because we have to face the root cause of our problems head on.

Which brings me to the core question, one that no politician seems to want to ask - where does wealth come from?

The problem is we have completely forgotten to ask and answer this question in New Zealand. It's like we've had a golden goose called the market economy. We've taken wealth for granted.

Why we feel poor

Government policies have attacked wealth creation, for decades now.

They said if a public holiday falls on a weekend, that’s no problem, you get Monday off.

They said you can be sick ten days a year, even if you only work part time. The Government seemed to create a sickness crisis overnight.

They said publish a report on your climate emissions, even if it makes no difference to global emissions.

They said the government could pass a law to protect us from earthquakes, even though it cost $10 billion to save no lives.

They said 'stay home, save lives' when human interaction is what drives so many businesses.

They said the government wouldn't just make your workplace safe, they said it would make your safety someone else's problem.

They said you'd earn one of the highest minimum wages in the world, compared with the median, without any experience.

They ensured the personal grievance process is so protracted, it's easier for an employer to pay someone tens or thousands of dollars than manage them out for underperformance.

They made everything about race, so you had to work out when your ancestors got here to know your rights.

Universities have said they are tiriti-led, as they plummet down the global rankings. Procurement has been designed with racial preferences to uphold the Treaty.

Resource Management law has given practically everyone the right to say no to practically everything.

Building standards have tried to put safety ahead of innovation but ended up killing both.

I could go on. For twenty years, nearly every government policy has been some tax or regulation to make productive people pay for others to have a better life.

Politicians with soft hearts and soft heads have caved in to every demand without counting up the costs.

The underlying disease is a belief that we can vote ourselves rich because politicians can just wish ourselves a wealthier world.

The debate over ACT's minimum wage policy is a classic example.

Decent, fair-minded people tell me they've been put off ACT because we won't raise wages for the poorest. The problem is no political party can do that.

Growing skills and experience, in a workplace with more innovation - that can raise wages. When workers produce more, their company can afford to pay higher wages, and to keep them it will have to.

Our policy doesn't stop employers raising wages. It gives more unemployed young people a chance to get on the ladder to higher wages. We are trying to help those 15 per cent of 15-24 year olds who are Not in Employment, Education or Training.

They find themselves in a catch-22. They need experience to get their first job. They need their first job to get experience. It's a cruel trap. A lower minimum wage makes it easier for an employer to give them a chance.

Far from stopping wage increases, we are making it easier for young people to get off the dole and start getting wage increases.

The state of debate around our policy shows how we've forgotten about wealth creation.

How many policies, besides a few in the last three years, have been designed to actually make New Zealand wealthy?

There's an old saying that everyone wants to go to heaven, but nobody wants to die. In this election every other politician wants to give wealth away, none of them care to think about where it comes from.

Politicians are going to spend this whole campaign debating how wealth should be divided, or whether a specific industry should be made the villain of the piece and punished. After two decades of chasing every political goal under the sun except wealth creation, guess what?

We don't feel wealthy.

Affording a decent life is the number one political issue in New Zealand. As an old genius said, “we won’t solve the problem with the same thinking we used when we created them.”

Where wealth actually comes from

We need to go back to the start and ask the question. Where does wealth come from. And I mean way back.

Adam Smith published An Inquiry into the Nature and Causes of The Wealth of Nations. 250 years ago.

He wanted to understand why some societies became prosperous and others did not.

His famous example was a pin factory.

One person trying to make an entire pin alone would be painfully slow. Divide the job into specialised tasks, let people become very good at each task, invest in tools and machinery, and suddenly the same group can produce vastly more.

That is productivity.

Then they can trade with other people who need pins for things they need like meat, beer, and bread from ‘the butcher, the brewer, and the baker’. The ‘invisible hand’ tells people what to produce because it sells for more.

Two and a half centuries later, the technology has changed, but the principle hasn’t aged a day. Wealth comes from people solving problems for other people.

Builders who find a faster way to construct a house. Engineers who design a better machine. Farmers who improve their output from the same land. Software companies that let a worker do in ten minutes what once took an hour.

That investment and innovation come from four groups cooperating.

Entrepreneurs have ideas.

Investors risk their savings.

Workers contribute their time and talents.

Customers have needs they could not satisfy alone.

If it goes well they make a profit. It shouldn't be a dirty word. Profit means customers value what is being produced more than the resources used to produce it.

This whole process only works if you can plan your future. If a baker buys a bigger oven they can bake more bread, but it takes time to pay it off. They won't invest if they think criminals will take it off them, or the government might attack their business instead of upholding their rights.

I'm proud our government has been tough on crime. We haven't just locked labour out, we've locked the criminals in. We are the party of Three Strikes, of ending 'cultural reports', of protecting sole-charge workers, and putting all victims first.

2,000 more in prison and violent crime down by over a quarter, ram raids are almost unheard of. It's not a coincidence. Labour let the gangs and violent criminals out of control, you can't trust them on law and order.

Now we must go further and faster. Three burglaries, three years in the slammer. Abuse a pet to manipulate your partner, a new crime of coercion by animal abuse will be punished up to seven years. We'll give security guards real powers if they have the training to become Accredited Security Officers.

It's critical for business that criminals don't take your stuff, but they're not the only threat to business this election.

Every other party's solutions to the cost of living crisis will destroy wealth.

The Greens want to nationalise Supermarkets. We call it Pack'n'Soviet.

National say they're economically reckless but want to forcibly break up the same businesses on the flimsiest of evidence.

New Zealand First say a government-owned supermarket is communist, but also want to nationalise a bank.

Labour don't know what they stand for but they also want to restructure the supermarkets, if it's anything like their health reforms, we'll all starve.

If you're having a hard time telling the difference between these policies, that might be because they're all the same. Conduct a focus group, hear a concern, identify a villain, make a crazy threat against them. Rinse and repeat.

The productivity agenda

ACT is the only party campaigning to make New Zealand a wealthier place, and we have the receipts.

We've made it easier for investors, entrepreneurs, workers and customers to get together and make tomorrow better than today.

We've cut wasteful Government spending, so we can grow the country. Every dollar the Government wastes is a dollar the private sector could have used for wealth creation.

ACT policies and ministers have saved $14 billion. It is not as much as we'd like. It's more than our colleagues would have done themselves. The next government needs more ACT to save more money.

If you want businesses to borrow at low interest rates and employ more people at higher wages, you must vote for the government to stop competing for resources with wasteful spending.

If you want investment to pay off and be recycled, with less tax, the government needs more ACT.

Our party has been at the forefront of reducing red tape and deleting stupid rules. Business can get on with production instead of needless compliance when only truly necessary rules are made.

The Holidays Act replacement.

The new Resource Management laws.

The Earthquake Strengthening law reversal.

Health and Safety reforms.

Employment law simplification.

Anti-Money Laundering simplification.

Farm Environment Plans.

A quarter billion dollars of deregulation by the Ministry for Regulation in everything from hemp growing to hair dressing.

We've made it three times faster to get consent for an overseas investment, from 71 days down to 23.

If a medicine is consented in two other countries it's consented here in under 30 days, and you can get pseudoephedrine again.

This government has been a deregulation government, and ACT has been the driving force behind deregulation.

Many of these changes will only come into effect in the next two years, like the Holiday's Act and Resource Management Reforms.

In the next government, we will keep cutting red tape and deleting stupid rules.

We will turn our deregulatory guns on regulations affecting the big sectors that are driving expense. On The financial sector, on the grocery market, on councils.

We won't be attacking them. Everyone is tired of the idea that 'the beatings will continue until morale improves.' We'll be helping them boost efficiency and competition, with lower regulatory costs.

That is what a productivity agenda looks like.

Saving is part of wealth creation

Back to Adam Smith, there is another part of his story. Saving.

It's good that we have cut red tape. It helps that we've stopped criminals driving cars into businesses. It's good that we've cut $14 billion of waste. But there’s something else we need to do to boost savings.

Investment cannot happen without saving, and saving means someone giving up spending today because they believe tomorrow can be better.

Today we announce a policy that ACT will be campaigning on to boost savings and therefore investment in New Zealand.

Every other party wants to force you into KiwiSaver, then tax you hard on your returns.

ACT is proposing the opposite. We don't support compulsion, but we want to offer a sweetener to KiwiSavers.

People should be encouraged to build savings of their own so they can live a comfortable life in retirement. But the tax system currently works against them

The Government taxes your KiwiSaver investment earnings year after year, for as long as you save. The result is less money compounding over a working life. The reduction in retirement savings from that tax on compounding interest is staggering. ACT will remove the tax on KiwiSaver returns.

Long-term investments benefit from the magic of compound interest. Every year, a KiwiSaver account earns interest on the balance. That balance includes interest earned last year. Next year’s interest is calculated on a new balance, including interest earned this year, and so it goes on.

Interest on interest, year after year, grows your KiwiSaver balance exponentially. There are two ways to get a higher balance. One is to invest longer, the other is to get a higher interest rate.

Getting a good interest rate is part luck and part skill, but there's one thing we can control. That is how much tax the government takes off your interest each year.

Take the rule of 70. The time taken to double your balance in years is (roughly) the number 70 divided by the interest rate.

At 10 per cent interest, with no new contributions, it takes seven years to double your balance.

At seven per cent interest, it takes 10 ¼ years to double your balance.

Say you work and save for 42 years. Your balance can double six times in a 42-year career at 10 per cent, or only four times at seven per cent.

The difference between doubling six times and four times is large. Doubling an extra two times at the end leaves a retiree with roughly three times the balance.

Then the taxman butts in.

If you pay 30 per cent tax on your 10 per cent interest, your after-tax rate is only seven per cent. These are indicative numbers. I chose them because they're round and easy to follow. 10-7-70. But whatever numbers you choose the powerful. Here are some real numbers based on known returns.

A 25-year-old nurse earning $100,000 would see an additional $217,366 in their KiwiSaver by the time they turn 65.

A 40-year-old small business owner earning $120,000 would see an additional $69,100 in their KiwiSaver by the time they turn 65.

A 50-year-old office manager earning $80,000 would see an additional $20,878 in their KiwiSaver by the time they turn 65.

The biggest advantage of saving for retirement is time. Money invested early can earn a return, those returns can earn further returns, and over decades compounding can turn relatively modest contributions into a substantial nest egg.

Compounding is one of the quiet miracles of finance.

Tax a dollar before it compounds back into the account and you do not only lose that dollar. You lose the decades of compounding returns it might have generated.

A country builds wealth when more people own assets, have savings, invest in productive enterprise and have the confidence to think decades ahead.

This policy is part of our fully costed Alternative Budget. We declare it will reduce Government revenue by around $1 billion per year. We will show in that budget how this is achievable.

The question behind the election

The real question people are asking this election is sad and serious.

They're asking, is New Zealand finished, or can we turn it around?

They notice how many have already voted with their feet lately. They wonder what this election holds, and whether they should prepare to follow.

They look at the offerings of parties they thought they could trust, and they look like offerings from parties they know they cannot trust.

From under the gloom and fatigue comes a whisper. Never give up.

This country has unlimited potential. There is no reason why the most decent people in the most beautiful land should not create a paradise that is also prosperous.

When things seem hard, we can draw on our heroes to remind us what this country can be.

We know, from one of the greatest New Zealanders, that a Kiwi can stand on top of the world, yet have the kindness and decency to build a society we can all be proud of.

We know, from another New Zealand great, that we are at our best when all of us, have equal political rights.

We know, from another hero, that Kiwis can win, if we unite behind a cause. Make the boat go faster.

We have not lost our potential, but we have not reached it, lately. We must cast off the tall poppy syndrome, and realise we can be the best, and be humble at the same time. We must realise that equal rights are in our DNA.

We must make this a place where all of us have an equal chance to make the most of our time on earth, and be proud of it.

Ladies and gentleman, New Zealand is far from done. We need to courage to unlock it's potential, and that takes leadership.

It takes political leaders who are prepared to do more than parrot back what they hear in focus groups as if caught in some relentless political doom loop.

It requires leadership with the heart to feel the pain, and the head to navigate out of it.

I'm proud to lead the only party that isn't campaigning on policies that will destroy wealth.

I'm proud to lead the only party that understands where wealth comes from, as written down 250 years ago by a Scotsman who cared about ending poverty.

I'm proud of the progress we've made, by ACT's consistent and effective MPs.

We've cut the waste to grow the country.

We've cut red tape to grow the economy.

We've ended division so we can have one law for all and one future together.

That is how we unlock this great country's potential.

For five weeks we will campaign like the future of this green and pleasant land is hanging in the balance, because it is.

We will fill the halls, pound the pavements, stuff the letter boxes, (and post on social media) to bring a message of hope.

There is no reason why we cannot be the wealthiest on earth. As the great man once said, it is not the mountain we conquer, but ourselves.

We must overcome our self-doubt as a nation, and rediscover where wealth truly comes from, then set about solving our problems with calm, clear analysis until our troubles are overcome.

That is the promise if you give your Party Vote to ACT.

To Lock Labour Out.

To Unlock New Zealand's potential.

To re-elect the coalition and make it go further and faster on the issues you care about.

The future of this country is in our hands, and I plead for your support on behalf of all our futures.

Thank you very much.

Party. Vote. ACT.