Hipkins Chris: New Zealand Superannuation and Retirement Income Amendment Bill — In CommitteeText is incorporated into the Bound VolumeHipkins Chris: New Zealand Superannuation and Retirement Income Amendment Bill — In Committee[Sitting date: 30 June 2015. Volume:707;Page:4902. Text is incorporated into the Bound Volume.]CHRIS HIPKINS (Labour—Rimutaka):I am happy to make a brief contribution on the New Zealand Superannuation and Retirement Income Amendment Bill. I want to respond to one or two of the comments that Chris Bishop made—the great hope of the National Party. I have to say that if he is the best debater in the National Party it has got some very tough times ahead given the lacklustre performance we saw from him this evening. Chris Bishop did understate somewhat the performance of the Cullen fund as it is colloquially known—the best sovereign wealth investment fund in the world.Let us actually talk about that. There has been a return of 19.6 percent per annum over the last 3 years. That is a fantastic rate of return that we all as New Zealanders should be proud of. That is a fantastic rate of return. But let us look at it from the beginning of the fund in 2003 when Michael Cullen set it up. Of course the National Party used all sorts of colourful language about how reckless it was for the Labour Government to be setting it up. But right the way through the entire period including through the global financial crisis the average return was 10.3 percent a year. That is a very very healthy level of return. It does show just how short-sighted the Government was in stopping making contributions to the New Zealand Superannuation Fund in response to the global financial crisis. In June 2013 the fund itself estimated that up to $10 billion had been forgone as a result of that decision.Why do we have this fund and why are we making these changes to the fund? The reason we have the fund is that we have a massive retirement boom coming and we need to prepare for it so that we have some savings set aside. This superannuation fund contrary to what some people might believe was never intended to cover the entire cost of the baby boomers’ retirement but it is designed and intended to be a contribution to that cost. It is not covering the entire cost; it is covering only a small portion of it. But the question remains: if we have not been contributing to this what is the alternative plan for paying that bill further down the track? The Government does not have one. It is happy to kick it for touch because it knows that the crunch point does not come for another 10 15 or 20 years further down the track.So how does that relate to the changes that this bill makes? The changes that the bill makes change the nature of the ways the fund can invest so that it can become a more active investor rather than a passive investor as was originally envisaged when Michael Cullen first established the fund. Why was it established as a passive investor? I guess basically Michael Cullen I am sure envisaged that he wanted the best return with the least risk. That would probably be a fair comment. But there are some good reasons why the fund would want to be investing in a different manner.The question that I have got for the Minister in the chair the Hon Paula Bennett asks whether the fact that the fund is now being given the power to be more active in the way that it manages its investments creates an opening for the fund to be investing in services where the Government itself is retrenching. So could we find for example that the Superannuation Fund is buying assets that the Government is otherwise selling? Public-private partnerships social housing—Sue Moroney: State houses.CHRIS HIPKINS: State houses. Buying up—or being given—the State houses that the National Government is trying to give away. Are the areas that the Government is exiting areas that the Superannuation Fund—Andrew Bayly: No.CHRIS HIPKINS: —could start investing in if it deemed those areas to be sufficiently profitable? One of the members over there says: “No.” How could they stop it? Bill English is actually removing the clause that would give the Minister of Finance the ability to direct what types of investments the fund could make. Therefore is there anything—this is a question for the Minister—that would prevent the fund from starting to invest in areas where the Government is retrenching? And if it can do that—and let us think back to the overall goal of the fund which is to increase New Zealand’s wealth the Government’s and the Crown’s wealth so that we have a provision here to deal with the baby boom coming—how does basically transferring assets from one arm of the Government to the other which could now happen help with that situation?So it is an open question. Is there anything to stop the Superannuation Fund the Cullen fund from now investing in those assets that the Government is selling? I am not getting any response from the Government so I am looking forward to the Minister’s contribution. She is reading intently. I am sure she is looking it up so that she can give a nice detailed answer to the questions I have been raising because there is no doubt that this fund is essential. It is required. I hope that the Government will take every step to make sure that we maximise the return out of it because we are going to need that money when the big retirement boom comes—and it is coming.