Clark David: New Zealand Superannuation and Retirement Income Amendment Bill — In CommitteeText is incorporated into the Bound VolumeClark David: New Zealand Superannuation and Retirement Income Amendment Bill — In Committee[Sitting date: 30 June 2015. Volume:706;Page:4894. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North): I want to say from the outset that fundamentally this is a good bill. It is nice to stand here on this side of the Chamber and be able to congratulate the Government on taking this step forward and approving some changes to the New Zealand Superannuation and Retirement Income Amendment Bill.Here we have some positive changes happening particularly in respect of superannuation in New Zealand which we know is a big issue that does need to be tackled. This is a Government that in the past has shied away from dealing with this problem. We know John Key has said for example that he would not tackle the superannuation age while he was Prime Minister. He has been very clear about that. He has not suggested any other ways to tackle the fact that currently we have five New Zealanders in the workforce supporting one person in retirement but in a few decades’ time we will have only two New Zealanders in the workforce to fund one person’s retirement. We have got as a country to have a mature discussion about this and come up with really sensible suggestions as to how we can tackle this particular issue.Part 1 of course is the substantive part of the bill and so it is good to see that the Government is tackling this issue in at least one respect here by making changes to the Superannuation Fund that are positive. I am sure that they will all be leaping to their feet shortly. I can see Chris Bishop penning some notes so he will certainly be a contributor who will have something to say about the good things the Government has done.But also let us not forget that at its outset Bill English called the Superannuation Fund a dog and it has proven to be an incredibly successful fund. We know that if the Government had continued with the contributions as was done previously in fact it has been estimated—and this is a 2013 estimate—that there would be $10 billion more in the fund and that is from the forgone contributions. The Government has not been particularly wise in the way it has handled the fund up until now.On the Finance and Expenditure Committee of course we did discuss the fund investment vehicles. What Grant Robertson has said about the nature of the debate is absolutely true from my experience on the select committee. There was a consensus around the kinds of changes that needed to be made in the bill in order to ensure the correct protections were in place. Because the Superannuation Fund is doing an active type of investment on all taxpayers’ behalf to give the Minister of Finance some oversight of those decisions on behalf of the taxpayer was part of the conclusion of the Finance and Expenditure Committee that was agreed across the select committee. We did debate long and hard the minutiae of the bill because this is New Zealand’s future. This is our Superannuation Fund that has got huge returns that is internationally respected and that is generating wealth for New Zealanders.We found it our duty to find out more about the nature of the proposed changes. The officials were fantastic. They supplied us with the information we needed to work through those decisions and to come up with the best recommendations back to this House. I want to put on record my thanks to the officials who served the Finance and Expenditure Committee. Some of them are sitting here in Parliament ready to advise should we need technical advice now. Thank you to those officials who helped us through that process and helped us work out what the tweaks needed to be to make sure that this Parliament’s oversight was protected to make sure that we had the right kinds of policies in place that would ensure that this new opportunity was grasped with both hands and taken into the future.It was a constructive process across the select committee as it usually is. That constructiveness is rarely seen in the media of course but I think it is worth commenting on it here. We know that it is a wise move and we have agreed that it is a wise move. The advice is that it is wise move to have these more active investment vehicles.Bill English is now proposing an amendment that would remove his oversight of this spending. Part of the reason that this oversight was suggested of course is the limits of the Official Information Act. That was part of the discussion that we had. Where was the Official Information Act in all of this? So we went back to look at the first principles. The Official Information Act gives Parliament the protection and the oversight of the spending decisions. Would these new fund investment vehicles be subject to the Official Information Act? Well actually no they would not be in their entirety. However the fund investment vehicles would be in so far as the Superannuation Fund itself is subject to the Official Information Act.The Superannuation Fund in recommending who the people were who were controlling the projects would have overall accountability and we could see that Parliament or any member of the public who had access to the Official Information Act—which is all members of the public—could ask legitimate questions about the oversight of these vehicles via the Official Information Act. Of course a good deal of material we would expect would be withheld for commercial reasons—certainly for a period of time when these investments were in place. But the principle remains that the public can request information about the governance arrangements to be sure that these new vehicles are being used in an appropriate way and in a way that benefits the taxpayers of New Zealand.So we had comfort that these new vehicles had sufficient oversight in place barring the suggestion that perhaps the Minister of Finance should also have some oversight on behalf of all taxpayers for these new investment vehicles. That seemed a perfectly reasonable point to reach on the evidence that we were given as a select committee and after the lengthy discussions that we had so that was what we settled upon and brought back to the House. So it is somewhat surprising to find that the National members on the select committee now support we are told an amendment that goes in quite the opposite direction and removes the Minister of Finance from that picture. So I think that people at home watching this debate will draw their own conclusions about what is happening here.Hon Ruth Dyson: They got rolled.Dr DAVID CLARK: They got rolled my colleague says—they got rolled. There is political expediency at play here. Perhaps the Minister of Finance did not wish to be caught in any fund investment decisions that went wrong. Maybe he was trying to remove himself one step further. We think that is abrogating a responsibility that the Finance and Expenditure Committee after seeing the evidence thought was a sensible step to take.This current Government does of course have a philosophy of allowing—it will tell us; and I am sure Mr Bishop will correct me if I am wrong—the market to have its way. So a part of that is of course having the fund at a distance at arm’s length to allow it to make wise investment decisions. We of course support that basic principle. That is why it was in fact Labour that introduced the bill that brought the Superannuation Fund to life a fund that has attracted international recognition for being a superior fund and producing superior returns. It has been set up that way.The changes that were proposed by the select committee were modest but they were there for a good reason: to preserve the oversight of that decision making; to make sure that there was accountability for this new direction that the investments are going to take. So we find it surprising of course to come to the Committee and find that the Minister has moved an amendment and that those very same people who argued on the select committee for the merit of a particular proposal now find themselves in the somewhat awkward and embarrassing position of arguing the opposite. I very much look forward to some of the logical contortions and the debates that will follow. We might have a bit of fun in the Chamber tonight as we hear some of those MPs stand up and say that black is white and that in fact white is black and that they knew that all along. I am sure Mr Bishop will have a contribution along those lines. He can be an entertaining speaker and I hope that we can all enjoy his contribution as he now explains to us why these fund investment vehicles should no longer have the oversight that the select committee agreed that they should.This is a great fund. The bill is overall one we would like to support because it is a small step towards taking the savings question seriously—a question that this Government has shied away from in so many instances in its seven cuts of the KiwiSaver scheme in its failure to put contributions into the Cullen fund and in John Key’s ruling out of tackling the issue of retirement savings costs going up without a plan to address it. In so many ways it has failed on retirement saving. This bill is actually a positive step overall in the right direction barring this one very unusual contortion which I am looking forward to members opposite explaining for our entertainment. Thank you.