Robertson Grant; Rurawhe AdrianHon GRANT ROBERTSON (Minister of Finance): Thank you very much Mr Speaker. It's a pleasure to rise in support of this bill. At the outset what I want to do is congratulate the Minister in whose name this bill is the Hon David Parker. This is truly an idea that came from him. It is something that I know he has concerned himself with for many years both in his own life as a person who has undertaken investments over the years—and has been an entrepreneur and somebody who sought to continually drive forward new ideas new products and new companies—but also as a Minister who is aware that we as a Government do have to step up to improve New Zealand's productivity and also step up when there are failures in particular parts of the market. So Minister Parker I want to thank you for putting this in front of the House and putting so much of your own effort into getting us to this point today.We've just heard from the retiring Mr Scott. I guess the thing that I really focused on in that speech was the fact that Alastair Scott was telling us there was no gap to fill in the market. Let's pick someone at random—I don't know—Peter Beck from Rocket Lab who says that there is a gap to fill in the market. Do we trust Peter Beck from Rocket Lab or do we trust Alastair Scott in this regard? It's not just Peter Beck from Rocket Lab who has said to the Government and said to New Zealanders that there is a gap; there are many many other people indeed.This is a bill that is primarily focused on how we address one of the long-term challenges facing New Zealand and that is our low productivity. Every Government over a succession of Governments and over the decades has said New Zealand has a productivity challenge. We even saw yesterday an attempt to rehash to microwave up the soggy old fish and chips of the last Government's productivity strategy—putting that back out in front of us again yesterday. That's not the path. The path is actually to undertake some truly innovative investments to help lift our productivity. And as a Government we've done that with the R & D tax credit; we've even done that with the investment signals that we're sending in the housing market as well in terms of the foreign buyer ban and the brightline test and so on; we've done that with our investment in skills; and we've done that with our investment in innovation across the board. This is another part of that with the establishment of the venture capital fund and it is an area where there is a gap.Nobody is arguing that if you've got a start-up business in the garage you won't find someone to give you some money for that. For the most part that actually comes through family and friends and overdrafts but also through things like the seed capital investment fund and other small start-up support funds. This is about the next stage. This is about the businesses who will in the future generate many jobs for New Zealand if they get the opportunity to move forward to the export market if they get the opportunity to build better networks for their companies and if they get the opportunity to build on their good ideas that they've had to begin the start-up. So this is about a gap it is about market failure and it is about addressing one of the long-term issues that sits in front of us.I do want to correct some of the misapprehensions that I have heard from across the House. This is not about politicians deciding what's good to invest in. This is also not even about taking a risk or a punt without a commercial basis beside it; this is actually about leveraging funding. This is actually about making sure that there is the New Zealand Venture Investment Fund working with fund managers—and on a matching basis getting that investment. So there is commercial acumen at the table right away. This is not about taking risks that are undue; this is about actually leveraging funding getting a functioning venture capital market going in New Zealand and getting those with the commercial acumen and expertise to be able to do it. The difference is that this Government is prepared to put some skin in the game to make that happen not to sit back and hope for the best. We heard from Mr Scott who said Well people can make these investments." There are people with capital out there who could do this; the problem is that they haven't. This is the opportunity that we are opening up now. It's that the Government has some skin in the game and we will be delivering this through a commercial model through a fund of funds approach and through the expertise of fund managers.The second misapprehension that we want to correct is to make sure that members opposite understand that this is not about the super fund per se; the super fund itself is actually ring-fenced away from this. What this is about is the expertise of the guardians of the super fund in helping manage this and working with the New Zealand Venture Investment Fund to make sure that we manage this fund in the best interests of all New Zealanders. So the guardians of the super fund—it will require some minor amendments to that legislation as part of this—have got the role of overseeing this in the first instance with the venture investment fund on a commercial basis.The other part of this that I want to address is the way in which New Zealand as a country sees ourselves on the world stage. When we have big ideas and good ideas like the ideas that Peter Beck had at Rocket Lab what we don't want is that the intellectual capital and the job generation of those good ideas drifts offshore without a New Zealand involvement in it for the long term. Yes by all means let's have this as partnerships between New Zealand funds and others but let's make sure that the value that gets generated out of these good ideas is value that New Zealanders hang on to. I know that it's something that Mr Parker again has spent a lot of time talking about—how we continue to generate value in New Zealand and capture that value in front of us today. So I strongly support this bill. When I look at what we are trying to achieve here and what other things that will look like success for us it's that we've actually got an engagement here that's in line with commercial principles; that fund managers are securing private capital alongside that Government funding to in fact more than double if we can the amount of money that's available; that fund managers have got access to all the expertise they need and obviously that's the support of the guardians and making sure that we do that; that we attract new fund managers here; that we deepen domestic capital we deepen the capacity of our venture capital markets here in New Zealand; that we've got viable options for New Zealand companies to progress and develop in New Zealand; that we've got good returns that are appropriate to the sector; and ultimately that actually private capital does function in an efficient way and the Government at the end of this can exit knowing that it's helped create a vibrant venture capital market in New Zealand. Those are the elements that I see as success from this fund. But it is true that there is nothing ventured nothing gained. I'm not quite following down the path of my colleague Greg O'Connor around the venture capital nature of the Mr Asia syndicate but I do think short of that there are some opportunities to make sure that we do push the boat out a little. From time to time in the interests of future generations Governments have to push the boat out and say "We will put some skin in the game to make sure that we actually are building on the new ideas of our entrepreneurs and innovators." I'm pleased that the Opposition is supporting this to select committee. I invite them to enter into this with an open mind—an idea that there are new ideas that we should be grabbing hold of and that there are New Zealanders out there who deserve our support to be able to take their ideas forward. I think this is an excellent bill an excellent fund and I commend it to the House.Bill read a first time. ASSISTANT SPEAKER (Adrian Rurawhe): The question is that the Venture Capital Fund Bill be considered by the Finance and Expenditure Committee. Those of that opinion will say Aye. To the contrary No—Hon David Parker: I raise a point of order Mr Speaker. I just want to check that this doesn't obviate my motion in respect of the period.ASSISTANT SPEAKER (Adrian Rurawhe): No I'll just declare it—the Ayes have it—and now you can move the motion.Bill referred to the Finance and Expenditure Committee.Hon David Parker: Sorry I just wasn't clear. I thought that if that had gone through I might have been I querying my own—ASSISTANT SPEAKER (Adrian Rurawhe): No no.Hon DAVID PARKER (Associate Minister of Finance): I move That the Venture Capital Fund Bill be reported to the House by Monday 2 December 2019 and that the committee have authority to meet at any time while the House is sitting (except during oral questions) during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House and outside the Wellington area despite Standing Orders 191 193 and 194(1)(b) and (c). I would just ask if I could just have an indication from the Clerk that I've correctly read the motion? Thank you. I want to explain why the Government thinks it is appropriate to shorten the period. It's essentially because we want the capital to flow to this sector and we think that delays aren't in the interests of the country. We did consider producing this legislation during the Budget itself and introducing Budget night legislation in which we considered whether we should push through all stages under urgency as part of the Budget legislation. We chose not to do that because although at one level it's a relatively simple bill we thought that it was appropriate to consult in more detail with the guardians of the New Zealand Superannuation Fund with the Venture Investment Fund and with the venture capital (VC) industry. In the time since 30 May that's what we've done. So there's already been considerable pre-consultation with the industry that's affected the VC fund management industry but also with the guardians of the super fund and the New Zealand Venture Investment Fund.I can give an illustration of the need for this to happen quickly. I was at a meeting with a number of VC fund managers and a person with a long track record in these funds gave the example of his own involvement in five Wellington-based IT firms all of which have a funding need—what you'd call a series A round—that needs about $1 million each. Contrary to what other members said it's not easy to access that money in respect of these start-up ventures. You can't access public funds because of the directorial risk for making a public offering. As a consequence of that you either have to choose between competent directors if you're getting an external director or non-public methods of fund-raising. In addition the costs of accessing public markets have gone up because of the complex prospectus processes that we have now in New Zealand. So you're effectively driven to private equity sources and private equity is easy enough to get—ASSISTANT SPEAKER (Adrian Rurawhe): Can I just—sorry to interrupt the Minister but it's actually a very narrow debate on—Hon DAVID PARKER: Well it's the reason for the urgency sir. These funding needs are real. ASSISTANT SPEAKER (Adrian Rurawhe): I'm just indicating to the Minister that if he's creating debating points then that will extend the debate so he needs to be quite concise and to the point. Hon DAVID PARKER: Thank you. The other reason I would say is that you never know when you're going to have a liquidity event in the world. New Zealand encountered a liquidity event in 2008 at which point capital markets stopped to function and our VC industry and a lot of things that were good actually went on the shelf then for a while. Now there are some clouds on the horizon internationally and it could be that the co-funding that we want to get for these matched funds is less likely to be available from international and New Zealand markets in a year than it is now. None of us know when these liquidity events can change quickly from being available to being a lot more closed. So although none of us can predict that future that's another reason to do this promptly. So we think given the nature of the bill that the period ending 2 December 2019 is a reasonable one to request of the select committee and we think that they will be able to meet that date in a way that's not unreasonable."