Smith StuartSTUART SMITH (National—Kaikōura): Thank you Mr Speaker. I rise unexpectedly because I thought I had another five minutes before I got to my feet. But that being said we can adapt—that's fine. It's a pleasure to speak on the New Zealand Superannuation and Retirement Income (Controlling Interests) Amendment Bill—which almost took up a minute. All joking aside this is a very important bill and I want to push back on some of the points just made by Celia Wade-Brown the previous speaker. But prior to doing that we should talk about what the bill is about. Actually the New Zealand Superannuation Fund is of huge importance to New Zealand as a whole and New Zealanders in particular. We have an ageing population and we know that. We have an issue with our finances at the moment and having the Superannuation Fund which will in time be able to underpin our superannuation scheme is I think a fantastic resource and an asset that we should ensure has all the tools it needs to operate efficiently.This bill allows the Guardians of New Zealand Superannuation to hold a controlling interest in companies. Currently they're precluded from doing that as I'm sure members are aware. But if we go back and look at what they were founded under the fund's purpose was to make money from investments rather than to own companies. That is one of the reasons why they're not able to hold a controlling interest in a company. In the early days I accept that that was quite a sound rationale but nowadays things have grown. The fund is worth in the high $60 billions to $70 billion now. That's a lot of money and that's what we lack in our capital markets. We lack depth in our capital markets and that means often that companies look offshore. Nothing wrong with overseas investment—I have nothing against that—but having domestic investments is important as well. The Guardians have invested quite significantly offshore as well and they have a balance of investments in all sorts of investments. They've got equities and all sorts of other investments but having a broad portfolio is really important. But now given the size of the fund and that lack of capital depth in New Zealand it is important to allow them to be able to take an interest which might well be a controlling interest. That test of a controlling interest is quite interesting because what is a controlling interest? It's not necessarily 51 percent as people might think; it could be quite a bit smaller than that. Because of the way company shareholdings work it could be as little as 20 percent or even less in some diverse shareholding companies which is quite common in equity markets.But I note that Celia Wade-Brown—who is a member I really respect and I respect her opinions but I do differ on some things that that she said. Investing in strategic infrastructure—yes I think the problem we run into when we start prescribing what you can and can't invest in is that you're then limiting choices. Limiting choices means probably—almost certainly—limiting returns. So we have to make a decision of do we have a superannuation fund that is something we want to achieve political ends with or is it something we want to secure superannuation with and I'd argue strongly that it should be the latter. I think we have Kiwis who have worked hard to pay for superannuation. They are investing in their future and their family's future effectively because with a bit of luck they might pass something on to their people who are their heirs and successors. So I think it's important that we therefore allow the Superannuation Fund to grow as quickly and as safely as it can and to do that it means that we'd need to take a broad range of investment positions. I think we can all agree that we don't like investing in tobacco. I don't think that's a good thing. I agree with that—I don't have any issue with that at all. But it's a dying industry anyway so would you probably invest in it? It's unlikely. Whale meat—again the same thing. I don't think anyone would disagree with that—I certainly wouldn't. But in settlements in Israel—well I don't know. That's going a bit far away; I'm not sure about that. Would we even invest in that given the unrest in that area? I think any sound investment manager would say Well that's not for me." The investment returns would have to be extreme to say the least to do that. Then firearms—well yes but sometimes firearms are needed. Which ones are we talking about—not sure. We'd have to prescribe that.But I just gave a speech last week which I know members would be very interested in because it was at a public accounts committee conference in Perth. My speech was on sustainability reporting and public accounts committees' role in that and one of the issues for me is when you require say banks and financial institutions to report on their emissions profile—stay with me on this Mr Speaker it does relate to this—that—ASSISTANT SPEAKER (Greg O'Connor): As long as it's not a travel story Mr Smith.STUART SMITH: Well I was just checking. Once you start prescribing that sort of thing you end up in a situation where—I went and I visited a farm when I was in Western Australia that I used to work on. They've got a tractor that burns 76 litres of diesel an hour. If they wanted to buy a more fuel-efficient tractor electric vehicles are certainly not an option and are nowhere in the future for that type of operation and they'd go to their bank and say "I'd like some money to buy this new tractor." and the bank would say "Oh no we've got too many agricultural emissions on our books. We're not going to lend you any money." That's the sort of thing that happens when you start prescribing what you can and what you can't invest in and I think it's so short-sighted. We haven't thought this through. We're not talking about landmines here. Often what we're talking about is energy which is the blood of life really. There's a close relation between energy—Simon Court: Crude flows in your veins Mr Smith.STUART SMITH: Oh yes. There's a close relationship between energy and wealth and wealth and life expectancy and I would say one thing about life expectancy is that as a politician I don't think your life expectancy is going to be that great if you want to reduce the life expectancy of your constituents. I think that is the issue with trying to control investment decisions and I think that the Superannuation Fund is very well placed to make investment decisions and to make risk assessments on what their investments should or shouldn't be. I think we should leave it at that and that is why I wholeheartedly support this bill. Thank you."