Bayly AndrewANDREW BAYLY (National—Hunua): Thank you Mr Speaker. It's a pleasure to be talking in the third reading of the Venture Capital Fund Bill. As we've flagged before National will be supporting this bill although there are elements of it that we still do have concerns about. But we do need a bill like this because we need a venture capital industry that is more sustainable. When you look at the context of New Zealand we've got an economy that is starting to slip backwards quite rapidly with a decline in GDP by 1 percent or roughly $3 billion a year of lost opportunity; we've got high levels of people now on the dole—over 22000—and we have seen a decline in the number of new jobs being created from a high under National of 10000 per month which is now down nearer to about 3000 per month and that's just lost opportunity for people to be involved to be gainfully employed and to be earning more money. Also we're now seeing two years of a flat economy largely because the investment community and the mums and dads that own the hundreds of thousands of small businesses around New Zealand are worried about the situation. They're worried about the New Zealand situation where things are just not going ahead. We hear all these excuses—and again we've just heard Minister David Parker talking about international trade winds—which really on the face of it don't stack up because exports are at a record high because of incredible terms of trade. So that's not the situation. The situation why we've got declining GDP and declining incomes for New Zealanders is because of what's going on here with Government policy. But this Venture Capital Fund is a way of dealing with what people term the valley of death in investment circles. You have the seed capital which is the very first stage; then you have the venture capital; and then you have private equity before you move on to traditional banking arrangements which help fund and turbocharge our businesses. So this is a way of dealing with that valley of death—that second stage—where people who are often young people invest their time and a lot of their money and often their family's money to try and start up these new businesses that in the end ultimately sometimes achieve great things. There have been many examples in New Zealand but they're not always that numerous. But the ones we have seen have been fantastic: Rocket Lab LanzaTech and if we go back in time a whole raft of ones which have come out of a huge amount of work and have come out of people taking risk. They've been prepared to invest their time to not take full salaries to borrow money from friends and family and for the friends and family to back them even though they know there's often little chance that they're going to be successful. So this bill creates an opportunity to amass $300 million with $240 million coming from the New Zealand Superannuation Fund and $60 million from the New Zealand Venture Investment Fund and that is an element of trying to make the venture capital industry more sustainable. So that is the first issue. The first issue is that the Government can put up money but the most important thing is that we end up with a more sustainable industry and that means that we have the New Zealand venture capital scene being prepared to continue to invest alongside this fund and to make sure that it achieves a recycling over time and that people find the confidence to do that. One of the interesting things is that the terms of this Venture Capital Fund in terms of the Guardians of New Zealand Superannuation—who will be overseeing it—could theoretically be achieved by using just the international players that would be involved in it and that in itself would be highly disappointing. A number of the submitters including Lance Wiggins and a number of other people highly involved in venture capital firms in the sector in New Zealand suggested there needed to be much more clarity around the purpose of this Venture Capital Fund and that is an ongoing issue that we are concerned about. But the ultimate aim must be to ensure a more sustainable venture capital industry. The other thing that's really intriguing—and I've noted this before—is that I've never found an example and I've never even heard of an example where you set up a fund like this with $300 million and you do not set a required rate of return or a financial target to achieve because what that means is that you can invest in these businesses and you're not worried about what sort of level of profitability you achieve and ultimately whether in fact you get your money back. That is all part of that recycling I talked about and it is incredibly unusual for a fund to be set up on these grounds with no targeted return. That I find very perturbing when you're talking about $300 million that we're spending of taxpayers' money on this particular part of the sector which is a highly risky part of the investment cycle. I think this is an oversight and it shows a lack of commerciality of the Ministers overseeing this particular proposal. The other one is that there's no clarity around the nature of investments so what type of investments should the fund be investing in? That is a really important thing particularly where you're trying to grow New Zealand's economic activity and trying to grow a minnow into a giant through the venture capital process. I think that lack of clarity is a worrying thing as well. The other aspect that's come to light is that this particular fund will be required to pay tax yet at the same time the Provincial Growth Fund run by the Hon Shane Jones and the new green fund that the Greens were very keen to have set up both have tax-exempt entities. So I'm not quite sure of the justification why this one should be paying tax particularly when you've got no financial objectives for it. It's incongruous and inconsistent. These are some of the issues that we're worried about. Then more recently we've had some extensions of what the Guardians of New Zealand Superannuation who are going to be managing this fund are going to have to meet in terms of overall objectives and they are set out in clauses 32 and 56 which mean that the Minister can now interpose himself—at the moment—in terms of what the guardians report about the Venture Capital Fund in their annual reporting cycle and More importantly they require the guardians to have regard for the wider objectives of the Government particularly around taking into account all the aspects of government and making it a more inclusive Government. I would say to you that this is blurring of the objectives of what otherwise should be a very clear objective—namely to invest in New Zealand businesses to help and promote them to make sure we get at least our money back and hopefully make a return on it so that we can create a successful venture capital industry in New Zealand. It should be crystal clear yet under this legislation and under this Minister it is very very blurred and I think possibly the words the Minister just spoke—about being sure this is going to be a very successful entity—may in time come back to haunt the Minister.With all those issues that we've raised none the less we will be supporting it. There are other aspects we have raised about it but in the main I hope we will have the opportunity to clarify its objectives in time when hopefully we come back into Government because this does need some clarification. But in terms of the general intent of it we do support that and I commend it to the House.