Foster Andy; Kuriger BarbaraANDY FOSTER (NZ First): Thanks Madam Speaker. I rise on behalf of New Zealand First to support—and it's quite a mouthful isn't it Todd—the New Zealand Superannuation and Retirement Income (Controlling Interests) Amendment Bill. Look clearly so far we have heard that there is cross-party support and I hope that that will continue right throughout the debate. In fact there is so much agreement I think I might have to repeat at least one or two numbers and dates that my good colleague Todd Stephenson has just talked about. The bill is about removing that current restriction that prevents the Guardians of New Zealand Superannuation from taking a controlling stake in entities although if you look at the history there have actually been ways of their being able to work their way around that. In fact right from the beginning they were able to take controlling stakes in things like land farms and those sorts of things and so this is kind of another step along the process I think you might say. There is in the bill the requirement that over time we will look at the effectiveness of this bill so that we can see whether in fact it did enable the guardians of the Superannuation Fund to make new investments that it allowed them to do new things that they weren't previously able to do that they weren't making investment decisions which were not in the best interests of the fund and that they didn't have undue pressure put upon them—and I'm going to come back to that as I speak. The select committee recommended no amendments and this one can't have been too onerous because there were only seven submitters. I'm not quite sure how many of them actually fronted up to the committee but obviously it's not too controversial an issue. Why was the restriction there in the first place? Well one of the reasons of course was that the fund started off as a small investment fund and one of the key rules of investment is diversify diversify diversify because if you've got all your investment all your eggs in one basket and something goes wrong or your break those eggs you've got a problem. So the key thing the instruction to the fund when it started out in 2001 as we've already heard was We don't want you to do that. We want to make sure that the fund diversifies." So why remove it now? Well the first one is that the fund has been around a while now. The first investment by the Government when it started was about $2.4 billion in 2003 and so we're now 21 years on and the fund has become a lot more mature and it's a lot bigger. It is now at scale. We've already heard that number—about $72 billion or $73 billion—that it's worth at the moment. It is now a significant investor in the New Zealand market. Only a proportion of its investment of course is in New Zealand but it's at such scale that it starts becoming a restriction on the fund not to be able to invest and actually take controlling interests if that is the appropriate thing to do and if it thinks it is the right thing to do and—I do stress—if the guardians of the fund think it is the right thing to do; not if anyone else or any of us thinks it's the right thing to do but if they think it's the right thing to do. So the increasing maturity and scale of the fund is important. It is also coming into line a lot more with other sovereign wealth funds around the world that are also doing exactly the same kind of thing. As I said the fund has always been able to take a controlling interest in things like land and buildings and in 2015 it had already moved somewhat by allowing the guardians to create and control its sort of workaround fund investment vehicles. I want to sort of pivot a little bit there. In 2019 the guardians of the Superannuation Fund were also given control of a venture capital fund which was established under the then Labour - New Zealand First Government and I think that was a really really important decision. The $300 million Elevate NZ Venture Fund was what it was called and the aim there was to try and support emerging businesses—not right at the beginning but emerging businesses. The idea was also to attract private investment so that if you put in a dollar there you'd get a dollar of private investment back. So it was a sort of matching approach. But what I did note by looking at the information around that was that they also took that diversification approach there. They didn't say that they were going to invest directly in emerging businesses but they would invest in a portfolio venture capital fund—in fact a range of portfolio capital funds—and so there was diversification on top of diversification. Clearly the guardians are being very very careful about making sure that they diversify their investment portfolio and that they avoid having too many eggs in one basket. What I hope that we can look at there is that the fund is also helping build new businesses which are building more employment and that's the kind of thing that we need in this country. It's emerging businesses that become big businesses which can then employ more people and earn more revenue because that's what we need to do. So what's this change about? This change is about recognising as I said the scale and maturity of the Superannuation Fund and it allows—we've already heard—the investment in the likes of infrastructure projects or maybe venture capital opportunities.Now we've heard a little bit already about transport and infrastructure projects but what's really really important is that we don't tell them what to invest in. There can be directions made but they are non-binding directions and the Act actually says they can be only non-binding directives. So that means that the Guardians of the Superannuation Fund can actually say "Yeah very nice Minister but no not going to do that because we don't think it's in our best interest."Think about it: if you were going to invest in let's say it's a new road or a new piece of infrastructure as the guardians of the fund you are going to want to know that you have pretty much a guarantee that you're going to get a good return on that. So that means you're going to have somebody sitting behind that who says "I'm going to pay you"—let's say it's a toll road—"I'm going to pay you a decent return" or "I can be sure as the guardians of the super fund I'm getting a good return because the good return is really really important."Why is it important? Well it's important because this is what helps underpin our superannuation in the future. Actually it was really interesting to look at some of the numbers. I was thinking look the Superannuation Fund would be the thing that would start paying out as the baby boomers are sort of—you know we've got a lot of baby boomers who are drawing down on superannuation. But in actual fact it can only start drawing down from 2035-36. It starts to rise up in the 2050s and actually it peaks—according to the current projections—in 2083.Now that means that if we kept still kept at a 65-year superannuation entitlement that means that a child who is six today will be starting drawing down at the time this hits its peak—the Superannuation Fund drawdown hits its peak. So this is a long long far-sighted scheme.Speaking of far-sighted I just want to give credit to the late Sir Michael Cullen because of course it was his idea and we used to call it—often still do—the Cullen fund. This is the kind of long-term strategic thinking that we need a lot more of. It doesn't matter who it comes from but we need a lot more of that long-term strategic thinking. I've got to say it was a bit of a shame actually that somebody else—a certain Prime Minister going back to the early 1980s—didn't think to carry on a fund that was already in existence then because then we'd have been a heck of a lot better off.So the fund at the moment—look think about the performance of the fund: established 2001 first Government contribution $2.4 billion in September 2003; the Government has invested $26 billion to date; it's worth $72 billion $73 billion. So it's $40 billion more than the cost of debt over that time it's $16 billion above the passive benchmarks and it's returned an average of 9.9 percent per annum. So you look at that—the other thing I would counsel and I don't know what decisions are being made but pausing investment in this fund given the returns that it's making clearly comes at a cost. It might be nice now but it's clearly got a long-term cost. So I think we should bear that in mind—pausing investment should be done only in absolutely extreme situations.The New Zealand Superannuation Fund is very important and New Zealand First has always believed that and believed in building our economic capability and we can't do that if we don't save and don't invest. The reality is that as a nation we have under-saved under-invested because we've had to keep on importing—can we always say "We need to keep on importing more and more capital"? Yeah we do. That's because we don't save; we don't invest enough. Of course what that means—just like you're a lot better off if you don't have a mortgage than if you have to pay out that mortgage month after month after month that is what we are like as New Zealand. Because we are paying out that mortgage month after month after month and if you look at our balance of payments deficit a large part of that is the invisibles which go on debt and go on paying for equity that we've had to sell effectively as a country because we have not saved and invested enough.Look I want to finish with one more comment. Because there is one little fly in the ointment that I see and it was from the speaker just before Mr Todd Stephenson—that was Lawrence Xu-Nan—and it was this issue about trying to make sure that we do not in any way try to influence the way in which the guardians invest in the fund. He said one of the things we'd like to see—a missed opportunity when it was going through select committee—is that we're able to invest more towards productive investments as opposed to speculation investments. That sounds OK. But then he went on to talk about where the fund should be directed towards. If I can just say I think that is a very very dangerous thing. As I've said the return on this fund is really really important. The return is delivered by people who know what they're doing and they've demonstrated that. It is not delivered by us making political decisions about where investments should go.The fund is a great concept it's well run it's a significant asset to "New Zealand Inc." and I commend this bill to the House.DEPUTY SPEAKER: Members the time has come for me to leave the Chair. This debate is interrupted and set down for resumption next sitting day. The House stands adjourned until 2 p.m. tomorrow.Debate interrupted.The House adjourned at 9.59 p.m."