Parker David: New Zealand Superannuation and Retirement Income Amendment Bill — In CommitteeText is incorporated into the Bound VolumeParker David: New Zealand Superannuation and Retirement Income Amendment Bill — In Committee[Sitting date: 30 June 2015. Volume:707;Page:4896. Text is incorporated into the Bound Volume.]Hon DAVID PARKER (Labour):I rise to take a call on Part 1. The purpose of the amendment to the bill that came to the Finance and Expenditure Committee and that was recommended by that committee to insert new section 59A was not to allow the Minister of Finance to interfere in any one investment decision by the Guardians of New Zealand Superannuation but was to exercise some control over what class or classes of investments or activities ought to be allowed through a fund investment vehicle which overrides the original protection that was set out in the legislation that the guardians ought to be passive rather than active managers of investments.The reason for the insertion of that provision in the original legislation was sound. It was overseen by Dr Michael Cullen. He was concerned that the fund would come under the influence of politicians—an investment fund that would invest in the sorts of classes of investments that ought not be funded by a superannuation fund but ought to be funded by a Government. The reason for that—Chris Bishop: Protecting the fund from his own party.Hon DAVID PARKER: That deserves a response actually. No that was not the intention at all. This side of the Chamber generally properly funds things that ought to be funded off the Government’s balance sheet by collecting enough taxation to fund the things that ought to be funded—things like roads things like—Eugenie Sage: Schools.Hon DAVID PARKER: —schools things like hospitals none of which would be privatised by this side of the Chamber but those are things that would be privatised by the National Party’s side of the Chamber. If the National Party privatised them in order to get its seedy little plans off the books it would actually be encouraging the superannuation fund of the day to effectively underwrite its mismanagement by paying for some of the things that the Government had not funded through the appropriate collection of taxation.Dr Michael Cullen foresaw that as a problem because he was and is a historian who has seen these things go down in the past. Where that comes unstuck at some future date is when the superannuation fund is wound up and the money is realised from their investment at a time when New Zealand will be cash-strapped in meeting the increasing costs of superannuation in the future. It is a nonsense if the Government is effectively asking for money out of the economy to put back into the economy at a time when the economy may be stretched to find a replacement investor. So the reason we had these underlying controls on what the superannuation fund could and could not do was to avoid that eventuality.Since then we have had a number of changes made by the National Government. It came to power remember promising to increase the proportion of the superannuation fund that was invested in New Zealand. How has that gone? I am surprised we did not see any reference to it in this bill because if there was a place for it to be it would be in Part 1 where the objectives are for the superannuation fund and what the restrictions are would be restated. The Government has not actually achieved that objective. The reason it has not achieved that objective is not the inability to use fund investment vehicles but that the idea was not sound in the first place.Dr David Clark: Another broken promise.Hon DAVID PARKER: Another broken promise by the National Government. In any event we come to the change that is proposed. There are instances when controlling interests are held in New Zealand - based investments. In order for that to be done more practically it is good that the Guardians of New Zealand Superannuation will be given the ability to use fund investment vehicles. But it is none the less a departure from what was originally intended and lets us get closer and closer to the guardians becoming an active manager rather than a passive manager. That is why the control that was provided for unanimously by the select committee in new sections 59A(1A) and 59A(1B) was appropriate because it said that for the purpose of holding facilitating or managing the investments of the fund a fund investment vehicle could be used and the guardians were allowed to exercise that power in respect of passive entities and in respect of any other entities only with the approval of the Minister of Finance.So to go beyond passive investments required the approval of the Minister of Finance. The Minister of Finance could come back and say: “Having thought about it I’m going to approve this for a class of non-passive investments.” Now because the Government is stripping out this provision it is actually departing further from the original intention which was to leave the guardians as a passive investor rather than an active manager.I do not know whether many people can remember as far back to the old superannuation fund that the Muldoon Government—Grant Robertson: Crashed.Hon DAVID PARKER: —crashed after the election; the Kirk fund that was designed by Roger Douglas. The advertisements that were used to knock over that particular attempt at decent New Zealand savings were Cossacks marching across the screen in cartoons because the Government through the Superannuation Fund was going to own and control so much of the New Zealand market place that it would somehow be communism in the way that these Cossacks were marching across the screen.Now what are these guys doing? They are allowing in a general sense the Superannuation Fund to become an active manager rather than a passive manager. I am looking forward to the day when we see Steven Joyce using his control of the media as he has through his old linkages to actually bring back those advertisements to advertise the fact that in this amendment—Iain Lees-Galloway: I want to see Steven Joyce in one of those advertisements.Hon DAVID PARKER: Well actually those people did not have much hair. They had furry hats but there was not much under them.So that is why the Labour Party is opposing the Minister’s amendment and I want to hear the justification as to why we should holus-bolus be allowing active management through these fund investment vehicles without the Minister of Finance keeping an eye on it because that is what is happening here. Of course I do not trust the Minister of Finance on this because he has got it wrong from the start. He called it a dog. He stood up in this Chamber and said that this should be opposed because it was a dog. I do not trust the Government because it has under-invested in the fund and we know because the Guardians of New Zealand Superannuation measures how much wealthier we would be in New Zealand if the Government had continued the contributions to the fund. I think I will leave it there—Hon Paula Bennett: Oh!Hon DAVID PARKER: Well actually the Minister in the chair now the Associate Minister of Finance who has now taken on finance roles—I would be very pleased for her to stand and say why we should allow the Guardians of New Zealand Superannuation to have this holus-bolus right to actively manage what was meant to be passively managed.