Parker DavidVENTURE CAPITAL FUND BILLNEW ZEALAND SUPERANNUATION AND RETIREMENT INCOME AMENDMENT BILLThird ReadingsHon DAVID PARKER (Associate Minister of Finance): I move That the Venture Capital Fund Bill and the New Zealand Superannuation and Retirement Income Amendment Bill be now read a third time. Can I also pass on my thanks as Mr Speaker has already to the prior speakers and also give my best regards to those who are adversely affected.This bill puts in place a key element of the Wellbeing Budget economic package. I've said earlier in the debate on this bill that I think the timing of this is very important. The world is in the midst of this technological revolution which is born of this confluence of affordable computing power mobile positioning systems sensors robotics big data and the internet of things artificial intelligence and I'd add to that a better understanding of genetics. We know that the enormity of these changes is such that Governments around the world including in New Zealand are having to deal with the challenges that this throws up. We do that in New Zealand under the banner of the future of work. The fact that we've got to have a separate programme for that in Government shows the enormity of the change on the way. I think the estimate from McKinsey is that in the next 20 to 30 years about 60 percent of the jobs in New Zealand could theoretically be automated and that in reality around 30 percent will be. The enormity of that change I think measures the size of the opportunity because the flipside of the challenge is the enormous business opportunity that arises from these opportunities to improve the efficiency of existing methods of production or the opportunities to commercialise new products and services that are born of this revolution. I think it's the duty of every Government in the world to do their utmost to get their share of the upside in the world and in New Zealand the Government thinks that we should be doing that so that we can harness those opportunities and obtain these new high-value jobs and the export value that this creates. We know that too many of our high-growth early-stage companies struggle to access capital. Some of them are well funded but the conversion rate of our early-stage ventures to high-growth companies is lower than international countries that we compare ourselves to. We think this is in no small part caused by a shortage of available capital in series A and B capital rounds. Earlier in the growth of these new tech companies they had good support from the seed capital part of the market. In part that's been brought about by the Seed Co-investment Fund which is another fund run by the Venture Investment Fund directors—that in itself has been supported by Government intervention. I think we should reflect on how well we're doing as a country in this area of the economy. If you go back 20 years we didn't have this sort of economy to any great extent. Of course we had Gallagher group and other technology companies like Fisher & Paykel Healthcare—they had already started their journey—but this ecosystem was a lot smaller. The prior Labour Government under Helen Clark held the knowledge wave conference and there was general agreement that we needed to lift the diversity and value of what it is that we were offering to the rest of the world and they identified the need for some interventions. They chose three sectors in particular: creative sectors biotechnology and information and communication technology—ICT. They chose the right three sectors. The subsequent National Government morphed the biotech more towards food and beverage and I think that was a wise thing to do. As a consequence these technology exports are now one of our highest growing export centres—third after primary products and tourism. We can do even better if we get this ecosystem working better at the series A and series B capital funds. Three hundred million dollars is going into the fund over time. This will be leveraged by investments from the private sector so that the amount that is going into these early stage ventures will be more than $300 million. We're trying to build the capability in the sector at the same time as we better capitalise the companies that are going to have investments made in them. We think that we are going to help develop the domestic and international networks that we need and that alongside the R & D tax credit the ring-fencing of losses and extending the brightline test this is another part of the Government's economic package that really is helping weight investment towards the productive sectors in a way that we think is going to lift economic performance and productivity more broadly across the economy. It does that in part because these companies also have the effect of enabling diffusion of technology more broadly across the economy in a way that lifts productivity. One of the complaints I've heard from the Opposition is the relative performance of our export sector compared with domestic consumption. They point that out as if it is a bad thing; actually I think it's a good thing. We've had an economy that for too long has been weighted upon consumption which has had its underpinnings in high rates of immigration in gendered population growth and in a house property price bubble that has made people feel wealthy and therefore they have consumed their equity in their houses. It does take a while to rebalance the economy towards an export-led recovery but we're actually doing that. Exports as a percentage of GDP are on the way up and we are seeing a balance away from an excessive reliance on speculative investment in the housing sector.Chris Bishop: Really? Hon DAVID PARKER: Yes we are; the stats show that most clearly. Now in respect of the framework for governance here we have the Guardians of New Zealand Superannuation helping set up the structures which lead to the choice of private sector venture capitalists who run the funds that invest the money in the companies that we want to grow. The Venture Investment Fund administers that on a day-to-day basis on behalf of the Guardians so I think we're using the capability that we've got in the sector to best effect. There is a policy statement that can be changed from time to time and that's intended to get the balance right between international involvement and local providers. We actually need both but we don't want it to become completely dominated by overseas participants because we are wanting to build the New Zealand ecosystem as well. The second to last point I would make would be to respond to a complaint that was made by the National Party during the second reading which was complaining that this money's coming via money that would otherwise have gone to the New Zealand Superannuation Fund for them to invest directly. I would point out the hollowness of that criticism given that in their nine years of Government they made no contributions to the Superannuation Fund. They actually gathered $5 billion in tax from the Superannuation Fund but made no contribution to it. We of course are making contributions of around $2 billion per annum and we are building the Superannuation Fund at the same time as we think it's appropriate to divert some of the money into this fund. We think as a consequence that the productivity of New Zealand will grow and that we will have higher export earnings higher wages and interesting jobs for people to go to. This is one way we can futureproof our economy in respect of these changes that are coming from those technologies that I mentioned at the start. Lastly can I thank Government officials for the work that they have put into this. Can I thank the Finance and Expenditure Committee. It's good that we've got almost universal support for this bill in the House. Can I thank the many participants from the private sector who have already—even before we announced this policy—given us advice as to how we might best structure this and I think we've struck on an outcome which will prove to be a wise investment for the country. Thank you.