Parker DavidVENTURE CAPITAL FUND BILLInstruction to Finance and Expenditure CommitteeHon DAVID PARKER (Associate Minister of Finance): I move That the Venture Capital Fund Bill be reported to the House by Monday 2 December 2019 and that the committee have authority to meet at any time while the House is sitting (except during oral questions) during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House and outside the Wellington area despite Standing Orders 191 193 and 194(1)(b) and (c). I would just ask if I could just have an indication from the Clerk that I've correctly read the motion? Thank you. I want to explain why the Government thinks it is appropriate to shorten the period. It's essentially because we want the capital to flow to this sector and we think that delays aren't in the interests of the country. We did consider producing this legislation during the Budget itself and introducing Budget night legislation in which we considered whether we should push through all stages under urgency as part of the Budget legislation. We chose not to do that because although at one level it's a relatively simple bill we thought that it was appropriate to consult in more detail with the guardians of the New Zealand Superannuation Fund with the Venture Investment Fund and with the venture capital (VC) industry. In the time since 30 May that's what we've done. So there's already been considerable pre-consultation with the industry that's affected the VC fund management industry but also with the guardians of the super fund and the New Zealand Venture Investment Fund. I can give an illustration of the need for this to happen quickly. I was at a meeting with a number of VC fund managers and a person with a long track record in these funds gave the example of his own involvement in five Wellington-based IT firms all of which have a funding need—what you'd call a series A round—that needs about $1 million each. Contrary to what other members said it's not easy to access that money in respect of these start-up ventures. You can't access public funds because of the directorial risk for making a public offering. As a consequence of that you either have to choose between competent directors if you're getting an external director or non-public methods of fund-raising. In addition the costs of accessing public markets have gone up because of the complex prospectus processes that we have now in New Zealand. So you're effectively driven to private equity sources and private equity is easy enough to get—ASSISTANT SPEAKER (Adrian Rurawhe): Can I just—sorry to interrupt the Minister but it's actually a very narrow debate on—Hon DAVID PARKER: Well it's the reason for the urgency sir. These funding needs are real. ASSISTANT SPEAKER (Adrian Rurawhe): I'm just indicating to the Minister that if he's creating debating points then that will extend the debate so he needs to be quite concise and to the point. Hon DAVID PARKER: Thank you. The other reason I would say is that you never know when you're going to have a liquidity event in the world. New Zealand encountered a liquidity event in 2008 at which point capital markets stopped to function and our VC industry and a lot of things that were good actually went on the shelf then for a while. Now there are some clouds on the horizon internationally and it could be that the co-funding that we want to get for these matched funds is less likely to be available from international and New Zealand markets in a year than it is now. None of us know when these liquidity events can change quickly from being available to being a lot more closed. So although none of us can predict that future that's another reason to do this promptly. So we think given the nature of the bill that the period ending 2 December 2019 is a reasonable one to request of the select committee and we think that they will be able to meet that date in a way that's not unreasonable.