Stephenson ToddNEW ZEALAND SUPERANNUATION AND RETIREMENT INCOME (CONTROLLING INTERESTS) AMENDMENT BILLSecond ReadingDebate resumed from 11 April.TODD STEPHENSON (ACT): Thank you Madam Speaker. I rise to speak on behalf of ACT on the New Zealand Superannuation and Retirement Income (Controlling Interests) Amendment Bill. It's getting late in the evening but this is an important bill and superannuation is an important topic. This bill seeks to make some changes to really the arrangements around the New Zealand Superannuation Fund and allow it to take a controlling interest when making investments.Now this fund was established in 2001 as I'm sure many members of the House know and at that time actually sovereign super funds taking a controlling interest was somewhat unusual and actually not best practice. However times have moved on and this change we think will allow the Superannuation Fund to make some more strategic investments and hopefully support our economy and also New Zealanders. The fund actually since its inception has actually done amazing in actually doing returns—almost 10 percent since its inception and if people—Hon Tama Potaka: Wonderful work; wonderful place.TODD STEPHENSON: Yes thank you Minister Potaka.If you are following the global superannuation returns you would know that that's a very good return over time and so we should all be proud of that. In fact the fund at the moment stands at around NZ$73 billion.This amendment bill was first considered in the last Parliament the 53rd Parliament by the Finance and Expenditure Committee a committee that I now sit on but that in the last Parliament my former colleague from ACT Damien Smith sat on and that also was chaired by Ingrid Leary from the Labour Party. They have obviously returned a report on behalf of that select committee looking at some of the issues related to this bill and making sure that actually we were doing the right thing in allowing the New Zealand Superannuation Fund Guardians to take a controlling interest in investment entities.I was heartened actually when the Minister made a speech in the second reading when she was introducing this bill. She did note that these investments need to be made on a commercial basis and that really is very important from ACT's perspective. We do not want this very substantial Superannuation Fund making investments that aren't commercially sound and don't continue to support the impressive returns that I talked about—some almost 10 percent over the course of the fund.And I do note that the select committee in doing their work diligently did look at some of these issues like the risk and benefits of removing this restriction on controlling interests. And they did note however that by removing the restriction it would actually allow the Superannuation Fund Guardians to use simpler ownership structures in making these investments and also take fuller opportunity of investments as they come up. So really a controlling interest means that the fund would be able to make a substantial investment and then actually control that entity which is delivering returns to the fund.I also note some of their other concerns were just ensuring this kind of arm's length—basically weighing up the risks and benefits and making sure that the Guardians who actually are the ones making the investment decisions do continue to use a prudent approach to investments and aren't doing anything risky. But it was felt that being able to change this restriction would actually be beneficial to the Guardians in that role of making prudent investments and that they would continue to do that with diligence.Finally I would just like to say that Treasury again looked at this and has made some comments that they think there is a sound policy rationale for doing this. And as I also said at the outset I think that giving this flexibility to the Guardians when making investments also will allow them to open up new opportunities which again can support our economy and this Government's agenda of growing New Zealand and making some strategic investments—hopefully in the area of infrastructure since we all would probably recognise in this House that we have a serious infrastructure deficit. And I think if this fund can be used in a sensible way to support New Zealand's infrastructure needs by making these kinds of strategic investments where they may have a controlling interest I think that is a benefit to all.So I would like to commend this bill to the House on behalf of ACT and I look forward to hearing others' contributions. Thank you.