Cunliffe David: New Zealand Superannuation and Retirement Income Amendment Bill — In CommitteeText is incorporated into the Bound VolumeCunliffe David: New Zealand Superannuation and Retirement Income Amendment Bill — In Committee[Sitting date: 30 June 2015. Volume:707;Page:4903. Text is incorporated into the Bound Volume.]Hon DAVID CUNLIFFE (Labour—New Lynn):Labour supports the New Zealand Superannuation and Retirement Income Amendment Bill. This is one of those little bills that make a fairly minor change. It provides for the Guardians of New Zealand Superannuation to be able to be exempted from liability as they take on the management of passive or active investment vehicles and it complements the portfolio investment approach so successfully undertaken by the fund to date.This bill does throw us back however on the why the what and the how of the New Zealand Superannuation Fund. Now it is commonly accepted by members across the House. This was an initiative of the previous Labour Government and the then finance Minister Dr Michael Cullen. It has been in anybody’s book a spectacular success—a spectacular success. Recent returns averaging around 20 percent per annum is unbelievable for a fund of that size. Average return since inception: 10.3 percent. Cost of Crown capital: around about 4 percent. This is an extraordinary win for every New Zealander because it means that we will be paying less in our taxes to support Kiwis in their retirement because of the prudent investments the spectacular investments that have been made in this fund.What did National do? National stopped contributing. National is such a party of short-sightedness that when times got at all tough it stole from the future to bail itself out in the present. And independent advice confirms that that bad decision has cost New Zealand taxpayers—wait for it—over $10 billion in lost profit; $10 billion. And I am taking the conservative numbers. The bottom end of the range is at least $10 billion. So here is the question members. Members across the Chamber: can any member tell me a single worse financial decision in the history of New Zealand Government? Can anybody tell me a decision by a Minister of Finance that has cost more—Iain Lees-Galloway: Scrapping the Kirk superannuation.Hon DAVID CUNLIFFE: OK I agree with you actually my two colleagues—you have topped this one. And it was Rob Muldoon—this is the worst decision since Rob Muldoon killed the last great superannuation scheme. Fortunately National did not quite kill this one; it just stunned it. But that stun gun cost $10 billion and here we are back now trying to get this back on its feet.Now we agree with this limited bill. It simply provides for the independent guardians of the fund to have a little more liability protection to cover a slightly broader range of passive and potentially active investment vehicles. Reasonably unexceptional provided that the structure of governance of the fund holds true and that is as designed by Michael Cullen: a double-blind system where the Government has a hands-off role in appointing the guardians who are then by law completely independent of Government policy so there is no way any Minister of Finance or any other Minister could possibly influence the investment decisions of the fund. Nobody told John Key because he campaigned on breaking the law. He campaigned on twisting the arms of the guardians so that they would put a certain amount in certain different asset classes. However in New Zealand—and of course we want to see more stuff going into New Zealand but that is not the point. The point was that really the Government needed a law change to do that and it did not bring it back to Parliament.Is that governance model still valid? Is it still worthy? Of course it is. Is the aim of the fund which is to smooth the cost of financing superannuation for our children and our grandchildren still valuable? Yes it is. Is the fund successful? Yes it is. It is incredibly successful: 19 percent return over the last few years 10.5 percent since inception more than double the average cost of the Government’s own borrowing. This is a spectacular success.I think this debate points us to a deeper truth: Labour does long-sighted change; National manages from day to day. So that is why the public of New Zealand say: “Oh yeah she’ll be right. Things are going OK can have that lot back again.” But whenever New Zealand is up against it whenever New Zealand has challenges to rise to New Zealanders vote for a Labour-led Government because they know that we have the far-sightedness and the insight to achieve major change for New Zealand. We have done it in foreign policy with the anti-apartheid movement and the antinuclear movement. We have done it by carving out an independent role in foreign affairs which has now seen us appointed to the Security Council. We have seen it—Chris Bishop: Under a National-led Government.Hon DAVID CUNLIFFE: Oh OK. Those members say it happened under a National Government; so it did with the Labour Party’s support. But we would not be there if we were not seen as an honest broker and the reason we are there is because Labour Governments from Kirk onwards have championed our independence. But back to the bill Mr Chair.The CHAIRPERSON (Hon Chester Borrows): Oh thank you.Hon DAVID CUNLIFFE: Thank you. I knew you were going to drag me back so I thought I would get in first Mr Chair.The CHAIRPERSON (Hon Chester Borrows): I was distracted by the humour.Hon DAVID CUNLIFFE: So this superannuation bill tells us something very very important about Labour-led Governments: we do change. We do major change that results in New Zealand being better off. What is the problem at the moment? Those clowns on the Government benches have been happy to follow along behind dairy prices the earthquake rebuild and a housing bubble and they think that is an economic strategy. That makes about as much sense as not paying into the New Zealand Superannuation Fund. It is policy that reinforces old advantage and does nothing to create new advantage and the smart jobs of the future.So we support this bill because this allows the fund to play a greater role in the smart jobs of the future by investing actively in New Zealand businesses. But if the Government is going to do this why will it not touch the tax system? Why will it not touch the banking rules so that we get more capital where it will do the most good creating jobs around our regions? Why is it just reinforcing traditional agriculture and giving foreign banks a free rein? Why will it not address the core problems that we all know are hamstringing the New Zealand economy? Well it does not have either the vision or the courage to get us there. And New Zealanders as they see Greece up against the wall as they see dairy prices going down the toilet as they see Christchurch starting to stutter and as they see the Auckland property bubble ready to burst are rapidly coming to the conclusion—the feedback we are getting is—that it is time for a change. The tipping point is coming—the tipping point is coming. The tipping point is coming and the same far-sighted courage that brought a 20 percent return to the New Zealand Superannuation Fund will be available to future generations of New Zealanders because the same team that brought New Zealand the Superannuation Fund can bring them the next generation of positive policies for the future.