Genter Julie Anne: New Zealand Superannuation and Retirement Income Amendment Bill Taxation (New Zealand Superannuation and Retirement Income) Bill — Third ReadingsText is incorporated into the Bound VolumeGenter Julie Anne: New Zealand Superannuation and Retirement Income Amendment Bill Taxation (New Zealand Superannuation and Retirement Income) Bill — Third Readings[Sitting date: 20 October 2015. Volume:709;Page:7371. Text is incorporated into the Bound Volume.]JULIE ANNE GENTER (Green): I rise to speak on the third reading of the New Zealand Superannuation and Retirement Income Amendment Bill. I would like to start my remarks on this bill by stating that the Green Party has always supported the New Zealand Superannuation Fund. In fact we contributed votes that allowed the legislation that set up the fund to pass back in the day and the Green Party was very supportive of the New Zealand Superannuation Fund being at arm’s length from Government—that the decisions made about where to make investments would be at arm’s length from politicians. We think that is best practice although we did also think that it was incredibly important that there was a responsible investment clause if you are going to be investing money for the future—and the whole reason it was set up was not to be a permanent sovereign wealth fund but to be a temporary investment. It might end up being a permanent sovereign wealth fund at some point but it was a temporary investment and we thought it was prudent because the Government was running large surpluses to start to prepay some of the large costs that we knew we were going to incur when the baby boomers hit retirement age. It will not pay for most of it but it will deal with some of the costs that are going to come down the track in the 2030s—possibly before then.So we thought if one is going to invest money for the future it is important that we have some rules around how those investments are made. I think everybody agrees that there are certain industries that are not ethical to invest in things like cluster munitions for example tobacco possibly and of course fossil fuels. It is becoming a huge debate right now about whether or not fossil fuels are an ethical investment because we know that there is a limit to the extent to which we can burn the fossil fuels that we know that we hold in reserve and maintain a stable climate that is going to enable future generations to live good lives on this planet. But there is also the question of whether or not it is going to be a smart investment because there is a lot of research coming out a lot of statements being made by for example the World Bank the OECD the International Energy Agency the United Nations and many others which are saying that the majority of discovered fossil fuel reserves need to stay in the ground if we are going to avoid warming by 2 degrees Celsius. As a species we cannot afford to burn the existing fossil fuels that have been discovered. So those companies whose major assets are fossil fuel reserves are part of a carbon bubble and in the future they could be stranded assets. Of course they are tremendously overvalued because the risk of the world coming to an agreement and limiting the rate at which fossil fuels can be burned has not been accurately priced. So for the fund to be investing in those companies is not only bad morally because it is supporting fossil fuel production and out-of-control climate change is immoral but also a bad investment because it means that when the carbon bubble finally does pop and collapse we would lose money on those investments.At the time we were not able to negotiate as strong a responsible investment clause as we would have liked but I do think that the fund has tried to work within a responsible investment framework. Recently when I was talking to the Guardians of New Zealand Superannuation they spoke to me about their interest in clean-energy investment. They have allocated a certain amount of money which has been earmarked for investment in clean energy because that is the future and they are trying to work with their existing investments in fossil fuel companies and to work with a lot of the different investments to get better accounting around carbon budgeting and carbon accounting. All of that is going to enable them to make more intelligent investments although I have to say that it is the fund leading on this; not the Government. Of course it could have been the Government if it had any vision and it acknowledged the reality of climate change which so far I do not think it has really acknowledged.But of course even though we support very strongly the New Zealand Superannuation Fund and a lot of the work it is doing and we think it has engaged respectfully with us when we have questioned some of its investments and it has got rid of some of the more questionable investments and is working to deal with the carbon bubble and to invest in clean energy this particular bill we cannot support. We did think about it. We discussed it at some length but what this bill does is it makes it even easier for the fund to be invested in what are called fund investment vehicles and of course a large proportion of those are domiciled in countries that are known to be tax havens. So we asked some written questions and did some research back in 2013 that demonstrated that the Superannuation Fund had $1.6 billion or 7 percent of its funds invested through these investment vehicles which were located in tax havens like the Cayman Islands the Isle of Man the British Virgin Islands and Mauritius. We do not think that it is good practice for New Zealand to be investing money through these vehicles. The Government is saying that it is going to result in tax efficiency for the New Zealand taxpayer but effectively that is because we are supporting tax havens and avoiding tax.That is not a responsible course of action for New Zealand especially at a time when the New Zealand Government and the OECD are trying to run a global campaign to protect sovereign countries’ ability to have workable tax law because the existence of tax havens creates a situation in which it becomes very difficult for countries to regulate and set up tax laws that will be effective. You have large multinational corporations effectively completely avoiding tax because they have the resources available to set up in tax havens. It creates a bit of a race to the bottom where all countries are then under pressure to cut tax rates in a way that is unsustainable fiscally and economically for those countries. We in New Zealand are working to contribute to this global project of reducing tax avoidance yet at the same time we are passing legislation that is going to make it easier for our Superannuation Fund to use tax havens to avoid paying tax.The Green Party does not feel that that it an ethical approach to investment. We do not think it is constructive. We are not being a good global player when we are not acknowledging the existence of tax havens and that is what these fund investment vehicles are largely doing. So although we support the independence of the Superannuation Fund and we support the existence of it and we support good governance with parliaments and politicians in Government being at arm’s length from decisions made about where to invest the funds we also think it is the role of Parliament to set some ground rules and say we are going to have ethical investment and we are going to ensure that we are not using our money to invest in things like cluster munitions tobacco and other arms. We would like to see a policy of divestment from fossil fuels because not only is that essential for life on this planet for our children and our grandchildren but also is simply going to be a bad investment. It is already a bad investment.The same goes for employing tax havens. We would like to see the Superannuation Fund no longer investing in any fund investment vehicles that are located in tax havens. It does not matter whether it looks like it is going to be a good investment if the reason it is a good investment is that it is undermining global governance and the ability of sovereign nations to protect their tax base and for there to be an effective regulatory and tax regime around the globe. So as much as the Green Party supports the New Zealand Superannuation Fund and thinks that in general terms it is doing a very good job we will not be supporting this legislation.