Tabuteau FletcherKIWIFUND BILLFirst ReadingFLETCHER TABUTEAU (NZ First): I move That the KiwiFund Bill be now read a first time. I nominate the Economic Development Science and Innovation Committee to consider the bill.Mr Assistant Speaker thank you for this exciting opportunity. I start by just acknowledging that I am perhaps one of the luckiest members in the House this being my third member's bill in three years. It is actually amazing. I do have a bad record because the other two were in Opposition. What I'm hoping is that the third time's a charm.I am lucky to have the opportunity to present this bill because it is timely that it has been drawn. I put it to the House that it is the time to take stock and identify opportunity in what I happily acknowledge is actually an exciting time in the KiwiSaver lifecycle. This bill asks industry experts to consider concerns made and identify optimisations in the KiwiSaver industry. That's simply what this bill asks for. It then asks the same experts to then consider the creation of a KiwiFund a true Government provider but there is no predetermination on that outcome.So I wish to start by acknowledging how far KiwiSaver has come in its short history. By one key measure KiwiSaver has been a roaring success. The scheme's goal of encouraging people into retirement savings schemes has exceeded expectation. Prior to its introduction just 16 percent of New Zealanders had a savings scheme for their retirement. By 2016 more than three-quarters of New Zealanders had a retirement savings scheme. But unfortunately the reason why this bill's timing is good for this House is that actual savings rates in New Zealand have not risen all that much. In fact they've remained very static over the same period and remain sad by international comparisons. Further unfortunately the words of Sir Michael Cullen have yet to be realised in their full context—he said at the time of the introduction of this If we save more we will no longer need to borrow so much from overseas to finance consumption and business expansion at home."New Zealand First believes that the KiwiFund proposition in this bill would ensure that these words are truly and fully realised. What we do know is that KiwiSaver has started to help people into their retirement. This will definitely continue to increase over time. It is a boon to individuals and a boon to the New Zealand economy although as I will touch on later there is much more to do in this space. We know there has been no change or next to no change in the average fee charged since 2012. The fee structure has remained very much static and this has been much of a driver behind this bill. So when we take that into consideration simple extrapolation would tell us that in 20 years—yes a long time from now—unless something's done unless we look at it now the total fees charged in that time will have been over $12 billion. Two years after that—only two years after that—the same sum total exceeds $20 billion. That is a huge amount of money being taken out of the savings of New Zealanders' retirement programmes for fees and whatnot; $20 billion in total and in those two years an $8 billion difference.Then there are the individual examples. It has to be based on some very broad assumptions but current analysis highlights that a typical savings scheme for a person's retirement with a balance of half a million dollars at maturity would have paid almost $100000 in fees at a similar rate on offer today. So providers came to us and said—well not all providers actually; some providers said "Well actually a higher fee rate means a higher level of interaction with the client. It's a managed fund we're doing more for the people who have chosen to invest with us." But I put it to this House as I put it to those who came and spoke to me—and I thank them for it—that nearly 95 percent of New Zealanders with a KiwiSaver account are still with their default provider. But nothing's changed so what is the real level of interaction? So 95 percent are still with their default provider and even more unfortunately those same people are in their same investment scheme and have obviously given no consideration to their risk profile. People don't know the terminology. They don't understand that they can change the nature of their investment to best match their risk profile at this stage of life. They do not understand the implications of this in their savings life cycle and are missing out on maximising their returns. Simply put in the end they will have less money when their KiwiSaver finally pays out. With what would likely be lower fees more of that money can be used for growing investment returns; hopefully putting more money back into the pockets of KiwiFund investors which is what this bill seeks to achieve. KiwiSaver fees despite an exponential growth in funds under management are doing well and some providers are doing really well. The management fee structure hasn't changed since 2012 like I said on average. We know by contrast that the fees for the New Zealand Superannuation Fund a fantastic scheme which was looked at this morning by the Finance and Expenditure Committee dropped substantially to the clientele who invest on behalf of the Superannuation Fund—from 0.7 to 0.1 as a very clear measure. Around the world we looked at examples and saw the same phenomenon. For investors as that capacity grows as their ability to leverage scale increases their fee structure comes down and I put it to this House that that has not happened in New Zealand.I appreciate that saying all fees are too high is too simplistic but this bill does not determine that all fees are too high. Rather this is an opportunity to take stock pause and acknowledge that this country is sitting on a figurative time bomb where billions of dollars per annum will not be returned to New Zealanders in their retirement schemes will not be spent in New Zealand and will not help grow the New Zealand economy. Rather unfortunately the majority of those moneys will be heading overseas.The transparency requirements supposedly already set are according to some large industry players insufficient. So some of the players in the industry themselves acknowledge that they themselves are not sure about the transparency requirements within the current legislation. They say that some others—not all—are not playing ball and customers are still not fully aware of just what they are paying for and how this affects their returns.I've said it and I'll say it again: this bill has been drawn at just the right time. We know that the providers have gone beyond their initial start-up. They shouldn't be claiming recovery of start-up costs at the moment; they've gone beyond that. So let's have a look at that. We seek to look at accountability at transparency. New Zealanders have made some very serious complaints in the past and this is what we want to address around fees transparency ethical investments and just what they're getting for their money.New Zealand First unashamedly wants a new provider to be established. This would be known as KiwiFund and New Zealand history is on our side in fact. Kiwibank tells the story of determination and of conviction. Everyone in this House knows that Kiwibank was the right thing to do. The KiwiFund would be the right course of action for New Zealanders. They would see good returns a low fee structure and ethical investment with preferential treatment given to investment here in New Zealand and with that Sir Michael Cullen's words would come true.A KiwiFund would also mean a focus on investment back into New Zealand. I put it to this House that that is very much complementary to the Provincial Growth Fund that this coalition Government is very much championing and as the Minister said has gone ahead leaps and bounds. It would be complementary to that in an independent manner. But it's all about investing in New Zealand and allowing New Zealanders to choose to save their money with a provider that would focus on investment in New Zealand.So it is with extreme pleasure that I put this bill to the House. It's an exciting time for this country and I am absolutely proud to be a small part of it. Thank you."