Clark David: New Zealand Superannuation and Retirement Income Amendment Bill — Second ReadingText is incorporated into the Bound VolumeClark David: New Zealand Superannuation and Retirement Income Amendment Bill — Second Reading[Sitting date: 07 May 2015. Volume:705;Page:3322. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North):Well that was high praise from the National Party list member from the Hutt Chris Bishop for Michael Cullen’s good work in setting up the Cullen fund. The way it rolled off the tongue was most impressive. It was like reading Paul Goldsmith’s biography on John Banks. It was effusive the praise was forthcoming—only in this case it was well due.Hon David Parker: Bill English called it a dog.Dr DAVID CLARK: Well we know that Bill English called the Cullen fund a dog of course. He has changed his tune and there should be some credit there for having the wisdom to recognise good ideas eventually even if the Government does not have any of its own and even if it is a Government that is getting a little tired and even if Bill English when challenged today in Parliament to come up with one new idea could not. I credit that member Chris Bishop for acknowledging that this has been a very very successful fund. The Cullen fund changes that are proposed are to the fund investment vehicles as we have heard and those changes are consistent with the mandate for the fund. So it is not a huge change; it is a change that is in tune with what was intended when the fund was set up in 2003 and it is a change that is welcomed by both sides of the House.The member is quite right—we did have some extensive conversations in the Finance and Expenditure Committee about the New Zealand Superannuation and Retirement Income Amendment Bill. We sought plenty of information from officials they were forthcoming and we had some really quality interactions. We debated at length whether or not the Official Information Act provisions should apply and sought information on that. We were convinced in the end that it may dissuade private investors from investing in the fund if they were subject to the Official Information Act investment vehicles for a variety of reasons that were then hammered out because you need to dig beneath the surface to discover whether that is really true and what the reasons are. We were convinced in the end that the governance arrangements for the Guardians of New Zealand Superannuation themselves would provide enough transparency for the public. The guardians have to show that they are comfortable with the governance arrangements of the fund investment vehicles they can appoint the people who are going to be in charge of them and they are then responsible for those appointments. They are responsible for the general purpose of the fund investment vehicles obviously and all of that information can be made available to the public in so far as it is not commercially sensitive.So as a committee we did spend quite a lot of time on this bill. The folks at home should know that often those select committees do an awful lot of work that makes the legislation better. It comes to the House and we end up agreeing. It does not make headlines when that happens but it is actually probably some of the more important work that we do in this Parliament. I also want to acknowledge the constructive way in which the whole select committee worked together to ensure that this bill will be progressed and be a useful one. We are all concerned of course that New Zealanders can live with dignity in retirement and that they can have security in the longer term knowing that this fund is there to help pay for our future retirements as a country.We do though have to acknowledge the history here however because National itself opposed the introduction of the Cullen fund originally. It said that New Zealand could not afford it. That was its argument then—that New Zealand could not afford this fund. That was when Labour ran nine surpluses in a row when it was in Government. That contrasts of course with the zero surpluses this Government has delivered in 7 years. These are the facts. So this Government opposed the Cullen fund and said that we could not afford it but then went on to make changes to the tax regime that saw over 40 percent of the tax cuts it gave go the top 10 percent of earners in New Zealand while the bottom 20 percent got just 10 percent of the tax cuts by value and that was swallowed up in a GST increase. John Key changed his tune. Having promised not to increase GST when he was campaigning he then went about changing GST. And many New Zealanders will think back to that broken promise as we come up to the current Budget where we are about to witness another broken promise in the form of a surplus that will not be delivered. Of course contributions to the Superannuation Fund were to be resumed when the surplus was delivered. That promise was made too and it looks like it is also about to be broken by this Government.This Government used to be a Government that made many promises looked forward and said to New Zealanders: “We will give you hope.” “We are ambitious for New Zealand.” was the phrase. Unfortunately it now looks tired and out of touch and in fact we hear more excuses than anything else. We have heard a lot of explaining from Bill English over recent weeks as to why he not only will not make surplus this year as promised and as campaigned on—the most important thing in the National Party’s campaign—but cannot promise that it will happen the year after either any more. This is a Government that unfortunately is coming apart at the seams. It seems to have no new ideas as to how to get to surplus. It has a Business Growth Agenda that actually has a target of increasing exports as a proportion of our economy from 30 percent to 40 percent but that percentage is going backwards. It is now below 30 percent and going backwards. This is a Government that is not only failing to deliver on its promises but failing to produce a vision for the future that is convincing and that is actually going to take the country forward and generate the wealth that we know is needed to top up the likes of the Cullen fund to ensure that we can live in secure retirement. If this Government does not do that New Zealanders are going to be a lot worse off in the future.So we on this side of the House are concerned that this bill gets through. We will approve the minor amendments apart from a Supplementary Order Paper that we reserve judgment on having just heard about it from Bill English. It is an interesting prospect that he is bringing to the House—that he will not have oversight of these fund investment vehicles. That was one of the checks and balances that the select committee thought could be put in place—having the Minister of Finance sign those off probably in a largely perfunctory fashion to say that he is comfortable with them because he is in a position of oversight of the whole of the Superannuation Fund. If the Minister of Finance signs it off that gives the public confidence that it has been done with due process and that there is a check in place. By moving a Supplementary Order Paper to rid himself of that public responsibility the Minister is taking a serious step that we will need to examine a little more fully. We will need to see the logic and exactly what that will mean. That is the one part where we are reserving judgment. The Supplementary Order Paper has come as a surprise today to the House.But as I have said we will be supporting the bill. We know that in the Western World the fund is a model of what can be achieved. It has had returns that have averaged over 10 percent per annum since it was set up in 2003 which is a fantastic return. In fact in 2014 it returned 13.89 percent on its investments and that is around $5.6 billion worth of value that it has added to New Zealand’s retirement savings. Even in 2013 the year of the last calculation that I have seen from the Superannuation Fund it estimated that $10 billion had been forgone from the lack of contributions made by the Government because again it said that we could not afford it.This is a Government that cannot see an opportunity when it is staring it in the face. These returns from this fund are well worth investing in. Unfortunately this Government seems more concerned with funding tax cuts for the wealthiest New Zealanders while middle New Zealand is missing out real wages are stagnant and ordinary folks who go to work every day are struggling to make ends meet. We have seen that small business creation is well down on what it used to be. All of these things are hitting New Zealand hard particularly when we are also facing a drop in commodity prices. The failure of the Government to diversify the economy is having a very real cost and one of the costs that we are seeing is its failure again to re-engage in investing in this fund to bring the returns that are intergenerational that create an sustainable economy and that we know we need in this country. The Government has failed to achieve its surplus target which it campaigned on. Labour had nine surpluses.This is a sensible policy—one of the few—and we will support the bill through to the next stage. Thank you very much.