New Zealand Superannuation and Retirement Income Amendment Bill, Taxation (New Zealand Superannuation and Retirement Income) Bill

I move, That the New Zealand Superannuation and Retirement Income Amendment Bill and the Taxation (New Zealand Superannuation and Retirement Income) Bill be now read a third time. This bill has taken a while, actually, to get to the point where we are completing the process, but it is pretty important, probably as much for what it does not do as for what it does do. This relates to the New Zealand Superannuation Fund and what it is allowed to do under the 2001 Act. I think, as I said in the second reading of this bill, the New Zealand Superannuation Fund was set up in a way that was fundamentally sound, and Dr Michael Cullen deserves credit for that. It was set up in order to retain and maintain its political independence, because of the basic insight that a multibillion-dollar fund—now $27 billion—could look attractive to politicians who have their own objectives in mind rather than the very long-term objectives of this fund, which are to help offset the cost of national superannuation through the 2020s, 2030s, 2040s, and into the 2050s. It was set up with that degree of independence, and that is something that I think this House must pay attention to—and I will come back to why that is relevant in just a minute.

One of the restrictions on the fund is that it cannot take a controlling interest in any entity. This is simply to prevent what is already a large fund from running a whole lot of businesses, and my own view is that that would not be good for the economy because a Government-controlled fund cannot really go out of business. It would not have the right incentives to improve the performance of businesses that it owned by majority. There may not be much test of the management of those businesses, so, quite reasonably, the House has had a position now for 15 years that it should not own businesses in its own right, but that it can own part of pretty much any business in New Zealand and overseas. The issue here is that, as it diversifies its portfolio around the globe, and by far the bulk of its investment is offshore—that is, we take money that was taxpayers’ money, it goes through the Government into the fund, and then it is invested offshore. In recent years there has not been any of that, but the fund has been making healthy returns on its investments and reinvesting those returns.

In the modern world of funds management, investment entities are set up, and, in this legislation, these are referred to as fund investment vehicles. So the bill has a very specific purpose, which is to say that although the fund is not allowed to own any particular business in majority, it can have a controlling interest over an entity set up just for the purposes of managing investments—just for the purposes of managing investments. The intent of this is to reduce some of the costs that the fund now incurs. Where we can reduce its costs, we increase its returns, and, over the 30, 40, or 50 year life of the fund, that could have a big impact on the fund’s performance—a significant impact. Just in the same way as when you look at a KiwiSaver fund and look at fees of 1.5 percent when the returns are 5 or 6 percent or less, a small reduction in those fees has a significant influence on the returns to the fund. The bill provides the guardians with some added flexibility around how they implement their investment strategy.

There is also the companion bill, the Taxation (New Zealand Superannuation and Retirement Income) Bill, which provides for the taxation of fund investment vehicles in the same way as current taxation of the fund as a whole. The Greens seem to interpret this as enabling the New Zealand Superannuation Fund, wholly owned by the New Zealand Government, to use these new fund investment vehicles as some way of indulging in behaviour around tax havens. We want to be pretty clear that this bill does not change any of the investment universe available to the guardians or its current approach to tax; they will have to comply with tax law wherever they invest in the future—the same way as they do now—and I am satisfied that the arrangements are the right ones.

On the way through the process, there was really only one point of discussion, and that is whether the Minister of Finance should approve the fund investment vehicles. As someone who has had a little bit of experience in that job, it is certainly my strong view that the Minister of Finance should not be involved in any way in the investment decisions of the fund, even if it looks like it is going to be a fairly technical intervention. In my view, it is much better that all those investment decisions are completely at arm’s length from the politicians. And, as it happens, on the way through Parliament, the House has come to the view that that is probably the best way to manage it.

There is always an argument at the margin for the politician to somehow get involved in a way that might enable the officials to have a bit more oversight of this fund or to make a small adjustment at the margin, but, in my view, any move in that direction will simply compound itself on another move in that direction, and before long you could have some real problems of political interference in the operation of the fund. There are legitimate issues for the Government, which we are doing a bit of work on, and one is that the fund takes risk with investments. We know that, because it has been making 20-plus percent returns in some years. You do that only by taking risks. But the Government has to satisfy itself that it understands what risks are being taken and that they are broadly acceptable on the Crown balance sheet, and that is a matter of some ongoing consideration by Treasury. Can I thank both the House and the Finance and Expenditure Committee for dealing with a pretty pragmatic bill designed to slightly reinforce what we hope will be the long-term success of the New Zealand Superannuation Fund.

We in Labour support this bill. We support it wholeheartedly, in that we believe that any improvements to the New Zealand Superannuation Fund, or what is colloquially called the Cullen fund, as set up by the Hon Dr Michael Cullen, are to be applauded.

I do take on what the Minister of Finance said in terms of the independence of the fund. When it was set up and the Guardians of New Zealand Superannuation were put in place by Dr Michael Cullen, one of the key features was that independence, and not only that, but there was a requirement—and it may seem self-evident to some—for the fund to invest according to world’s best practice. There has been, from time to time, political pressure from some parties that would like to designate, rather than encourage or promote, that the Superannuation Fund invest in X or Y, or invest very heavily in New Zealand—which, of itself, is a laudable aim—or invest in responsible investment, even though the definition of that is somewhat vague and it depends on who you ask. The guardians and the legislation have always resisted that proposition because, at the end of the day, those guardians are managing taxpayers’ money. They are managing money that is supposed to—certainly up until the suspension of payments from the Government’s coffers into the fund in around, I think, 2009, the aim of that fund was to offset, as the Minister of Finance has said, national superannuation and to provide a buffer in respect of the pension.

I would note, though, with interest, that it was the National Party, for the record, that opposed the fund. This is the second bill where National Ministers have got up and had a road to Damascus experience. What is the biblical term? The scales have fallen from their eyes and they have—

💬 Dr David Clark: You were there on the road to Damascus.

Was I? Thank you, reverend. I bow to my religious colleague in the front row. They have sort of had a turn-round on what they opposed vociferously in Opposition, often calling some of these things communism and other things—great, colourful language. Once they got their feet under the Cabinet table they worked out that, OK, it was not their idea, but it was a damned good one.

I think the tragedy of this fund—and I do, along with the Minister, thank the guardians and those professional investors who have grown this fund. Since its inception in 2003 the fund has returned, on average, 10.3 percent a year. It returned 18 percent on its investments last year and lifted its value to $29.6 billion as at June 2015. The tragedy, however, is that since the Government suspended its payments in 2009, had those payments continued it is estimated by independent advice that the fund would be worth something in the order of $47.8 billion. The argument was “Well, we’re not going to borrow money to put into the Superannuation Fund and invest.”, even though we were getting on average 10.3 percent gains, which was a hell of a lot better than anybody else was getting at the market right through the duration of this fund. But, actually, the Government was prepared, of course, to borrow for a tax cut. It was not prepared to borrow to invest; it was prepared to borrow for a tax cut.

I note Mr Bennett will be the next on his feet to give us a very authoritative dissertation on this piece of legislation. We await with bated breath. The tragedy is that those payments were not kept up. The Government decided to suspend them. The Government has said that it will not resume them until net debt is 20 percent of GDP, and on current predictions that is 2020-21. So that is a tragedy because all New Zealanders, I think, across the political spectrum, supported the inception of the fund. Many were a little bit concerned, you know, about a Government setting up a fund in this way, but the Minister did make comments, and I do support them, in respect of maintaining the independence of the fund from the sticky fingers of politicians.

I worry more about the sticky fingers of National politicians as they go searching for money anywhere they can—you know, in the next round of asset sales, perhaps, as we debated last week. But it is appropriate, because politicians of themselves are not experts, generally—very few of them, anyway; perhaps the Prime Minister is, and I say that in all seriousness—in investing money and working and managing funds.

💬 Chris Bishop: That’s definitely true.

Especially that member. So it is important for public integrity and public confidence that that independence is maintained.

I share the Minister’s view about ensuring that the fund does not take a majority interest, for the reasons that the Minister has said. It would take the focus off pure management of funds if you were, effectively, trying to run the companies that you have a majority stake in. I think this fund has proved its worth. I would argue that the sooner we can recommit to and re-engage in the Government instalments or the Government funding the better-off we will be. I suppose this, combined with KiwiSaver, is as good as you get, unless you go to compulsory superannuation as our Australian cousins have. It is probably the next best thing. It is the Government being responsible.

For those who opposed it, they have been proved wrong; for those who were sceptics, they have been proved wrong. It has more than exceeded its obligations, well ahead of most other funds, I am told, in the market. So we support the bill. We would urge the Government to resume as soon as possible payments into that fund. You know, $47.8 billion as opposed to $29.6 billion is a huge gap. Imagine where we could have been if the Government had met the previous Labour Government’s commitments and continued that funding regime. The Government would actually be ahead of the game. If you balanced up the revenue against the interest paid on the loan, it would be well ahead of the game on an average 10.3 percent gain.

So we support the legislation. I do not think there should be a lot of argument about this legislation. As I say, some parties have the view, perhaps, that the fund should be directed, almost, in its investment profile. I do not share that view. The only requirement should be that it invests to world’s best practice, because there are thousands—hundreds of thousands—of New Zealanders going forward, as we age as a population, who will come to depend and are depending on how this fund performs as a buffer for an ageing population.

We wrote it; we initiated it; those members opposed it. We have now brought them onside, which is great; they are now for it. It would be great if the Government could support its views with some dollars out of the coffers, because mark-to-mark this is an extremely good investment and the guardians, the investors, and the fund managers of the Superannuation Fund should be congratulated for what they have done since its inception in 2003.

I would just like to support the comments made by Bill English and Clayton Cosgrove, the previous two speakers, in regard to this legislation. It is legislation that there should be a lot of support in this House for. The Superannuation Fund itself has a lot of support within this House, and within the public in general as well, because everybody understands the need to provide for one’s superannuation needs in the future. The position where the Government can assist in that through the Superannuation Fund is something that everybody in this House has universal support for, I would imagine. There may be some smaller parties that do not agree with the legislation, but I do not think their concerns are really relevant to the legislation as it stands. They are more like policy aspects on which those parties have a problem with any investment.

The last speaker, Clayton Cosgrove, mentioned that politicians are not experts, generally, in investing money. I think those were his words. That is very interesting to hear when he is the member who says that politicians are experts in the investment in Kiwibank, and he would like to have that supported with their 75 percent support. So it was interesting to see that member talking about his own ability to make that judgment in regard to banking, but not in regard to superannuation. There is a slight difference there, I am sure, in Mr Cosgrove’s mind, but not in the reality of finance.

If we have a look at the legislation, the changes in the legislation relate to the restriction from allowing the Guardians of New Zealand Superannuation to control passive holding subsidiaries.

💬 Hon Clayton Cosgrove: Good old “Cue Ball”. You can always count on him.

So they are described as fund investment vehicles. Are you all right, Mr Cosgrove? Are you still there?

💬 Hon Clayton Cosgrove: Yeah, I’m good. How are you?

Yeah, OK. That is—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order!

—in the amendment to section 59 of the New Zealand Superannuation and Retirement Income Act. That relaxation is to enable the guardians to make prudent investments as the fund managers of our Superannuation Fund. That is to enable them to do it more efficiently. It also prevents them from holding or taking a substantial controlling interest, which is an important part because that is not actually their mandate. They are seen more as trying to get the returns for New Zealanders through the superannuation system rather than as actually becoming managers or corporate governors as such.

There are a few other changes around the board. Previously it could not delegate any powers of attorney—investment management custodian. Those restrictions have been removed in this legislation, so that is an important part of the legislation as well. Effectively, this legislation amends the powers that the board has and also that the Superannuation Fund has in its investments. That is an important part of progressing the Superannuation Fund so that it can deliver those results for New Zealanders and their superannuation.

We look forward to this legislation passing through the House. The parties that may not support it, and I think New Zealand First has indicated that it may have a problem with it—[Interruption] It is in support? Well, that is good to see. So I think we are going to get good support for the legislation through the House, and that is good to see for New Zealanders going forward. Thank you.

Dr David—[Interruption] Can I just ask members, as I am about to call another member—I have already called Mr Bennett to order for making gratuitous and silly comments to the member. I will invite him not to invite any more of them.

It is a pleasure to rise to speak to support this bill and to speak a little about the reason for it because I sat on the select committee, the Finance and Expenditure Committee, that heard the petitions of the Guardians of New Zealand Superannuation and heard them explain the reasons why they think these amendments are necessary.

Before I speak too much about that, I just want to correct a point raised by the previous speaker, David Bennett, relating to my colleague Clayton Cosgrove’s KiwiSaver bill.

💬 Hon Clayton Cosgrove: Kiwibank.

Sorry, the Keep Kiwibank Bill. The previous speaker was implying that this was about Ministers getting their hands on assets and selling them off and so on, and meddling in the day-to-day affairs of Kiwibank. That simply is not accurate. My colleague’s bill is about ownership of the bank, and it is merely a measure to stop the National Party flogging off Kiwibank in the way that it has flogged off so many other assets. I think New Zealanders are sick of a Government that is focused on asset stripping—sick of a Government that is focused on asset stripping. Members on that side of the House know the cost of everything and the value of nothing.

Again, in this fund—precisely in this fund—we see a similar thing going on. The Government has chosen not to invest in this fund, which is one of the funds that has the best returns in the world for a fund of its type, and has foregone revenues of about $18 billion as a consequence of its mismanagement of this fund.

I just want to draw the attention of the House to some of the awards that the Guardians of New Zealand Superannuation have won in recent years. I have a brief list here in front of me. In 2015 they won the gold award in the 2015 Australasian Reporting Awards. In 2014 they were the winner of the governance award in the AsianInvestor Institutional Excellence Awards and the gold award in the 2014 Australasian Reporting Awards, they were a finalist in the RI Reporting Awards 2014, and the guardians’ Cristina Billett was named the joint CLANZ-Chapman Tripp Public Sector In-House Lawyer of the Year. In 2013 they were the winner of the best first-time entrant category of the 2013 Australasian Reporting Awards, and a finalist, again, in the RI Reporting Awards 2013, and so on. The list goes on. In 2012 they won a further four awards and in 2011 they were runner up in another significant set of sovereign wealth fund awards. That is because they have outperformed—they have consistently outperformed.

The Superannuation Fund, which was set up by Michael Cullen, is a very good one, and although Bill English may have called it a dog at the time, he now seems very keen to cosy up to that dog and show some affection for it, which shows some dexterity in terms of his understanding of the issues involved. But the facts speak for themselves. This is a very successful fund and that $30 billion that it is now worth, as a result of returns of 15 percent over the past year and an average of 17 percent annually over the past 5 years and around 10 percent per annum since inception, is an extraordinary return. Even if returns were not so extraordinary, it would still be worth the Government’s while to be investing in that fund—there is little doubt amongst the commentators—rather than stockpiling debt, as it seems so keen to do.

It is a Government, of course we know, that has borrowed more than Sir Robert Muldoon’s Government. This Government is the Government in New Zealand history that has accumulated the most debt. With that in mind, it is good to see it making one or two sensible decisions here. It has just achieved, actually, its first wafer-thin surplus—the first it has ever achieved, even though the last Labour Government achieved nine out of nine. But, none the less, the Government is making a sensible decision here in listening to the guardians’ advice to put these additional vehicles in place.

We had a debate in the Finance and Expenditure Committee about whether these funds should be subject to the Official Information Act, and we sought information from officials. In the end, those of us on the committee were satisfied that the protections in place were appropriate and that the governance arrangements could be subject to the Official Information Act in so far as the guardians were directly involved with them, because the guardians would appoint their own directors, they would often be supplying people to work on those particular funds, and, in so far as being their end of things, we could hold the guardians to account for the decisions that were made—albeit the actual operation itself was at arm’s length. So we did debate those issues fairly robustly within the committee, and that is good parliamentary practice, but in the end we decided that that was appropriate.

We did, as a committee, though, suggest that there should be some involvement from the Minister of Finance in ticking off these operations, to give the taxpayer a voice—because the fund, of course, naturally, is at arm’s length for most of its operational decisions and because we felt that there should be a role, albeit largely a symbolic one, for the Minister of Finance to have some oversight of those decisions and to only intervene when there was a really obviously strange thing going on. This Minister of Finance has, somewhat arrogantly, overruled the will of the select committee, which contained his own members. The very thing that his own parliamentarians recommended was rejected by the Minister of Finance, and in the most recent stage of the Parliament sitting on this bill the Government ran through some changes that will see the Minister of Finance wash his hands of any responsibility for the decisions the fund makes.

That is, of course, this Government’s general approach. It is not keen to be accountable in any way. It is very keen to sell off the assets that this country owns, and very keen to minimise the signs of Government and to not be accountable for the actions of the Government in so far as it can get away with it. We think that is unfortunate. We think the taxpayers should have had a voice in this, albeit not one where politicians were actually meddling in the day to day decision-making, but one where there was a veto at the level of the Minister of Finance.

That aside, we will still support the bill because the vehicles themselves seem sensible and they were requested by the fund, which has been a very good fund. It would have been an even bigger fund had this Government not stopped the contributions that were being made, but, again, we see that that is the pattern of this Government. It has got an ideological agenda that is around minimal involvement and around not putting taxpayer contributions into savings funds. It has said it will not deal with the superannuation issue. This Prime Minister has said that he will not deal with the issue during his prime ministership. He is leaving those difficult decisions to future Governments. And, of course, we have seen the wasteful spending that accompanies this reckless economic management—the television screens in the Ministry of Business, Innovation and Employment, the $140,000—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! The member has been quite a long way away from the bill for quite some time. He will return to it.

Thank you, Mr Assistant Speaker. I am merely making the point that this decision the Government is making in this bill is one that we think is not economically as smart as it might be, and so although we will be supporting the bill, it is not without some small reservations. Thank you very much.

This legislation, as is typical of Government bills at the moment, is sensible and prudent legislation that, I think, has widespread support in the House. It stands in stark contrast, may I just say in passing, to the Keep Kiwibank Bill, advanced by the member who spoke earlier, Clayton Cosgrove, which has been the subject of some discussion so far in the debate. The Keep Kiwibank Bill wants to entrench Kiwibank to the extent that we have a secret ballot in New Zealand requiring 75 percent of Parliament to vote to remove those provisions. That was a silly bill. In fact, it actually breaches Standing Order 266, because to pass an entrenched provision through a bill, you have to have 75 percent of Parliament to—

💬 Hon Clayton Cosgrove: I raise a point of order, Mr Speaker.

The ASSISTANT SPEAKER (Hon Trevor Mallard): The member may be going to test me, but away you go.

💬 Hon Clayton Cosgrove: You have already—

💬 Hon Ruth Dyson: You passed, Mr Assistant Speaker.

💬 Hon Clayton Cosgrove: Indeed. You have already ruled on relevance. I think that was the speech Mr Bishop made last week, and—

The ASSISTANT SPEAKER (Hon Trevor Mallard): And the point is that I am the only person who can rule on it and it cannot be brought up by way of a point of order. You anticipated a comment that I was going to make. I did call a member back to the bill when he was getting too far away from it. The member, I think, should refer to this bill and not to a bill that passed through the House last week.

Thank you. I was pointing out that—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! No. The member does not make excuses; he just gets on with the debate.

OK. This is sensible legislation because it allows for funding investment vehicles, and, as the Minister of Finance rightly pointed out, there is a prohibition in the superannuation legislation that means that the Guardians of New Zealand Superannuation Fund cannot control businesses outright. And, actually, that is a sensible provision because, as has been pointed out, the New Zealand Superannuation Fund has grown to the extent now that it could actually control vast swathes of the NZX. But the guardians have asked for greater flexibility in the way in which they invest in order to allow controlling interest in passive holding subsidiaries, which will allow them to use global best practice in the way in which they invest, and this will, obviously, maximise the return for taxpayers.

There was some discussion previously in the debate, and also in the first and second readings of the original bill, and then at the Finance and Expenditure Committee. I was not a member of that select committee, but there was some debate as to whether or not the Minister of Finance should be able to approve the investment classes of the funding investment vehicles. I think it is fair to say that things have gone back and forward on this point, but the conclusion that the Government has come to is that it is absolutely paramount that we protect the independence of the Superannuation Fund—absolutely paramount. As the Hon Clayton Cosgrove rightly pointed out in his contribution to the debate, politicians are not great at deciding what particular companies to invest in, and they should remain well away from it.

I want to briefly canvass some of the claims made by members opposite about the prudent decision that the Government took after the 2008 election to suspend contributions to the Superannuation Fund. Members opposite have made much of this in the debate today and in previous debates. I think there are probably three things to say about this. The first is that if the Government had decided to continue to make contributions to the New Zealand Superannuation Fund, it would have, essentially, been borrowing money to invest, and that negates the understanding of risk. It would show that the Government does not understand risk. It would be like putting money on a credit card to invest in global equities, which are highly volatile. So, as Michael Cullen pointed out when he set up the New Zealand Superannuation Fund, that is not a smart thing to do.

The second thing is that although it is true to say that the New Zealand Superannuation Fund has made good returns in the last 6 or 7 years, it is equally true that in that time it could have made extremely large losses, and I suspect that members opposite would be saying something very different today if the Government had continued to borrow money at a time at which we were already borrowing to maintain entitlements and invest in infrastructure, and things like that. Members opposite would be saying something very different if the New Zealand Superannuation Fund had declined in value by 30 or 40 percent or any amount of money—they would be saying something very different. It is all very well to look back in hindsight and say—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I am just going to draw the member back to the bill.

I think I have made my remarks in rebuttal to the point about the Superannuation Fund. Look, this is something that National supports. We support the independence of the New Zealand Superannuation Fund. We support the New Zealand Superannuation Fund. This is a prudent bill that will maximise returns for taxpayers, and with that, I commend this bill to the House.

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.

As much as it pains me to stand up in defence of Government legislation—and it does pain me—just in response to what the Green Party member Julie Anne Genter was just talking about, she was assigning a kind of personality or proclivity to what are generic fund investment tools. They are simply a mechanism for the purchasing and management of investments. What the Greens have insinuated in their contributions this evening is the suggestion that the tools, in and of themselves, allow and contribute to tax havens or tax evasions. Unfortunately, that is just simply not the case—or fortunately, as the case may be, because New Zealand First absolutely supports this legislation.

We did take note of what the Greens had said in their previous contributions around tax havens and tax avoidance. I did spend a lot of time investigating the inference that they raised, and the reality is that it is only an inference. There are examples of fund investment vehicles being used injudiciously and inappropriately, but that does not make them bad tools in and of themselves. Used well by our guardians in this legislation, New Zealand First is absolutely confident that they are the right tool to be used in terms of moving forward.

I now want to address just some of the statements from the Minister of Finance. I want to agree with him in the main, because the very first thing he said was: “It’s taken us a really long time to get here.”

💬 Hon Clayton Cosgrove: Yeah, them—big time.

Yeah, true. It has taken the National Party a really long time to get here, and I cannot understand it. You have had consistent support from the Opposition parties right from the start.

💬 Chris Bishop: A busy Government.

No, it is not a busy Government, Mr Bishop. The Minister pointed out—and, again, I will come to this in the body of my contribution—that the Government must maintain its independence, or politicians must remain removed and ring-fenced from the decision making of this fund in particular.

💬 Hon Clayton Cosgrove: Apart from David Bennett. He’s an expert.

Yeah, well, Mr Bennett is an expert in his contributions to the House, and I do enjoy listening to those contributions. But, originally, it was suggested that the Minister have the right to intervene. New Zealand First asked the question: is that necessarily appropriate? It was great to see the Minister himself actually come back and say—well, probably not to our querying, I have to admit, but in response to the general outcry: “Actually, it’s not appropriate. We do need to remove this provision for the Minister to intervene into the Superannuation Fund.”

The issue here is what we have been seeing. Until we pass this legislation, the guardians themselves will be restricted in what they can do. They have said it themselves, and I will provide some detail very shortly. But what we like in this legislation—what New Zealand First likes I should more appropriately say—is that it does give the guardians an ability to make decisions around investing in New Zealand business. For us, particularly when you have this premier investment fund, to be able to do that is great, not just ideologically but fundamentally for our economy moving forward. It is an essential device in terms of promoting and enabling investment into this country.

The other thing the Minister said was that the fund investment vehicles themselves are a tool and a device that provides the guardians with a simple approach. It will provide flexibility for the overseers in reducing costs and allowing for greater returns. For us, again, for New Zealand First, that makes perfect sense. You reduce your operational costs, you allow the guardians to get in there and make wise decisions simply and effectively, and, in doing so, you allow for greater returns to this fund. It is not only logical, it is just common sense.

We agree with Mr English. The less intervention he has into this fund, the better. However, contributing to it has been another issue entirely. I do think it appropriate to raise in this debate that the National Government has, in terms of the total contribution to this fund, contributed only 2 percent of that total contribution. That is entirely inappropriate.

The Minister uses reverse logic, which the Government uses to attack Labour on its discussions around the management of the Budget. The Government uses some kind of reverse logic there to insinuate that Labour has got it backwards. The Minister has done the same here with this piece of legislation. The simply reality is that this is a lost opportunity on the part of the National Government. New Zealanders, whether they are retiring now or in the future, have, as a very bottom line, missed out on at least $10 billion in extra funds that would have been there if those contributions had continued.

In terms of just talking about the detail, the reality is—and I have hinted at it just previously—that the legislation basically removes the quite restrictive operating parameters that the guardians are currently under. It does restrict, and it has restricted, their ability to invest, particularly in New Zealand. New Zealand First has always maintained that these funds provide the premier opportunity for good investment into our own country, not only to boost existing businesses but also to create—well, that is a tricky word.

💬 Chris Bishop: Oh, come on, “Professor”!

To enable businesses to become New Zealand businesses, perhaps, once again, may be the politically correct way of saying it, without offending Mr Bishop’s ideological principles too much.

As I mentioned in my reply to the Minister, this should not, and cannot, mean direct political intervention. I would like to acknowledge the fact, personally, that here is an example of the Government actually talking to those stakeholders involved in this decision. So it went and actually talked to the guardians and said: “What’s the problem? What’s going on? What do you need?”. The irony of ironies is that it listened, and we now have this very sensible piece of legislation in front of us.

So just to summarise, New Zealand First does support this legislation. It is good, it is sound, and it may be called old school, but the reasoning for it is just because it is common sense. It allows the guardians to make good decisions using modern investment vehicles and, in our mind, will enable greater and more efficient investment into New Zealand, which can only be a good thing in our mind. Thank you.

The position I take in these debates usually has me providing lots of rebuttal to whatever Fletcher Tabuteau says in the debates. Given that he is now talking about the National Party being full of common sense and that he is coming on board and is agreeing with us, I do not have much content. We have been working on him quite hard during select committees to bring him across to the right side of the House, but he did make some sense. He was talking about the fact that this legislation arising from the New Zealand Superannuation and Retirement Income Amendment Bill is a good thing and is quite logical.

The Guardians of New Zealand Superannuation have asked for this change to be made through legislation, and we are doing it. It is an almost $30 billion fund—it is doing very well—but of course there is room for improvement, and so the guardians have asked for some legislation to enable them to make use of fund investment vehicles, and this legislation does this.

It is a very simple, small bill—it is only 2½ pages—but it will be quite crucial to enable the guardians to operate that fund more efficiently. I do want to touch on a couple of matters though. There has been discussion in the House about the way in which the fund invests and whether politicians should get involved or not. Absolutely politicians should not be getting involved in this fund. The guardians are experts in their field, they are the people who know best how to invest this money, and we should be allowing them to get on and do that.

The second point I want to make is around the lack of—supposedly—contributions that this Government has made to the fund. Well, there is a really good reason for that, and that is because we have been through a global financial crisis. The country has been through difficulty, and to say that the Government should have continued to invest funds into the Superannuation Fund and borrowed to do that is like saying that you should go and invest on the stock exchange by using money off your credit card. Well, it would be silly to do that, it would be economically wrong for us to do that, and that is why the Government ceased making contributions to the Superannuation Fund.

Mr Tabuteau wants to talk about the supposed $10 billion of lost opportunity, where $10 billion he says has not gone to the fund. Well, New Zealand First members would be the first ones to be complaining if the Government debt was $10 billion higher, so there is a very good reason why the Government had to cease contributions. The fund is doing very well though. There is opportunity for improvement, we are doing that through this legislation, and I support it.

The next call is a split call. I call Jan Logie—5 minutes.

I rise to take a short call for the Green Party on the legislation arising from the New Zealand Superannuation and Retirement Income Amendment Bill. Firstly, to engage with the last speaker, Jami-Lee Ross, and the comments about the Government’s reasons for suspending payments into the New Zealand Superannuation Fund, I say that the Green Party actually supported that decision at the time. We do recognise that when you are running a deficit, it may not be advisable and the best use of money to continue to put money into a superannuation fund at that time. But at the point where that Government cut the top tax rates, we entered into a different situation, and from our perspective of putting the focus on future generations and looking to the long term in our decision making in this House, we believe that it would have been in the best interests of our society as well as our economy to reinstate payments to the Superannuation Fund at that point rather than to cut the top tax rate.

What this legislation does that the Green Party is opposing—and the primary reasons have been outlined by my colleague Julie Anne Genter in her speech previously—is it gives the Superannuation Fund more flexibility to invest and maximise returns through the use of fund investment vehicles. For most people in this country who do not typically engage with investment strategies—and we have had interesting research recently around KiwiSaver that told us that, actually, we need to be engaging a bit more in the types of investments that we hold—I say that these vehicles will enable, amongst other things, the greater use of tax havens for tax efficiency and will, therefore, help limit Crown liability in certain circumstances.

So, for us, we were presented with deciding in relation to this legislation whether our primary focus is on ensuring that return for the country in terms of the Superannuation Fund in this limited perspective, or whether we needed to consider wider issues. The fact is that New Zealand, as well as the OECD, has been engaged in a global and national campaign to protect tax bases for sovereign countries to actually try to rein in the use of tax havens. For us that principle takes primacy—that, actually, we need, as a country, to be able to protect our tax base—and we would also fight for the right of other countries to protect those tax bases.

Currently, we have found out that, on last reckoning, $1.6 billion is going from the New Zealand Superannuation Fund into a range of investment vehicles based in the Caribbean and that they are notorious for tax avoidance. Therefore, although the New Zealand Superannuation Fund has given us assurances that it does not target aggressive tax avoidance measures and that that is not one of its strategies, the fact that this is looking to liberalise its ability to engage in investment vehicles that are based in areas where we know there are tax havens and there is a huge amount of tax avoidance happening does seem to be counter-productive, which is the basis for our opposition to this legislation.

And although we are talking about the security of New Zealand and our tax base, for us the primary thing that we should be considering is the divestment from investment in fossil fuels, because that is the absolutely fundamental question in front of all of us around the security of our people and this planet. We would have loved to be voting and supporting legislation today that committed us and the New Zealand Superannuation Fund to divest that investment. Currently, there is $676 million of New Zealand Superannuation Fund money invested in companies involved in the production and mining of fossil fuels, which is threatening our very planet, and for us that is the priority.

I call Stuart Nash—5 minutes.

That was an interesting speech by the Greens and I do not really understand why they are not backing this legislation, but I am pleased that Jan Logie is so set in her principles. No doubt she does not own an Apple iPhone or an iPad, she does not drink at Starbucks, she does not use Microsoft, and I have no doubt that she does not use Facebook, because these are just several examples of companies that maximise the global tax structure—at the moment—to minimise their tax. One thing I would say to Jan is that the Caribbean itself is not known for dodgy tax deals; companies choose to locate there at this point in time.

I am the first to agree that base erosion, profit-shifting tax structures are bad. I am the first to agree that we need to do some work around this, and I know that the Government itself is doing a lot of work with the OECD to put laws in place or to limit the opportunity for companies to engage in tax activity that is not in the best interests of the country—put it that way. But we cannot be too high and mighty about this. The New Zealand Superannuation Fund has a substantial investment in Apple.

What I would hope—it is not a hope; I know—is that the Guardians of New Zealand Superannuation are some of the smartest men and women in this country and what they look at when they look at an investment is the return that it is providing, the risk it gives, and all these other variables. I do not expect them to have a look at the tax structures that these organisations are putting in place and question the viability of those tax structures. What I would expect is that these guardians would have faith in the governance structures and the chief executive officer structures and the investment policies of these organisations to choose either to invest or not. So I do not think we can be too high and mighty about this, especially when as a country we are doing a lot of work to mitigate this.

I just need to clarify a couple of things that Mr Bishop and Mr Ross have said. This is not like borrowing from the credit card to invest in the stock market. When borrowing off your credit card, you pay 18 percent interest, and, if you are lucky, you might make 6 or 8 percent off the stock market. Borrowing at the rate that the Government can gives you about 4.5 percent, and you get a return, on average, of about 10 percent. It is not a good analogy and it is slightly disingenuous, and perhaps it just shows that maybe it should have put a couple of the economic speakers up on this legislation, because they might know what they are talking about.

But Labour does support the legislation arising from the New Zealand Superannuation and Retirement Income Amendment Bill. The main reason is that investment basically is about managing risk and, generally, the higher the risk, the greater the return—that is sort of Economics and Finance 101—but there are innovative ways to manage the risk while maximising returns, and this is one of these. The fund investment vehicles, or “FIVs” as they are called, are about managing the risk, and it is about allowing the guardians to be innovative in the way that they take our taxpayer money and invest it with an ability and a mandate to protect our future—to protect the Government’s fiscal position. We all know that there is $29 billion in this; it should be a lot more, but that is just the way it is. Anything that allows greater returns, minimises risk, and potentially lowers operational costs for the New Zealand Superannuation Fund is something we should actually support, because that is in the best interests of all New Zealanders.

I was not on the select committee when the original bill went through it; I was taking a sabbatical from Parliament. But I have had a look through the papers and I do not think I would have done—well, I know for a fact that I would have done nothing different and would have not put forward any other arguments aside from the ones that the Labour team put forward and the select committee accepted.

One thing I would say is that there is a fantastic book called Against the Gods: The Remarkable Story of Risk. It is by a chap called Peter Bernstein. I would recommend that the members opposite read it. It is about how we manage risk. The reason it is called Against the Gods is that no matter how smart classical cultures were, they always believed that when things went wrong, it was the fault of the gods. It was not until the last couple of hundred years that the modern economy developed tools to manage these risks. We do not blame the gods when things go wrong—there are other things we can blame—and we have the tools now, as mentioned, to minimise that risk and maximise returns. In fact, Peter Bernstein actually believes that this is the foundation of the modern economy. So I agree 100 percent that we should allow our Superannuation Fund to take advantage of any tools that allow the guardians of the fund to minimise that risk and maximise that return for all New Zealanders. Thank you very much.

It is a pleasure to be talking on the third reading of the legislation arising out of the New Zealand Superannuation and Retirement Income Amendment Bill.

Life is full of surprises. We have just had an excellent speech from Mr Stuart Nash, and, of course, I thank him for congratulating my honourable colleague Todd McClay on his work around base erosion. I think that is a very important thing. I thought the comments around Chris Bishop were slightly unfounded, actually. But then we have the Greens saying they do not support this legislation because of course it is a conspiracy and the very reputable New Zealand Superannuation Fund is investing in the Cayman Islands only for the purpose of tax avoidance, to use the clause she noted. I find that a rather strange sort of argument to be putting forward for not supporting this legislation. But I think the biggest surprise is actually the New Zealand First members—that they actually support this legislation. I am very pleased that Mr Fletcher Tabuteau is actually taking the opportunity today to support this legislation, and I commend him for that.

The New Zealand Superannuation and Retirement Income Amendment Bill of course goes hand in glove with the Taxation (Annual Rates for 2015-16, Research and Development, and Remedial Matters) Bill, which we are going to be talking about later on this afternoon. I fully endorse and support the purpose of this legislation. I think the major thing, which a number of speakers have talked about, is the ability for the New Zealand Superannuation Fund to adopt fund investment vehicles. As some of us know, these are very usual investment vehicles that are used all around the world, and because of the way the New Zealand Superannuation and Retirement Income Act was originally set up and envisaged, it was precluded from using these investment vehicles.

So what this legislation does is it actually allows those vehicles to be used. There are limits. They cannot be used to hold controlling shares or equity holdings, but they can be used to invest in funds that subsequently invest in debt and equity instruments.

I think the other subsidiary points that the legislation really deals with are the giving of greater powers to the Guardians of New Zealand Superannuation, which, of course, is the Crown entity that controls the New Zealand Superannuation Fund; the power to grant a power of attorney; the power to appoint an investment manager; and the power to appoint a custodian. All of those are sort of bog-standard arrangements.

The last thing this bill really drives hard at is protecting the guardians against spurious claims from third parties for doing acts that can be deemed ultra vires. I think that having protection around the very credible board that we have managing this fund, which has achieved outstanding results, is a good measure. This is a good piece of legislation and I commend it to the House.

Can I say that unlike my colleague Fletcher Tabuteau from New Zealand First, I am not disturbed in the least at supporting this legislation. I enjoy the rare opportunities we have on this side of the House to support legislation that is good. In fact, it is good to debate legislation that the Government has introduced, given how rarely that has been occurring over the last 12 months. This is a Government that clearly is not pressed for work or pressing for work.

💬 Chris Bishop: Oh, rubbish.

Chris Bishop says it is really busy. He has had a very, very sheltered life. You only have to listen to the start of Parliament every day, when the Speaker says “Are there any bills for introduction?” and there is a long silence—a really long silence—except on the days when there has been a members’ bills ballot, and then there are a few. That is good. Or there is the very rare occasion when Nick Smith introduces local bills or private bills—or today, when a Minister introduced a bill. You could hear the champagne corks popping down the back as those members said: “What a rare occasion this is.” But it is good to be able to support this legislation arising from the New Zealand Superannuation and Retirement Income Amendment Bill.

I am sorry that I am not on the Finance and Expenditure Committee any more. It sounds like it has had some really good debates. Even though this legislation is quite narrow, I do think that commendation to the members of the select committee is in order. It sounds like they have considered the issues with some rigor. There are certainly some tensions in the broader spectrum of what you might be looking at in terms of the responsibility for investment—this is taxpayers’ money we are talking about—as to where the accountability should be, where the liability should be, what the framework of the investment rules should be, and how much or how little political management, or political interference, there should be. Those questions are all legitimate within the frame of this legislation, and it does sound like a wide number of them were touched on during the select committee process. So I just say to my colleagues on that select committee that if they ever need a sub, I have always enjoyed participating in those debates and I am happy to do so again.

It is very interesting watching the National Government’s strong support for the value of the New Zealand Superannuation Fund. I still remember National’s reaction when we introduced it. It just has no qualms at all about doing an absolute flip-flop, from its staunch opposition then to its staunch support now, without any justification. It just changes its mind and pretends the past did not happen. Well, the difficulty with doing that is that the comments that were made by members at the time who are currently Ministers are on the public record. You only have to go to the Hansards and get them. You can look back at the archives of radio and television—

💬 Kris Faafoi: Got any?

I did not bring any with me, but I tell you what, Mr Faafoi, I do not need to look it up in Hansard to recall that Bill English, when he was sitting over on this side of the House, in Opposition, said to Dr Michael Cullen when the New Zealand Superannuation Fund was established: “This is a dog.” That is what he said: “This fund is a dog.”

Well, I know what the expression is about dogs, and now Mr English is treating the New Zealand Superannuation Fund as if it is his best friend. Perhaps that is what he meant by “a dog”, because now it is the greatest investment—the greatest idea. It is as if he had thought of it. It is as if he had supported it, instead of bagging it at the time and failing to see how important it was, and is, for New Zealand to not just plan in the short term, to not just go for the cheap political wins that the current National Government does, and to not dismiss any long-term need of our country and our citizens in the arrogant way that those members do. Even the first-termers have got an arrogant swag, which I find extraordinary, really.

But, actually, our responsibility as a Parliament, and certainly Bill English’s responsibility as the Minister of Finance, should be to look to the long term. What should we be doing now in 2015, 2016, and 2017, to make sure that future generations have at least as good a time as us in our beautiful country, but, preferably a better time?

One of the reasons for us to look so much to the future—it has always been the case that Governments and Parliaments should. But a particular pressure for us to do that now is the changing demographic of our population. We in this Parliament all know that in a few years’ time there will be a far higher percentage of our population who will be eligible for New Zealand superannuation and there will be a much smaller percentage of our population who are in a paid job and paying their taxes, which goes towards paying for New Zealand superannuation. What does that mean?

Well, there are a whole lot of policy alternatives we could look at, but one of the blindingly obvious proposals that the New Zealand Parliament considered in 2003 was to say: “We should save for the future. We should set up a fund that appropriations can be put into. We can deposit money into a fund, and in future years the investment and the actual deposit on that fund can be used to partially offset the increased costs of superannuation.” That was not rocket science. It was very logical. It was a very good thing to do, and we knew that it would give future generations of people who want to have New Zealand superannuation, in the same way that our generation wants to have it, more confidence that there would be more money in the bank in the future. So that was the point of doing that. That was the point of the establishment of the New Zealand Superannuation Fund in 2003, and the National Party’s reaction to the establishment of that fund—saving for the future—was to call it a dog.

I heard one of the contributors earlier—I cannot actually remember his name, but one of the contributors from National—say it is outrageous to borrow money to invest in the New Zealand Superannuation Fund and that it is like getting out the credit card to pay for something that you need. Well, that is absolute nonsense, particularly in light of the fact that the National Government was very willing to borrow money to pay for tax cuts. It borrowed money to pay for tax cuts, not for everyone in New Zealand, but for the highest-income earners. So people in this Parliament—the highest-income earners in New Zealand—got a tax cut from money that the National Government borrowed. It borrowed to pay for tax cuts, but it would not borrow to put ongoing contributions into the New Zealand Superannuation Fund. That is a muddled policy. That is a selfish, short-term outlook on how our financial management should be run.

You just have to look at the returns from the New Zealand Superannuation Fund to see how good it is. Last year the investments from the New Zealand Superannuation Fund returned 18 percent, so now that fund is at $29.6 billion. That money would not be there in the bank, in the fund, had that fund not been established in 2003.

If National had continued the contributions to the scheme, instead of suspending them and borrowing to pay for tax cuts, there would be $18.2 billion more in that fund—$12.7 million of unmade capital contribution, and $5.5 billion of forgone earnings. That is a lot of money that we do not have because of National’s short-sighted economic planning.

We have billions of dollars in that fund that can give our younger New Zealanders particularly the confidence that, frankly, I think they deserve to have. They are New Zealanders. They are working hard. They are studying hard. They will be buying houses—well, if they have got a good KiwiSaver account, they will be buying houses—and raising a family and contributing to our community. I think they should have what we will benefit from—that is, access to New Zealand superannuation.

The Guardians of New Zealand Superannuation have said that New Zealanders would be $6.2 billion better off if contributions had continued, compared with the cost of borrowing—$6.2 billion better off, compared with the cost of borrowing. That is what National gave away. That is what National should have invested in. This legislation, at least, does a bit to improve the standing of the New Zealand Superannuation Fund, and I am pleased to support it.

The last contribution by Ruth Dyson on the New Zealand Superannuation and Retirement Income Amendment Bill demonstrated once again a lack of understanding of the financial markets. The simple question, vis-à-vis the leverage that the previous speaker was talking about, is how much leverage, how much borrowing, does she have invested overseas in offshore markets? How much mortgage has she—or anyone in this House—taken out to put in? The point is that, inherently, we understand that there is risk involved, and that is why we do not do that, and that is why we do not expect a Government to do that.

In the main point of my contribution, I would rather focus on the importance of the independence of the Guardians of New Zealand Superannuation and why it is so important that we do not have the Minister of Finance’s interference or—yes, well, let us just call it interference—in the running or the management of this fund. For example, if we had the Green Party managing the finances of the Government of the day, we would have—what were the words—“divestment in investment in fossil fuels”, so no investment in Mobil or Caltex or any of these large corporates, so increasing the risk of the fund. We have had contributions from Mr Robertson in the past where he would like to invest more in the New Zealand Superannuation Fund—so, again, overweighting and putting the taxpayer at risk, overweighting the portfolio because of the whim of a potential finance Minister. That is exactly why we do not want—

💬 Chris Bishop: Don’t be too generous.

“Potential”—that is generous, you are right, Mr Bishop. Then of course I do commend Mr Cosgrove’s points, and he does talk about the importance of the independence of the governance of the fund, but then his colleague Dr Clark wants some sort of oversight, wants to have continued oversight in case “something strange goes on”. What on earth would that mean, Dr Clark? I have no idea.

This is a very good bill. It is very important that the Minister of Finance continues to stay at arm’s length, continues to mind the business of the Guardians of New Zealand Superannuation to get on and do their job. I commend it to the House.