New Plymouth District Council (Perpetual Investment Fund) Bill

I move, That the New Plymouth District Council (Perpetual Investment Fund) Bill be now read a second time.

The New Plymouth District Council (Perpetual Investment Fund) Bill was considered by the Governance and Administration Committee. Their report was unanimous in recommending that the bill be passed and I hope the bill can continue to progress with the support of all parties in this Parliament.

I want to thank the members of the Governance and Administration Committee for their work, also, too, the Department of Internal Affairs for their advice. And also, I want to say a special thankyou to the four submitters who submitted on this bill. I’d also want to acknowledge the New Plymouth District Council for their work, for their process in this, particularly Neil Holdom, the Mayor of New Plymouth, for his leadership, and councillors, and I also want to make special mention of Greg Stephens, who is an adviser at the council who has worked hard on this piece of legislation. I also want to say to the ratepayers and to the residents of the New Plymouth District: thank you for your engagement in recent years around getting this piece of legislation to where it is today.

The council has clearly placed a lot of work into this bill such that the committee did not need to make any changes or redraft any of its provisions. I know the council is very proactive in the Perpetual Investment Fund and is also in its financial assets to help to promote the wellbeing of the New Plymouth District community, without having to rely too strongly on our ratepayers. So it is great to see the mahi given the tick of approval here by the committee, and the bill being back in the House for second reading.

Now, I really want to go back and just recap on what this bill is about and what it does. It’s here to protect the—it’s such a tough one to say—Perpetual Investment Fund, or let’s just call it the PIF; it would make it a whole lot easier for me right now. The bill limits the area it can be used for within the New Plymouth District and also puts in place statutory controls to make sure that the PIF continues to be used in a perpetual manner and is not spent today at the cost of our future communities.

I particularly want to note the committee’s support of the council’s request for a small exemption from one of the provisions of the Local Government Act 2002 for the PIF. Usually, councils buying or selling shares in ports or airports of New Zealand have to undertake rigorous community consultation through their long-term plans. However, it is pleasing to see that the committee agreed to support a small exemption for this investment fund because, clearly, those types of investments are not community assets like the local airport or port. The four submitters all raised interesting views that the committee considered. The committee’s report canvasses these issues well.

I want to speak to one aspect that I’m going to pick up on around the select committee’s report. It’s in relation to the governance deed. Now, the governance deed provides the current structure for the management of the PIF and is an agreement between the council and the PIF guardians—the council-controlled organisation charged with the management of the PIF. Council has advised me that the bill is not intended to replace the governance deed. Instead, it provides a separate set of requirements that exist and operate alongside the terms of the governance deed.

In particular, the bill will provide a higher level of legal framework with additional requirements that will need to be alongside the governance deed requirements. For example, clause 7(1)(b) of the bill provides the council with the authority to take a larger than normal amount of funding from the PIF where this can be justified on the basis of current and future community wellbeing. The council will still then need to undertake its internal processes through the governance deed, which will require a 75 percent supermajority vote of the councillors. The council may choose to amend the governance deed to ensure it comprehensively reflects the requirements of the bill in due course. I hope that the record is therefore clarified that this bill does not include any provisions to remove the governance deed and it would remain in force if this bill passes.

This PIF is significant and I’d like to update the House on that this afternoon. As of the end of April, it was worth $349.7 million. I also want to congratulate the council on recently retaining its AA+ credit rating with Standard & Poor’s (S&P) global rating. S&P’s report makes very clear how important the PIF is to the New Plymouth District Council’s financial performance on behalf of its community, and that reiterates to me how important it is for Parliament to help the council to protect the PIF for the future and for future generations.

Now, why is this fund so important? Well, New Plymouth District has a population of more than 84,000 people. I would like to mention and just notice that Rachel Boyack has sat down next to me in the House and it is the sunniest place in the country—

💬 Angie Warren-Clark: Oh, controversial.

The second year running, thank you, Angie Warren-Clark from the Bay of Plenty. This comes up many, many times and I can just factually talk about National Institute of Water and Atmospheric Research Ltd, who, of course, does the research and the science. Back last year, there was a total of 358.6 hours of sunshine in New Plymouth during the month of January in 2022, which was an all-time sunniest record for New Zealand!

💬 Teanau Tuiono: Wow.

Yeah, OK. It was pretty interesting—vaguely.

I also want to acknowledge current MPs from the Labour Party who were brought up in New Plymouth. I want to acknowledge the Deputy Prime Minister, the Hon Carmel Sepuloni, who came back to New Plymouth Girls’ High School recently with the Mayor of Wellington, Tory Whanau, and from the press gallery we also had Jo Moir—all old girls of New Plymouth Girls’ High School. It was wonderful to have them there. Also, the Hon Andrew Little grew up there, along with Liz Craig. I know she’s in Invercargill—a long way from home, but I know she is looking at property to move back there shortly, maybe. And, of course, Angela Roberts, another wonderful, fine—

💬 DEPUTY SPEAKER: Mr Bennett, I’ve just looked at the bill, and the genealogy of the party does not really appear in here. So in the 2½ minutes left to you, I wonder if we could just devote a little bit of time to the bill, please.

Mr Speaker, I appreciate your guidance. I get very excited about the New Plymouth District and the electorate of New Plymouth; I can’t help myself sometimes.

With the PIF, in terms of investment, to ensure this is a mighty fine city and region, we have our award-winning coastal walkway. We have Puke Ariki. We have the Len Lye Centre - Govette Brewster Art Gallery. We have our Te Rewa Rewa Bridge. We have our magnificent airport and gateway into our region.

💬 Angie Warren-Clark: Juno Gin!

We have Juno Gin, thank you very much, Angie Warren-Clark, who has been there. We have Pukeiti. We have Pukekura Park, which, again, investment from the New Plymouth District Council ensures award-winning festivals such as the Festival of Lights that runs every single summer. We also have the WOMAD festival, an international festival, along with our wonderful surf beaches—Surf Highway 45—our Waitara River, our wonderful sites of significance like Te Kohia Pā, and, of course, our Taranaki Maunga. And the reason I mention all these places and all these spaces is because they take investment. They take money to ensure that they are kept up to a standard, that we are constantly moving with the times, ensuring that New Plymouth is the most livable city in New Zealand; not only the sunniest but a place for all people to enjoy.

So this legislation is around looking to the future. It’s ensuring, as I said earlier, that it’s not just for this generation to use now and to spend at will but it is to ensure that it is secured for generations to come so that we can continue to develop our parks, continue to develop our cultural heritage, continue to develop our swimming pools, our roads, and our infrastructure to make sure that New Plymouth continues to be the most wonderful city to live in.

I’m grateful to be able to shepherd this bill through the House, and I want to thank the committee again for their hard work to consider the PIF bill. And for those who took their time submitting on this bill, it is a real privilege and a pleasure—and tonight, I don’t know if the champagne bottles will open, because I know we’ve got a few more stages to go through, but I know that people in the New Plymouth District are grateful that we can protect this fund. I gladly commend this bill to the House.

The question is that the motion be agreed to.

Thank you, Mr Speaker. I want to acknowledge Glen Bennett for shepherding this bill to the House. I also want to make a point on some of the previous points that Mr Bennett just made that Taranaki is a very parochial place, and it’s partly because, I think, we had so many boundaries that were hard to get out of, for a number of years we just joined together and did what we needed to do.

I have to say on the sunshine hours’ one, it’s a pride thing to have but I have felt, in terms of the last few months of this year, very lucky to be based on the west coast of the North Island of New Zealand, because I realise that people north and east of us have been suffering tremendously.

I will just make note that when we’re talking about assets in Taranaki, David Bennett—the other Mr Bennett in the House at the moment—just brought to my attention to remind people that Taranaki is now part of the Chiefs, and I look forward to the game at the newly reformed stadium, which has actually been having earthquake strengthening for the last few years. So when we talk about things that the New Plymouth District Council is able to achieve, along with the Taranaki Regional Council, that’s one of those assets.

So National supports the intent of the bill to ensure sustainable long-term revenue for the people of New Plymouth. It’s a small bill. It will place reasonable statutory direction and control of the fund, ensuring it remains sustainable and delivers benefit for ratepayers. It has been endorsed by the council. I would also like to make mention of Mayor Neil Holdom and his council in New Plymouth, and also declare that I’m a ratepayer of that council as well. So, in speaking to this bill, I just want to make that very clear.

I wasn’t part of the Governance and Administration Committee, but I do know that this piece of legislation has undergone the full select committee process, and we will continue to support this bill.

So the object of the bill, which is to provide financial sustainability to the New Plymouth District, is aligned with National’s vision for a local government of devolved power, and councils maintaining diverse and sustainable revenue streams to deliver for their ratepayers.

While there are no current plans for amalgamation, the New Plymouth District Council have expressed a desire to ring-fence this fund for their own ratepayers. I will talk a little bit more about that in terms of submissions, shortly. But it wants a sustainable revenue stream to deliver for the ratepayers. I guess, when I think about that from a wider perspective and some of the legislation that’s being put forward over recent times around various entities in other bills, such as the water bills and things, we do actually have to think about what our councils are going to look like in the future. We support our councils to make those decisions, but this is a protection if you put all of that in the context of what we’ve recently been experiencing.

The people of New Plymouth own the shares that they sold to create this fund and they should be able to reap the benefits of that. But what I will say is that it is designed to be a scheme that will benefit the whole community.

It would be remiss of me to not talk about one submitter’s concerns, because I think they need to be put on the table. One submitter opposed the provision of the bill which would limit the benefits of the fund to the current district boundaries because he felt that it may cause disparities amongst ratepayers. That’s a fair question. I commend the committee for giving a fair hearing to the submitter. He had proposed amendment of that provision to account for future changes to the district area. I think that question actually is a good one for those who distribute the funds just to keep in mind in the future in terms of what they’re doing—is it going to benefit ratepayers? I think the point in time when it would benefit ratepayers is when the fund went into a deep hole or if the council needed some extra funding and they had to dip into the fund to actually support what goes on in the community in the future. But, hopefully, with proven investment, that won’t happen and they won’t have to dip into that fund to fund basic requirements and they’ll be able to use it to expand on what’s going on in the community.

The New Plymouth District Council established this fund in 2004 and it was to operate as a sustainable perpetual fund. This means that the money released from the fund should be lower than its earnings so that the fund’s capital base remains the same or grows. The opening balance was $259 million, but during the 2008 global financial crisis, the fund lost around $113 million in value over a five-year period. To recover this loss, the New Plymouth District Council reduced releases and increased rates. This bill aims to prevent those sort of issues from happening in the future. Although the fund has recovered since the global financial crisis, the bill does aim to prevent that, and Part 2 of the bill addresses just how the fund would be managed. Good management of this fund should ensure that it continues to be an alternative source of revenue and it can subsidise rates in the New Plymouth District.

It also says that the fund would be managed and used for the social, economic, environmental, and cultural wellbeing of the New Plymouth communities. I believe that the concern that the submitter brought to the committee—this was the worry of that person. I think it’s clearly listed in the documentation that that is the intent, and we hope that the investments go well in the future to allow that to happen.

But it still does, as part of this piece of legislation, allow the fund to be tapped into if there is a genuine crisis. We all know we’ve seen a few of those over the last while. If they’ve not been pandemics, they’ve been cyclones; we’ve seen cities recovering from earthquakes. Who knows what we’re going to be facing in the future. So touch wood that things will progress well for New Plymouth, but one never knows, so it’s always good to have a bit of a nest egg in place, just in case.

So clause 4 of the bill does define the “New Plymouth District” as the area delineated in section 35 of the Local Government (Taranaki Region) Reorganisation Order 1989. When I think about 1989, it reminds me of one of my areas in my electorate: Whangamomona. I represent the only republic in New Zealand. There was a bit of a concern about the reallocation of those boundaries, and so Whangamomona now has its own mayor, in a fun sense, and has a republic day every two years. But it sent a clear message in 1989, and every couple of years, that republic still continues to send that clear message.

The bill would restrict spending from this fund to the district area. So that is clearly defined in the Act. It does not provide the flexibility to account for potential future change to these boundaries. The committee said, “We asked whether such changes would create any difficulties if the bill were passed. [And] New Plymouth District Council told us that it has previously dealt with geographically limited funds, and is confident that it can manage [this] in an effective way.”

So, in supporting this local bill, as part of the National Party and as a Taranaki person, I want to commend this bill to the House and thank the select committee for the work that they did. Thank you.

Thank you, Mr Speaker. It’s a pleasure to rise in the House this afternoon to take a call on the New Plymouth District Council (Perpetual Investment Fund) Bill—the PIF bill.

As a member of the Governance and Administration Committee, it was a pleasure to hear what was a very small number of submissions on this bill and to be able to engage with the New Plymouth District Council and the member who has sponsored the bill through the House, my colleague Glen Bennett; it was useful to be able to talk through and hear from them about the benefits of the PIF to the New Plymouth community. I think many of us sitting around the table of the committee, and perhaps some of us in the House, were a little bit envious of this fund. It is a significant fund that does allow a significant amount of investment into the New Plymouth community.

I note one of those organisations that receives funding from the council is the TSB Showcase concert venue in the middle of New Plymouth, which I have fond memories of as a former member of the New Zealand Youth Choir; it was where I performed for the first time with the Youth Choir, in New Plymouth. I’m not sure if Marbles restaurant receives funding, however, but I do have fond memories of heading along with a bunch of hungry 20-somethings at the buffet there at Marbles restaurant in New Plymouth. Every so often, the waiting staff—they were dressed in a Greek theme—would do a whole lot of dancing throughout the restaurant, and we would then sing our way into the night on the karaoke machine. As I say, these are the types of investments that this fund can make into the New Plymouth community which enables the economic and social fabric of the New Plymouth society to thrive. I am very envious of their PIF fund.

Myself and the New Plymouth MP do have a little bit in common. One of things we have in common is having to constantly remind people of the difference between New Plymouth and Palmerston North. I was lucky enough to go to high school in Palmerston North, and many people around New Zealand often get those places confused. What I can say—look, they both have an “N” and they both have a “P” in the title of their names, and that’s about where it ends, the similarities between Palmerston North and New Plymouth.

As a proud MP from provincial New Zealand, who has grown up and spent the large majority of her life living in provincial New Zealand, it’s always enjoyable chatting to my colleague Mr Glen Bennett just about the similarities between Nelson and New Plymouth. But I would say: we are the sunshine capital of New Zealand, and I was pleased to present Mr Glen Bennett with a little box of sunshine, earlier this year, filled with products from mighty Nelson, which—I’m sure Mr Speaker would agree with me—is the sunniest part of New Zealand, it being his tūrangawaewae as well.

The other thing we share is that we are due to have a coastal shipping link started later this year between New Plymouth and Nelson, and, just like this bill and the Perpetual Investment Fund supports the economic prosperity of New Plymouth, so too will that coastal shipping route.

I’ll spend some time just focusing somewhat on the bill. As I said we had five submissions; there were excellent submissions.

💬 DEPUTY SPEAKER: Only took four minutes to get here.

That’s a record, Mr Speaker! I think it is important to talk through some of the history and the fund itself. It was established in 2004 from the sale proceeds of the council’s shareholdings in Powerco. What did happen, though, which I think the New Plymouth District Council and the bill’s sponsor have done a very good job of explaining well to the committee, was it was not managed sustainably, so it lost around $113 million in value over five years. That was following the 2008 global financial crisis. That gave cause for concern to the council and the community about the ongoing financial sustainability of the fund.

What the bill does is it requires the council to use the PIF for purposes that are primarily for the benefit of current and future communities of New Plymouth, as defined by its current boundaries—and I’ll make some commentary on that a little bit later. It requires the council to have independent financial managers that make best-practice investment decisions to maintain or increase the value of the PIF over time and avoid prejudicing the council’s reputation. It ensures that the council can only reduce the real value of the capital of the PIF where circumstances arise that warrant doing so. I just note the comments from the former speaker, Barbara Kuriger, just around that being in some type of emergency situation whereby there could be a need to tap into that fund.

It’s very important, and the New Plymouth District Council made that very, very clear about their view that they needed to ensure that ongoing financial sustainability of the fund. And that’s important; when you’ve made a decision to do something such as sell assets in a company like Powerco that has an ongoing dividend and income application, essentially, to the council, you need to ensure that you don’t then have a sugar hit of funding that then depreciates away and you’re no longer able to continue investing in perpetuity. It’s prudent that there’s some removal of that management of the fund away from, for example, councillors—not suggesting they wouldn’t have the best interests of the fund in their approach—to those who are financially sound managers so that you can ensure that you’ve got that expert advice. It’s certainly something that the committee completely agreed with.

I will just make some notes about the submitters who opposed the provision in the bill which would limit the benefits of the PIF to the current district boundaries. That submitter felt that this could cause disparities amongst ratepayers. Now, the particular point this submitter made during select committee hearings was that if there were to be some form of merger in the future—now that was an if, but there are always potentials for council mergers to occur around the country. The submitter made the point that if there were to be a merger, you could then have a disparity between ratepayers that were within the current New Plymouth boundary and those that are not but could be part of some form of merged council.

Now, my perspective and the select committee’s view was that, given that this fund has come from the initial investment in Powerco and the decisions made by New Plymouth District Council for the benefit of ratepayers within that district—it’s certainly my view, and I believe the committee agreed with the council that that should be ring-fenced for the benefit of those people that have contributed to that fund in the first place. That’s not to say that in a hypothetical situation, if there were to be some form of merger in the future, that the council was not stopped from coming back to Parliament to potentially change that at some point in the future, but, ultimately, that would be a local decision to make.

On that note, it is just worth reminding the House and those who may be watching that this is a local bill. So this is a bill put forward by the council where they have undertaken the consultation necessary in order to get the bill to a point to bring to Parliament. Unless there is something that is of concern from a legislative point of view or from a Standing Orders point of view, our role as a select committee during this process is to ensure that submitters have the opportunity to be heard and that the council itself, in taking the bill through the process, has heard those submitters and has followed an appropriate process. So I am comfortable with the decision that the New Plymouth District Council has made. I think it’s the right one.

Now, my colleague Mr Glen Bennett in his speech, and we have in the select committee report, as well, about the governance deed—and that may be a matter we have to have some further conversation about as this bill progresses through the House, which, as a member of that committee, I’d be very happy to have that.

I do also want to note that the New Plymouth District Council also did an excellent job leading to this process to look at a number of other options. I don’t have time to traverse them, unfortunately, because I have taken some time to speak about the wonderful provinces of New Zealand—New Plymouth, Palmerston North, and Nelson. This is an excellent bill. I commend the council on their work. I commend my colleague Glen Bennett. I thank the submitters. I commend this bill to the House.

Well, where would you start after the last three speeches, talking about the great places they live? I could start by saying, “Palmerston North, the sunshine capital of New Zealand.”, but I won’t. Ha, ha! I thought that would draw a bit of a—but we are, without a doubt, the wind capital of New Zealand.

Anyway, back to the important issue of the bill. The bill, of course, spent a little bit of time in the Governance and Administration Committee, and was pretty much passed with very minimal change. So I think one of the observations I’ll make before I start to talk about some of the other factors about this bill is that we have a lot of these sorts of bills come through the House, and I think there must be a better way of dealing with these issues than spending time in the Parliament on what, effectively, are very local issues. Of course, we’ve got other bills coming through on this very day that concern single families, and I think there must be better ways of dealing with this than putting them through the onerous select committee processes and running through a significant time in this House. I think that it’s time we had a look at those opportunities, and, of course, we’ve got one or two other bills in the Governance and Administration Committee at the moment where there are some questions as to whether they should have come to the House or not, and those will be resolved in the next few weeks. So I think there is an issue with the number of bills we bring through here.

Of course, this fund is, effectively, the product of a bill. It wasn’t initially, but it was put there. I want to speak about how these funds came about, because I remember, at the time, New Plymouth had a very, very—well, I suppose he was an outgoing mayor, Peter Tennent, and he had the foresight, which a lot of councils don’t have, to actually retain the investment that the New Plymouth District Council—or city council, I suppose, at the time—had had in Powerco. Some of the other councils in my area disbursed those shares to the shareholders who, effectively, were the ratepayers, who promptly sold them.

I think I go back to my time in local government where the councils were busy selling off rubbish dumps and what were called rubbish dumps in those days, which have graduated to be landfills, to recycling centres, to whatever. Those are all now privately owned, and I think that’s a great shame. I think this fund here is a great example of what can be achieved by a community having the foresight to retain an asset that then can be paid out. I know that there are other councils around New Zealand at the moment having significant debates about the, I guess, strategic assets that they hold and what should happen to those, and there’s a great rush to sell them. I’m very opposed to selling those assets, because I think they’ve got much more good for the collective community than they have by being dispersed, and, in our case, for the Powerco shares, hocked off for about 1,200 bucks a household.

Imagine the good—and I know there has been a bit of talk today about the loss that this fund suffered but, actually, it’s not really a loss, because all that money was dispersed to the city council who then subsidised the rates. Now, you could argue that’s a dumb process, and I think probably proved in hindsight that it was a dumb process, but, none the less, that money is still in that community, so it isn’t going anywhere; it just didn’t still exist in this fund. So I think there are some questions you can ask about the way these things operate, and we’ll never get it right. I don’t think, as I said earlier, it necessarily needs to be the prerogative of Parliament to put these Acts in place. I think local communities should be able to manage these things themselves without them becoming Acts of Parliament.

This will probably, no doubt, come back, and the very issue that has been raised by all of our speakers around the submitter who lived outside the boundary and wasn’t so much concerned about a merger as a boundary change. In the Manawatū, of course, we went through a boundary change between Manawatū District and Palmerston North City not that long ago, and if a bill like this had been in place, the piece of land that went to the Palmerston North City from the Manawatū District would not be eligible for the funds to be applied to it even though it’s part of the Palmerston City. Rachel Boyack outlined the reasons for that, and they were pretty good reasons, really, for the same reason that we dispersed the shares and were sold off individually, those people, effectively, didn’t get the benefit of those shares in their hands; the city council or district council chose to keep them, put them into an investment fund, and invest it for the future of that region.

It is quite a parochial area, Taranaki, and I’ve got no claim to it other than my wife comes from South Taranaki, and, of course, we saw some members of the South Taranaki community in here earlier making quite a lot of noise; she’s much quieter than that. But I think that they also have a fund like this, and when you go to Hāwera and see the facilities that they’ve managed to put together in a small community like Hāwera as a result of, effectively, that investment fund that they created out of the same sale as this one we’re talking about, it’s quite significant. I think it just proves the value of those things to a district. Anyone who went to Chester Borrows’ funeral would have seen that massive asset where that funeral was held, which was exactly the result of an investment from a fund like this.

Just to go back in history, and I talked about Peter Tennent earlier. It seems ironic that when this fund was set up, the first thing it did in the land of milk and honey—or milk and oil—was to go to Tasmania and invest in a dairy farm. Ha, ha! Quite extraordinary, when you think about it. They had all the dairy farms in the world in Taranaki, so they go off to Tasmania and shove a whole lot of money into Tasmania. Luckily for them, they got out of that, but only by the skin of their teeth. So I think that’s what actually led to the formation of this Act to some extent, because I think the investments were seen as being pretty odd for a place that’s entirely—well, almost entirely—reliant on the oil industry and dairy cows to a large extent anyway, to suddenly—and a bit of think-big stuff—invest in a whole lot of dairy farms in Tasmania.

I guess that’s the sort of thing that these kind of laws or Acts, effectively, endeavour to protect. But you can’t protect everyone from humans, and humans do strange things at times. So that was a bit of the background to this investment fund. I do think that these things—as I’ve said a couple of times—are of great value to communities like Taranaki, and I congratulate them on bringing this bill to the House and getting it passed, and, hopefully, enabling it to protect this investment for the future of that district.

We had four submitters, I think it was, that submitted in the course of this bill. It was pretty well put together by the New Plymouth District Council and there was plenty of precedent for it. There are other investment funds around the country that are controlled by bills like this, so it was a pretty straightforward decision for the council to support the formation of it. So I think that the future of investment funds like this is probably to provide facilities and amenities for those communities that probably should never be funded out of rates. So if you think about the drive to get, I suppose, councils to concentrate on their core—what some people would call their core—activities around water, roads, and libraries, and one or two things like that, the facilities that get provided in these communities from funds other than council funds have great value to those communities. They have that value for two reasons. One is because they don’t put a whole lot more demand on the ratepayers, and it enables those communities to have those amazing facilities that I talked about with respect to Hāwera, actually, but New Plymouth’s obviously got plenty of them as well, and some of them will serve the community for many years to come.

So I think, as I said earlier, that these bills would be better if they didn’t have to come to Parliament. I accept the reason this had to come to Parliament, because they wanted to change what, effectively, was an Act of Parliament anyway. So I wish the New Plymouth District Council all the best in the future with this.

I think one other thing I really need to point out as well is that, effectively, the management of this fund is totally independent from the district councils or the—I’d better be careful what I say about elected members, hadn’t I, but from the fingers of elected members. I think that’s very important as well, from that perspective. I don’t think we get elected to Parliament or to councils, for that matter, to end up running investment funds. That’s not why we’re there. So I think it was a very wise decision of the New Plymouth District Council to make sure that that fund is managed in a professional manner. We’ve seen with other big funds in New Zealand that when they’re managed well, and there’s no reason why they shouldn’t be managed well, and managed for the long term, they become very sustainable and very valuable to those communities.

So I think this bill is a good one, and I know it will support New Plymouth well, and I look forward to it making its way through the House, or the rest of its way through the House. Thank you, Mr Speaker.

Thank you, Mr Speaker. ACT will support this bill. ACT believes that local government should be in control of its own destiny, and that if New Plymouth District Council have been effective guardians and stewards of investments made in the past, then they should reap the rewards of it.

This is an example—this investment fund—of local governments’ intergenerational thinking, decision making focused on long-term sustainable outcomes. And it’s a credit to the New Plymouth District Council and to those who have managed the investment fund—at arm’s length, may I say.

But one of the advantages of this fund is that it has paid out over $240 million to the New Plymouth District Council since 2004. That’s $240 million which has been used to offset potential rate rises and to cash flow, borrowing, and debt that’s enabled the district council to invest in infrastructure and all kinds of facilities that the town of New Plymouth benefits from.

The things that make New Plymouth and the Taranaki region wealthy are things that it’s good to invest in: energy, natural gas, manufacturing, farming, and tourism, of course, because New Plymouth is a great place to visit. And one of the reasons it’s a good place to visit and a good place to live is because of the investment in infrastructure; not just roads, not just pipes but also that social infrastructure like art galleries and libraries and other facilities the people of New Plymouth benefit from.

But I think it’s important to note that these investments have been managed independently of elected members. It has not been individual councillors or a majority of councillors deciding what to invest in. That decision making has been outsourced to people who are competent at investment. That is why I was surprised to hear the member Ian McKelvie suggest that councils should still be investing in rubbish tips. Well, I had an experience working at a council, having to clean up after their rubbish tip investments—over 50 years of dumping rubbish in the harbour or in rivers or in the back of someone’s farm—and I don’t know if councils are the right people to be building and investing in rubbish tips. Now, of course, local government needs to use waste management facilities, and, fortunately, the private sector provides the best waste management facilities in New Zealand—permitted and consented and operating safely. We don’t need council to get involved with that.

But again, thinking that elected members know what to invest in is what has led to some absolutely disastrous investments. When we think of Auckland Council owning airport shares that haven’t returned a dividend for years. Auckland Council, where I live, owning Ports of Auckland—100 percent. A council that is so cash-strapped, they even proposed cutting access to the Auckland Art Gallery, to taking paintings away, maybe even selling them for a bit of cash. That’s why local councils should not be involved in using ratepayers’ money to invest in things like ports and airports that don’t pay a return when councils desperately need to use their capital to invest in other infrastructure and services.

It would be fair to say that New Plymouth District Council’s outsourcing of its investment to the Perpetual Investment Fund is the best example we could hold up right now to show why councils should simply focus on the important things. Invest in infrastructure, invest in those social amenities like pools and libraries, for example, that the communities rely on. But in order to do that, they do need cash flow. In this case, for New Plymouth District Council, it comes from their investment fund. But there are other opportunities for other councils. Now, I don’t agree with Mr McKelvie that councils should be investing in rubbish tips, but it’s true that there are other ways to raise revenue.

What ACT would propose is if other councils wanted to get even close to what New Plymouth has managed to achieve, they should consider doing things such as applying user charges to the supply of water, which is still a mystery in places like Wellington City—where as a temporary resident spending 30 weeks a year here as a visiting MP from Auckland, I notice that there is drinking water running in the streets. When I asked my landlord when I first moved to Wellington why is there chlorinated drinking water running in the streets, he assured me it couldn’t be and that it must be groundwater coming out of the hill, because no one would let chlorinated drinking water run in the streets for what he said would be at least the 15 years he’d seen it running down the road. But it turns out that it was, because in Wellington they don’t meter the water and no one in Wellington pays user charges for the water that they use.

It shows you this huge difference in the competence and the aspiration of organisations like New Plymouth District Council, when you compare them to the performance of others around the country. I do really feel for my friends and colleagues who live in Wellington City and have to live under the current regime, which isn’t delivering infrastructure and, in fact, is putting people at risk of even having lamps fall off street lights on to their heads as they move around the city.

So I think it’s important to reflect that long-term decision making; what to invest in, whether it’s investments—as New Plymouth District Council has outsourced to their investment fund—or infrastructure that is desperately needed for the community, local government needs to be thinking long term. And it can only do that when the playing field is clear; when the runway is clear of obstacles. Unfortunately, this Government has actually put more obstacles in the way of local government achieving its objectives, rather than removing them.

When we think about applying—forcing, even—co-governance on the Canterbury Regional Council, Environment Canterbury, through to the aborted attempt from one of their members to introduce a local bill to force a completely unweighted and undemocratic representation arrangement on the Rotorua District Council.

Or if we think about the future of local government, the inquiry that the Government has set up which produced a report that is so full of woke nonsense you’d think that it has been written by a group of undergraduates at university in their first term of learning about local government, it’s an appalling prescription for what should be institutions charged with supercharging their community aspirations when it comes to economic and social development. Because that’s what New Plymouth District Council has done by outsourcing the management of investment to the Perpetual Investment Fund, reaping $240 million in returns over the past 20-odd years, keeping rates down and providing sufficient headroom to invest in infrastructure.

Now, that’s why ACT will support this bill. It’s a good bill and we look forward to seeing more great things the next time the ACT Party takes our bus to New Plymouth to hold a public meeting—we expect to hear great things about what’s going on in New Plymouth. Thank you, Mr Speaker.

Thank you, Mr Speaker, I appreciate the opportunity to rise and take a call on the New Plymouth District Council (Perpetual Investment Fund) Bill, or otherwise known today as the PIF bill. I’d like to begin this afternoon by congratulating my colleague Glen Bennett, and my neighbour—we share a boundary just south of Ōpunake, on the Taranaki coast there, in the South Taranaki District; a beautiful part of the country. But congratulations, Glen, on shepherding this bill through the House, your work is really good. I also want to acknowledge the work of the Governance and Administration Committee in considering this bill and hearing from submitters. And I also want to acknowledge Glen for his work with the district council to bring this bill to Parliament so we can see the wonderful work that they are all doing in New Plymouth.

I’ll continue, as many speakers before me this evening have done, and link back to my connections to New Plymouth. In fact, when I was in what was then called form 1, at Waverley High School, we hopped on a bus and went all the way to New Plymouth and competed in the Smokefree Stage Challenge. So we spent the whole day in New Plymouth, which to us, coming from Waverley, was pretty big smoke, and competed against the other high schools across the region in the performing arts known as Smokefree Stage Challenge, so there was a great deal of fun. And I want to acknowledge that this PIF does go a long way to contributing to the community in New Plymouth and the assets in New Plymouth that we consider iconic, including things like the TSB Festival of Lights, which happens at the start of each year, over the summer period.

I’ve had the good fortune to go up to the Festival of Lights myself. I took my daughter there a couple of years ago on our summer break and wandered round the park in the dark with her toddling along—as she was then—looking at all of the light installations in awe, and also trying to play on the park and climb up slides that were far too big for her at the time. And I’m not quite sure how we managed it, but, wandering around in the dark in the park there, we somehow managed to get lost. But it’s assets like that that are a real benefit to communities like New Plymouth—to the Taranaki region as a whole.

As an MP who’s also based in Taranaki, I know how much that assets like that even contribute to the whole region. They draw in people from outside of the region. We benefit, in South Taranaki and Whanganui, from people travelling from Palmerston North, which has had a couple of mentions tonight, all the way through my electorate, through Whanganui, up through Waverley, Pātea, Hāwera, Eltham, Stratford—you get the picture, indulging in the beautiful Taranaki Arts Trail. Some might veer off and go around the coastal highway and indulge in the scenery that way. Then, they get up to places like the TSB Festival of Lights, which, as I said, is an asset that New Plymouth is able to put on as a result of this PIF fund—

💬 DEPUTY SPEAKER: Probably time to indulge us in the bill now, Ms Lewis.

—and that’s why it’s important that we, as a Parliament, take steps to ensure the longevity of this fund so it can continue to contribute to the New Plymouth community and, as I said, even to the wider region as a whole for years and years to come.

As some of my colleagues across the House have said this evening, the fund wasn’t always managed as well as it could—and perhaps should—have been. We saw it losing around $113 million in value over five years following the global financial crisis. So through this bill, what we want to ensure is that we don’t see a situation like that occur again. We really do want to ensure that this fund is around for generations to come, because it has done some tremendous things—that they’ve been able to achieve.

So this fund was established as a result of the sell-off of the New Plymouth shares in Powerco company, and, like I say, they’ve been able to invest in some incredible assets across the region. May I make one suggestion, which perhaps my colleague the member of Parliament for New Plymouth, Glen Bennett, might like to take back to his electorate and the fund managers could maybe consider: install a few more electric vehicle (EV) chargers across the city. As someone who has recently purchased an EV, it’s a bit challenging having to wait in the queue to use the EV charger at New World in New Plymouth. So I would encourage them to consider maybe putting that on the agenda for future investment with the fund, potentially, to benefit the community.

The heart of this bill is ensuring that future investment is absolutely for the benefit of the New Plymouth community. That is really important to make sure that we continue to identify key strategic assets that benefit New Plymouth, and that is what this fund does. That is why I take great pleasure in commending this bill to the House. Thank you.

The time has come for me to leave the Chair for the dinner break. The house will resume at 7 p.m.

Sitting suspended from 6 p.m. to 7 p.m.

Members, the House has resumed. Members, before the dinner break we were on the New Plymouth District Council (Perpetual Investment Fund) Bill, and I understand we are up to call No. 7.

Tēnā koe, e te Mana Whakawā. I am pleased to take a call on the New Plymouth District Council (Perpetual Investment Fund) Bill. Firstly, I too would like to commend my colleague Glen Bennett MP for his sponsorship of this bill. New Plymouth sits in the Te Tai Hauāuru electorate, where I am based as a list MP. While I live at Rātana and was raised in Whanganui, I have strong ties to Taranaki through my whakapapa, whenua, and where close whānau still live.

You know, over the years I have heard some pretty mean things about the New Plymouth District Council, but what I want to do is I want to take this opportunity of acknowledging the great work of the former mayor Andrew Judd, who calls himself a recovering racist—more importantly, though, the wonderful work he has done supporting Māori wards, bringing to light the depth of racism. I have heard the calls of many ratepayers over the years who simply could not pay their rates while I served in local government. This bill can go some way towards supplementing those rates that they struggle to pay, and benefiting the communities in the New Plymouth region.

Clearly, something needed to be done to ensure the Perpetual Investment Fund’s (PIF’s) original intent of being a sustainable fund to annually subsidise the general rate is achieved—its original intent. It is sad to see the loss of some $113 million in value over five years. I’m grateful for local government long-term planning process, for it was after this process the council landed with this bill. In 2021, council officers during their long-term process reported on introducing a local bill based on benefits to those living in the current district boundary, those providing legislative protection to its capital base, and benefits back to the community in perpetuity. I want to acknowledge the work of the council officers. They work hard, they work diligently, and are passionate about what they do. Sometimes they are not recognised for the contribution that they make to our communities and to local government.

Due diligence was exercised and alternative options were considered, including doing nothing, which was not an option as it would not achieve the legislative protection on the capital base. Council has also considered other local legislation, including the New Plymouth District Council (Waitara Lands) Act 2018. Community consultation closed on 17 June 2022, with 52 written submissions received. I extend a thankyou to all those in the communities who have made their submissions to this process. I have seen and know personally the effort and sometimes the anxiety that goes into making those submissions, particularly from our flaxroots people.

I want to acknowledge the New Plymouth District Council’s efforts and their submissions in particular. “The Bill ensures the PIF continues to benefit our community”. How do they do this? By setting an annual release to be used to subsidise general rates. In 2022-23, the release was some $10.4 million, therefore reducing the total rates required by around 8 percent—8 percent; that’s huge—a saving of some $163 per year per ratepayer, significance in savings. The release enables council to provide a level of service higher than what they could afford through rates.

“The [bill] acts as a key cornerstone for our financial position, providing ‘halo’ benefits.”—as another part of the New Plymouth District Council’s submission—“It means [that] Council has financial assets larger than … external borrowings, reducing the costs of borrowing and”—as mentioned by my colleague Glen Bennett—supports a “AA+/Stable/A1+ credit rating.” This is significant.

It also “embeds the lessons of history while being flexible for the future”. What does this mean? It means the council of the day must be satisfied the flexibility of the fund achieves a better outcome for the wellbeing of both current and future communities. We are all about the future and the future generations. We are making decisions that impact on them. This is important. This is important to me. It also means it cannot be used to simply keep rates down to gain political advantage, “ensuring … it can be accessed following a significant natural disaster or other unexpected event.”—and I do not need to emphasise that any more than the current environment, if you look at it, that we live in today.

To avoid any further losses, it is important to ensure the real value of the capital must be protected and that any reduction be considered under justifiable situations. It is to that end that I want to emphasise a submission from New Plymouth Perpetual Investment Fund Guardians Ltd. They support “the intention of the bill to provide statutory provisions to ensure the real capital value of the fund is maintained”—it must be maintained and/or increased—“and … ensure [it] continues to be used for the … New Plymouth District community, in perpetuity”.

Of particular relevance to this, it is outlined in clause 8, where it provides that investment decisions are to be made independently of elected members’—really important—conflicts of interests and their interests. The clause provides additional assurance on the independence of New Plymouth Guardians to manage the PIF in the best interests of New Plymouth District Council. The case in point here is it provides that investment decisions are to be made independently of elected members.

As per processes, a recommendation was received from the Governance and Administration Committee recommending the bill be passed. This bill will help grow communities; it will help reach their dreams and aspirations, so it’s a big congratulations to everyone involved in bringing this bill to the House. Well done, again, to my colleague MP Glen Bennett. Well done for sponsoring the bill. Lastly, absolute heartfelt congratulations to the ratepayers of the New Plymouth District Council. I commend this bill to the House.

Thank you, Madam Speaker. I rise on behalf of the Greens to support the second reading of the New Plymouth District Council (Perpetual Investment Fund) Bill. I have been listening with great interest to the various contributions around the House before we broke for dinner, and many of the people reflected on their relationship with New Plymouth and also their relationship with the Taranaki region as well. But during one of the calls, which was taken by my colleague Rachel Boyack, she pointed out that there are some geographically challenged people who didn’t know the difference between New Plymouth and Palmerston North, and that was reflected a bit around the House today.

So just to reiterate the difference, in Palmerston North we have the majestic clock tower there in The Square, where we measure the greatness of the mighty Manawatū against the linear trajectory of time. But, of course, New Plymouth has many outstanding features as well, and as I was listening to the many contributions earlier, I was reflecting on my first time in New Plymouth, when I was spending some time with my mate Taipuni Jason Ruakere—who now sits on the pae, often, over at Pūniho Pā—and a number of the Taranaki whānau. I remember them taking me out surfing for the first time, and you would think that because I’m an Islander from an island surrounded by the ocean, I would be a good swimmer, but that would just be an assumption. I had to learn a quick few lessons. But the heart of that community and the heart of that district—the majestic Taranaki maunga—and the commitment to that community is something that I think we can all reflect on and celebrate in terms of the Taranakitanga.

The purpose of the Perpetual Investment Fund and part of that history has been traversed tonight as well. I did like the contribution from Ian McKelvie because he did put it into some historical context, which made it a lot clearer for me. Going back to 2004, there was Powerco shares—I think that was what they were called—and instead of flicking them out and getting a one-off payment to the ratepayers, the foresight of the people running the district council at that time meant that they set up instead this Perpetual Investment Fund in 2004 to make sure that it could do good things, great things, for that community. That’s a good thing that we support, as Greens, as well—appropriate decision-making, making sure that you look after the community—and that fund is still here today.

It did hit a bump in the road during the—well, a big bump in the road, and I think we all felt it at the time, which was the 2008 global financial crisis. The original opening balance was $259 million, and then the financial crisis happened and they lost $113 million in value over a five-year period. So the purpose of this piece of legislation is to try to ring-fence that to make sure that the—I guess the way that I’m seeing it is it’s trying to futureproof the fund so that it actually does the things that they intend it to do, around making sure that it supports the sustainability, and making sure that it does the best things for ratepayers in that region.

There was one submission—I did have a read of it and I did hear contributions from around the House, and I think it was a valid concern around what happens if district boundaries change, because who knows what’s going to happen in the future as to whether there will be an amalgamation or a divvying up, or whatever. But I do reflect on what was discussed in the select committee via the reports around how, potentially, you could come back to actually address that particular aspect in the future. But leaning on the experience within the district council itself and its being able to sort of manage those differences, it can manage the movement of this stuff as well.

Also, I’m reflecting on what was said just before around clause 8. It is making sure that the management of this fund is independent—always very, very important—of those who are elected into positions of authority who have the power as well, and how important it is to be independent when you make those decisions. So that’s my contribution tonight, and the Greens support this bill.

Thank you, Madam Speaker. I hopefully rise to take a call on this bill, and I will join my colleagues in congratulating Mr Bennett in his ability to shepherd the New Plymouth District Council (Perpetual Investment Fund) Bill through the House.

It’s wonderful to hear everybody across the House struggling to be the one who has the closest connection with New Plymouth, but I’ve been a ratepayer there for a very long time and I remember when those Powerco shares got sold. It was really controversial at the time because, funnily enough, people were concerned that the fund might not make any money.

Sadly, in about 2013, when there was a massive drought in Tasmania and the farms that we invested in there—Mr McKelvie did point out there seemed to be some slight irony when you’re coming from the middle of dairy country. There was a massive drought in Australia and there was also the global financial crisis, and millions and millions of dollars fell out of that fund.

Alongside that, as we’ve also heard, the council realised the intention of that fund, which was to supplement the pressure on rates increases. So that ate away at the fund as well. That was problematic, and those genuine concerns—it was interesting because when we talked about Powerco, that was our local power company and there were two reasons why people were concerned. One was—it’s a long time ago now, but it’s interesting to reflect on the concerns as they were on the day—that the community owning those assets and having a steady return on investment that comes with owning a power company, versus the risk of buying, I don’t know, a dairy farm in Tasmania.

But the other important idea about community involvement in that decision making and the concerns, quite rightly, about the council’s ability to manage those funds. There was a lot of “I told you so” nearly 10 years later when some of those risks and some of those concerns bore fruit. So it is really good to see those lessons being learnt and the council taking its job very, very seriously and taking a long time to consult with the community, consider all of those alternatives, to come up with what they believed was the best way forward.

Of course, there’s two main aspects to the legislation. One is about how the fund is managed and how it is applied, and the second part being about the independent financial management. One of the wonderful things about the piece of legislation in clause 7: it talks about how it is applied, and the idea that the Perpetual Investment Fund (PIF) will be managed and used for the social, economic, environmental, and cultural wellbeing of New Plymouth communities is a wonderful sentence to read out.

We’ve just had a conversation in the dinner break, actually, about our world-leading living standards framework and the idea that while the critical thing—we need to have income in order to invest in our communities, whether that be rates or the return on our Perpetual Investment Fund—we need that cash, absolutely. But what we do with it is so important. For me, this is the highlight of this piece of legislation: the fact that they will be required—those independent financial managers aren’t just looking at the stock numbers going up and down and what the return is on investment; it’s actually what we do as a community to invest in all of our community in the New Plymouth District. That’s really, really exciting to me.

How do we make sure that it isn’t just about rates reduction but about taking those wonderful opportunities to invest in all aspects of our community for our wellbeing? We talk about growth and we’ve often talked about growth being about GDP, but, actually, growth of our communities involves their wellbeing. I’m really, really pleased to see this, and I think this goes to prove yet again how ground-breaking the New Plymouth District is and the Taranaki region is at really leaning into those just transition challenges. I think this is another really good example of how the legislation they put forward is really, really progressive.

Then the other thing, of course, is that independence. We know that the mayors at the time when there were challenges about, “Should we be selling up those dairy farms? Should we be hanging in there?” and at the very least a distraction from their core business, which was about focusing on what they did with the return on that investment.

So I will acknowledge—a lot of people have acknowledged—one of the biggest challenges that came through from the community was around the implications of potential boundary changes. That submission came from people who live on the boundary, the New Plymouth District. The boundaries to the North are in a wonderful part of the country, Tongapōrutu and Mokau on that beautiful west coast. I guess the community there straddles a couple of iwi—it’s a pretty competitive patch, actually—and they also straddle a couple of districts. So they’re very aware of the significant changes that can happen when you are potentially popped into another district and another district’s ratings or the return on the PIF. And I think that was a really, really valid question to ask.

Everyone’s assuming that the potential situation where that may have come up would be if there was a consolidation of those three mighty councils in Taranaki into one super-mighty council in Taranaki. But, of course, there are simply boundary shifts that can happen as well. So whether a council got bigger—so the decision a council then has to make about which constituents in that council miss out on the fund—or what happens if the council boundaries shrink and now you’ve got people who technically sit outside that council who will continue to actually have that investment that they’ve made over the generations being protected.

It is a really valid concern, and the council have told us that they’ve previously managed—dealt with—geographically limited funds, and maybe what it does is it means that what happens to those funds is really invested in a way that isn’t a very short-term, “let’s do a rates rebate”, because that’s really difficult. You know, my rates are different from your rates because you live on this side of the old council boundaries. But maybe it is that they are encouraged and incentivised to invest in things that will actually benefit everybody in the council.

But maybe there’s a bit of a flow-on effect. There are people outside of the New Plymouth District Council who benefit in an investment. We’ve heard today: WOMAD, the Festival of Lights, and all sorts of other aspects. Our libraries, our swimming pools get enjoyed by people who aren’t technically ratepayers or technically those who’ve contributed to the Perpetual Investment Fund. So I really like the potential that this legislation frames up. Most people look at these pieces of legislation and they think about triple A ratings, which are important but I like to look at the potential of humanity being involved in the decision making around here.

I note this is a local bill, as opposed to a member’s bill, and it’s really great that our wonderful friend Mr Glen Bennett has been able to shepherd it through the House. Like I say, I was there when those Powerco shares were first sold, and those investments and those hard lessons have been learnt by our community. It’s really great to see that the council has been honest and forthright and, frankly, confronted the shortcomings that came with the original way that that fund was managed and the challenges that presented. I think they have been really courageous in being honest about what they needed to do to improve things.

So it makes me pretty happy as a ratepayer, actually, to be standing here and supporting the PIF and the significant financial asset being protected and enhanced and making sure that not just me as a ratepayer but my mother, my mother-in-law, and my children are all going to benefit—and their children. And it is for that reason that I’m really happy to commend this bill to the House.

I believe this is a split call. The Hon David Bennett—five minutes.

Thank you, Madam Speaker. Well, I must admit I’m going to take a different sort of tack even though we are supporting the bill. You know, many times, councils and local communities give up assets that they shouldn’t give up. And I want to just use the Waikato as a little bit of an example and then translate it back to this. The Waikato Regional Council once owned a significant share of Tauranga port, and for their great wisdom they managed to sell it for bugger all and invested that in a fund for bugger all, when the actual port is now worth a lot of money.

ASSISTANT SPEAKER (Hon Poto Williams): Is that a new parliamentary word, is it, “bugger all”?

Well, it was bugger all they got compared with what it is worth now. And so that was the reality of what they did there and then. When we were in Government, 20 years later, we set up the fibre network through New Zealand and Auckland had its own one, Christchurch had its, and there had to be another company to give some competition and so we created one in Hamilton. Hamilton was the first city to get fibre in New Zealand. It was ultra-fast fibre. We made sure that Hamilton could have Taranaki and Tauranga in the contract and they could create a new TrustPower-type model that would be a company that would add value to the community. And we gave them that opportunity. We gave them that and then they sold it. They sold it for a couple of hundred—$800 million or something a few years later. Madness, absolute madness that was done by that community group because that business isn’t about just the money. It’s not the capital that’s there; it’s actually what it can do for a community. If it’s a corporate that’s of decent size like that, it can actually sponsor things, it can actually be a corporate player, it can be a Gallagher like in Hamilton where it actually gives some money back. Now all we’ve got is a fund that’s run by somebody in America, and the money comes back to a group of people that want to spend it on things, I hear, like cultural, social, environmental, and economic. Maybe take out three of them and just leave economic—would have been great.

But, you know, the reality is that these funds are a loss. They are an actual loss on capital. If that money is utilised, not only do you get the profit but you actually get the capital that could have been there in the business. And so I know it’s great to say these things are cool and we support them and all that, but the reality is these hurt communities in many ways when, if the community had held the asset, they could have done much better. Like look at Taranaki Powerco, whether you make that into an environmentally friendly green power company in the future or whatever you want to do with it, it’s still got a huge future ahead of it. It’s better than having it in a capital fund where you spend it on social, cultural, environmental and maybe some economic things.

And so, personally, I think these types of enterprises are a great failure and a missed opportunity for many of our communities that don’t want to take the risk of running an asset. And that’s fine, but there’s other ways you can manage that without the community having to run that asset. But don’t give up those assets. We did it in the Waikato around the Tauranga port shares. It was the worst thing the region’s ever done. We managed to get the region back growing because we built the expressway, but if we hadn’t have done that, we’d be back where we were.

Second thing was Waikato gave up the ability to have ultra-fast fibre that it could have created a business through the central North Island. That would have been a really significant business that they could have made into something even bigger and better. And they sold that at the wrong time and they missed out on that opportunity of having a business plus the dividend.

So I say to the communities: be careful in these kind of situations. The dividends are great; it’s fine. OK, you’ve got to be careful where you spend them. But you actually miss an opportunity if you give up the capital of the business as well, because that’s where you can actually do something really constructive if you’re looking at a green economy going forward or something like that. And a lot of the time, people get scared. They fear that they can’t manage these things. They give them up on the basis that it’s going to be too much liability for them. Devolve it to someone else that is a professional in that area to do that for you and you will actually be able to have the best of both worlds. You’ll be able to have that business that can be part of your community and you can have the dividend that you actually use, rather than just a fund which gets lapped up in other places.

Noa'ia 'e Mḁuri. Madam Speaker, kia orana. It is a pleasure to take a call on the local bill—the New Plymouth District Council (Perpetual Investment Fund) Bill, second reading, sponsored by my colleague the great MP for New Plymouth, Glen Bennett, which he says is the sunniest place in New Zealand. I’m from Takanini, so the things we have there is the home of the ANZ netball Robinhood Stars netball team. But I know many have said their relationship in terms of Taranaki. To be honest, I don’t have a close relationship. All I know is the local MP—I know the resident and list MP Angela Roberts, but I know it’s a great place because I looked at the list of All Blacks that they’ve produced as well—Waisake Naholo, we have a couple of the Barrett brothers who’ve played there, also we have Chris Masoe. So many other All Blacks that have done great work in our rugby system as well.

It is always great to see that there is a genuine relationship between local council and their local MP as well. And I want to acknowledge the awesome and hard-working effort of Glen Bennett as well. As a former local board member in South Auckland, it is very important to maintain those relationships with our central government colleagues in order to advocate and help our local communities, despite the political landscape in that area. And this is just a great example of that—the local MP doing his bit in shepherding this bill through the House.

This is my first time speaking on this bill. I don’t have the great privilege of sitting on the select committee—the Governance and Administration Committee—but I just want to acknowledge their work in the process of this legislation.

Just to reiterate the background of this bill—and I know many have, but just for the thousands who have tuned into Parliament TV, I just wanted to share that history with them. We know that the—

💬 Hon Member: It’s like an All Blacks game!

Yes. The Perpetual Investment Fund—or the PIF—was established on 9 November 2004, following the proceeds of selling their shareholding in Powerco Ltd. That has therefore provided a sustainable fund where the annual release has helped to subsidise the general rates for that community. If it’s working properly in terms of the medium terms of releasing that money, it is to make sure that the capital value is there to grow, and also to subsidise the rates. However, we know in the global financial crisis, following that crash, this PIF had lost $113 million in value over five years, which subsequently led to the council considering its options, leading to this bill.

I know that the NPG—or New Plymouth PIF Guardians Limited—which is the council-controlled organisation that manages the PIF, were one of the submitters who came through during the process. I think it was five submitters that came through. It’s not about quantity; it’s about the quality of submissions that came through. The district council, the NPG, Glen Bennett himself, and a couple of the other submitters commented on the different clauses to make sure that they had their voices heard. I just want to comment on the different clauses that make this bill the right way to proceed.

I know that clause 7 sets up the two principles in order to make sure this bill does what it’s intended to do. We’ve heard about the investment that this fund does in terms of the social, economic, environmental, and cultural wellbeing for our community in New Plymouth. Cultural because, again, we talk about rugby—that’s part of the social-cultural aspect of the community. And if that—

💬 Anna Lorck: Football.

Oh, football. Yes, that’s right. Just to acknowledge the Women’s World Cup that’s coming up in Aotearoa New Zealand, and the many communities that’ll be supporting our women, wāhine toa, during that process. [Interruption] Yes.

Clause 4 in terms of the boundaries—and we heard from our colleague from the Green Party Teanau Tuiono talking about making sure that boundary changes may happen in the future, but we saw that the district council did comment that they have managed it effectively and can do so if that was to happen as well.

Clause 8 of the bill is really important because we have NPG, the guardians, also supporting this clause because the clause sets it out to be independent, making decisions on the fund independent of the politicians or personal interest regarding the time period of releasing that fund. So it’s really good that the district council and the guardians that manage this bill through the select committee process have supported this clause to go through.

So that’s my connection to Taranaki, New Plymouth. I commend this bill to the House.

Thank you, Madam Speaker. I haven’t been on the Governance and Administration Committee, but I have been asked to talk on the New Plymouth District Council (Perpetual Investment Fund) Bill. First of all, I just want to acknowledge Glen Bennett for bringing the bill through the select committee process and, obviously, steering it through the House. The first thing everyone seems to be saying is what their connection is to New Plymouth, in Taranaki. Just for the record, the Baylys arrived in New Plymouth in 1842, on the Amelia Thompson, and many of my family live there. There are Bayly Roads in Taranaki! And, in fact, some of the early All Black teams had Baylys in them—talking about rugby. At one stage, the Taranaki rugby team was, I think, near majority made up of Baylys, but anyway. I’m going to stop there, because I could carry on. There have been mayors of Taranaki—whatever.

But, having said all that, my real connection to this, which I only just found out—I was talking about this earlier on. Prior to coming into politics, I had a business merchant bank, and a long time ago—it must have been 2008—we had an approach from a small fund called Taranaki Investment Management Ltd., who came to us and said, “We would like you to look at whether we should buy some farms in Tasmania.” This is a true story, and I’m only revealing it because I have been asked to talk on it. Anyway, they came to us, and we said, “Well, fine. We’ll do an analysis of it.” They were asking us whether they should buy the farms. So we said to them first of all, “Well, why don’t you provide us with all the due diligence material you’ve got.” They said, “No, we’re not going to do that. You’re going to do your own desktop review, and we want you to come back and tell us what you think.” So we did that, and I remember—I had a couple of people working on it—looking at long-term weather patterns for Tasmania. I remember ringing up stock agents in Tasmania to talk about access to cows, looking at genetic stock, where they were going to sell the milk to—all those sorts of things. We eventually compiled a brief, in terms of a business assessment, whether they should buy the 25 farms.

When we went back to present the findings to Taranaki Investment Management Ltd., we said, “Broadly, our conclusions are as follows: the first thing is you’ve got a relatively small fund”—and I forget what it was; $250 million—“and you’re proposing to spend most of that money buying one particular asset in one particular area. So, first of all, in terms of good funds portfolio management, that’s not a really desirable outcome. What you should do is diversify, and this is very large. So that’s our first big concern.” The second thing we said to them was, “We are concerned that you can buy this asset but how do you get out of it? How do you sell down your shareholding? That’s the big question. Who is going to go and buy 25 dairy farms in Tasmania—if you hold them for five, 10, 15 years? So there is a real risk about buying this significant asset.” And the third thing we said was, “If you get past those two things—and, by the way, our recommendation is you don’t—our price estimate is”—I can’t quite remember the figure; I don’t know whether it was $110 or $1.10 per share; I can’t remember—“but if you’re going to buy it, pay no more than, let’s say, $1.10 per share.”

Those were our three pieces of advice—I remember giving it—and, at that point, the investment management team said to us, “Well, thank you very much for what you’ve done. Very useful, very helpful. I’ve just got to tell you that not only have we committed to buying the farms but we’ve also agreed to pay, I think, $1.40 per share.” It was certainly much more. And, at that point, I thought, “Wow, substantial risk.” Now, I look at this bill and I have concerns about what this bill is about. First of all, it is described as “the PIF is a long-term fund … managed and applied for the social, economic, environmental, and cultural wellbeing”—of course, that’s all set out in clause 7. My first point is: to me, that seems a really weird definition. And it’s a weird definition in a sense that, if you are going to pay the money in the form of a dividend—and I don’t know why the bill refers to “releases”; it seems the most absurd definitional usage of the word. If you are going to use that distribution from the fund, why would you be transferring it in the form of allowing the council to offset rates? Because one might argue that that’s not necessarily meeting that requirement. So the first thing is the purpose statement in it.

The second thing: I’d have to argue that the way that the fund has been set up and defined in this bill is very unclear, and if I was a director on this fund, I would have a great deal of difficulty personally, because it states that “the PIF should be managed and applied with the intent of”—and this is the important bit—“maintaining or increasing the real value of its capital, unless the Council considers, on reasonable grounds, that [the benefit of investment outweighs the loss and the reduction in the capital of the PIF is best to achieve that outcome]”. Now, if you’re a fund manager—and I note that they’ve got Mercer managing this fund—“maintaining” and “increasing” are quite different. If you’re maintaining a fund, you’re going to put your money into low-security investments such as Government Treasury stock. The investment strategy around maintaining a fund is absolutely different from what you might do if you’re going to have a perpetual fund where you’re trying to use dividends or distributions to fund other social, economic, environmental, cultural wellbeing things. The investment strategy lacks an absolute clarity. And, personally, I find this bill very, very woolly. I think, if I was a director and asked to go on this entity, I would be looking at this and saying, “Who the hell drafted that?”

The third thing I’d have to say to you is that there is no definition—from what I can see—around dividend policy. I looked at what the dividends have been over the last few years. Sorry, I’ve only had the chance to do this quite recently—in the last 10 minutes, actually—but the level of dividends that have been paid out has ranged from $22 million down to $5 million. So having clarity for the investment fund to know what the policy around the release—or, in fact, the distributions—is, I think absolutely essential, because, working backwards, until you know that, you cannot know how to manage your investment decision-making and the nature of investments you’re going to have in there.

The fourth things that’s missing is that it doesn’t talk, really, about risk. It doesn’t provide absolute clarity around risk, and so we’ve ended up—and fine; the bill will go through—passing a bill which, I think, in time will prove to be actually quite deficient. Who has the ability to refine this up and grip it up to make it useful for the people who have actually got to manage this fund, I’m not quite sure, and maybe the select committee has worked through that, but it’s not evident from the documents. The other thing is, and I think I heard Barbara Kuriger early on talking about it, it does seem strange—the three options that the council looked at, to set this framework up for this bill, are that they lay out the three options. I’m just not quite sure why we ended up coming through the House and whether, in fact, it’s because, principally, the New Plymouth District Council didn’t believe that they could manage and work within the framework of requiring a 75 percent approval and therefore wanted to rely on the legislation. I’m not quite sure. I didn’t hear the arguments from the select committee members for why this is actually required, and maybe I missed that, and I apologise if I have

But this bill—fine; it’s going to go through—I actually think has got a huge amount of deficiencies in it, but it will, hopefully, get to an outcome which will mean that there is a long-term fund that offers long-term benefits to the good people of New Plymouth.

Thanks, Madam Speaker, for the opportunity to take a call on this bill, a final call for the night on this bill here. I’d like to begin by acknowledging the previous member, Andrew Bayly, for his speech and the fact that he talked about having All Blacks and mayors—because his lineage is only getting better as the member serves in this House, and maybe there’s still hope for the member to become an All Black one day. You never know—you never know what may—I see maybe not as much optimism as I maybe have. I’d like to also acknowledge Glen Bennett, the MP for New Plymouth, for bringing this bill to the House. And I’d like to acknowledge the work that he does for the people of New Plymouth and, hopefully, the residents also acknowledge his work.

So, basically, as we’ve heard, the bill, this relates to the Perpetual Investment Fund—or the PIF, as has been used in this House tonight. If we just go back to maybe—oh, I don’t know, basically a few months ago when the council were looking at this bill. From how I understand it, some councillors were concerned about the potential of amalgamations of councils. And so therefore they, basically, put up a motion to say “We want this bill. Well, basically, we need to pass a bill to ensure that this money is protected for the specific region around New Plymouth.”, because they were worried about the amalgamations. Other councillors said, “Well, there’s no rush. We don’t have to do this because there’s no amalgamations on the horizon.” So the council had that internal debate and the councillors voted eight to five to continue progressing this bill; that was on 22 August 2022. So the bill then came to the House through the mechanism of Glen Bennett, because those changes that the councillors wanted to make needed to go through legislation.

Now, I mean, I personally don’t see any sort of future work in the near future around amalgamations, but people will always argue the benefits of amalgamation in terms of shared services, and then people will also argue the benefits of having that local voice. And it was a similar argument around the affordable water reforms that we had as a Government—the benefits of the economies of scale, in terms of water, and then others arguing the importance of the local voice. Generally, as a society, we sort of meet somewhere where most of the people, you know, sort of accept it, and it seems like a similar sort of process happened here.

So we have heard tonight about the benefits of these sorts of funds in terms of social, cultural, environmental, and economic. Most of us who are MPs here would have these sorts of funds in our region. I think of the Waikato region, the likes of Trust Waikato, WellTrust, and D. V. Bryant Trust, who invest across a range of areas in society and they genuinely do benefit society.

I would like to touch as well—because I’ve heard a lot about the cultural, environmental, and social—on the importance of the economic aspect of that. The Taranaki region is a strong economic region of New Zealand. I have never lived there myself. I’ve never even had family there. In fact, my family, basically, came to New Zealand 1840, set up in Nelson—actually set up in Collingwood and—

💬 Angie Warren-Clark: We’re probably related.

There we go; we probably are.

💬 Hon Member: All Blacks.

That’s why we’re so intelligent. We almost had an All Black. One of my cousins was recently selected to the All Blacks but rolled his ankle. He’s only 28, so he’s probably got a better chance than the honourable—than Andrew Bayly. I called him “the honourable” there; I gave him an upgrade.

So, look—where was I? I was talking about the economic benefits of the Taranaki region. Now, I would encourage the Taranaki region to continue looking for partnerships across particularly the North Island and to grow their economic areas. We heard from the ACT member earlier tonight in terms of some of the strong aspects of the Taranaki economy. And I would like to encourage leaders in the Taranaki region and those who are administering this fund for economic benefits to look outside their region. I know: imagine, traditionally they tend to look south to Wellington or east to Palmerston North or, you know, they look at their port in terms of coastal shipping. But I would also encourage the Taranaki region to also look north as well for various opportunities—

💬 Ian McKelvie: We could run a port in Palmerston North.

An inland port in Palmerston North? Provincial Growth Fund—excellent fund.

We’ve heard about the “Golden Triangle”, the Auckland, Hamilton, Tauranga triangle, as it’s affectionately known, which is 50 percent of New Zealand’s population, 52 percent of the GDP, and 57 percent of all building consents. But I’ve started talking about, and I’ll mention it in this House tonight, about the golden diamond—so the golden diamond from that triangle—the Auckland, Hamilton, Tauranga triangle, and heading down through the middle of the island. I recently had a meeting at the Hamilton City Council with the economic development unit and encouraged them to continue fostering a relationship with the Taranaki region. I think there’s some excellent benefits in that region for economic development in terms of that golden diamond sort of heading down through the island there. And I think that Taranaki are probably already sort of seeing that. I think in 2013 they sided with The Chiefs, which I think, based on this year’s performance, was a good move in hindsight for them.

So, look, I’d just like to sort of, I guess, sow that seed and espouse the benefits there of the Taranaki region continuing to look north in terms of connection for business, in terms of connection for tourism, and the movement of people, the movement of products. I understand that there’s work being done around coastal shipping too, and, in terms of that relating to this bill, the PIF, one of the pillars is economic. So, you know, it’s important that they continue to take an economic lens in the decisions that are made in terms of the investment.

I’d also like to touch on broadly, as the previous speaker did, in terms of the investment of funds. Now, a lot of the funds in New Zealand have a portion of their fund—often a large portion—invested overseas. I understand the reasons why. It diversifies the funds. In effect, you could argue that it de-risks the fund to a point. But I do believe there’s an opportunity for some of these social funds here in New Zealand—and, as I said, most regions have them—while they will always have a portion overseas, to consider bringing a little bit more onshore.

Now, I’m talking about, for example, funds having a relationship with the likes of Kāinga Ora, and investing and building houses with the Government. So, you know, they could negotiate probably something like a 5 percent return on that investment. It’s a safe investment because it’s investment with the Government. So pulling some of that money offshore and bringing it into investments with the Government, then that money gets used twice. So in the example of Kāinga Ora, the money gets used once to build housing and then, secondly, with that 5 percent return, or whatever it might be that the Government gives the investment fund, they can also release that as a dividend.

I’d also encourage some funds to look at what they can do together as well. Now, I’m not sure how many other funds there are in the Taranaki region, but there are often benefits in terms of scale. Now, funds can do their own thing as well, but then a portion of their fund could also be connected to other funds. There’s a small example of this up in Hamilton recently, where we’re building a regional theatre up there, an $80 million regional theatre. I’m told it will be the best theatre in Australasia, actually, with 1,300 seats, so you’ll all have to come up next year when it opens. But this was funded through a number of funds coming together, as well as Government, as well as council coming together. And as we know—what’s the phrase?—items can be bigger than the sum of their parts; that as we look to come together, then we can achieve quite significant things.

I see my time is running out. I certainly commend this bill to the House. I believe it will pass, and if it passes the third reading, the council will then get their wish to move on with this. I commend this bill to the House. Thank you.

Motion agreed to.

Bill read a second time.