New Plymouth District Council (Perpetual Investment Fund) Bill

Members, the House is in committee on the New Plymouth District Council (Perpetual Investment Fund) Bill. We come first to the—

Point of order. I seek leave for all provisions to be taken as one question.

Leave is sought for that purpose. Is there any objection? There is none. The question is that Parts 1 and 2 and clauses 1 and 2 stand part.

Kia ora, Mr Chair, and thank you for this opportunity to address the House this afternoon. It’s been a new experience for me in terms of shepherding through this piece of legislation, the New Plymouth District Council (Perpetual Investment Fund) Bill, but I am grateful for the support not only of members across the aisle in this House but also, too, the New Plymouth District Council—to our mayor, Neil Holdom; to councillors who have pursued this piece of legislation; but then to their officials and the work that’s been done not only in-house at council but throughout the community. They had this open for submissions for a number of time.

I just want to, I guess, clearly remind people the purpose of what this is about today and why we need it in New Plymouth. This very much is around ensuring the Perpetual Investment Fund, the PIF, continues as a long-term financial investment for the benefit—and it goes across the board for us in New Plymouth: it’s the social, it’s the economic, it’s the environmental, and it’s the cultural wellbeing—not only for today and for the residents and ratepayers of New Plymouth District today, but it’s also holding it in perpetuity for the future, so for those who are to come.

In terms of what this is about, it is ensuring that it lasts, that it’s not used for vanity projects or for short-term gain. It’s around how do we make sure that the investment we have grows and continues to serve generations to come. Just a note that at the end of April, the fund was worth $349.7 million, and we look forward to seeing that continue to grow and to be drawn down upon each year to support the initiatives of the community, of the environment, of the cultural fabric of the New Plymouth District.

Thank you, Mr Chair, and thank you to the member, Mr Glen Bennett, for that initial statement.

I just wanted to underpin a couple of things, and perhaps ask Mr Bennett if he’s pleased we—in the past, New Plymouth District Council have actually had the fund running at a loss due to some investments which didn’t turn out the way that they were wished for. The bill now creates responsibilities that ensure the council must ensure that investment decisions are made only by persons designated or appointed by the council to make decisions on the investment of the perpetual investment fund. Does Mr Bennett see that as an improvement?

Also, just the second question for the member: while there’s new apparent plans for amalgamation, the New Plymouth District Council have expressed a desire to ring-fence this fund for their own ratepayers, as the capital came from selling their assets. National has spoken in favour of ratepayer assets staying in the ratepayers’ hands. We just would be interested in a comment from Mr Bennett on those two things, thanks.

Thank you, Mr Chair. You are right, there, Barbara Kuriger, in terms of the challenges. It’s almost 20 years since the fund was established. Early on, there were a few hiccups and a few investments that may not have been as helpful as they could have been—looking at farm investments as well.

We look to move forward. I could have brought some graphs and charts and props today, but I chose not to. But the good news is that in recent years, we’ve managed to pull things back. For the council themselves, they’ve been able to get things into a place. They have the Perpetual Investment Fund Guardians Limited, who are a council-controlled organisation who sit at arm’s length.

Currently—obviously, in terms of that situation—the mayor and councillors have no involvement. They’ve actually gone a steady-as-she-goes approach now, in terms of making sure that it’s not the big flashy Tasmanian farms that we invest in, but it’s actually looking at the bigger picture and the long term. So I feel confident that we have got the balance about right.

Secondly, the comment was around the size of the district. It’s very clear in this piece of legislation that this investment will be what the actual current District of New Plymouth is today. There is no talk of amalgamation, there is no talk of changing council boundaries—but if there were, then this fund will specifically be for the people who live within the current district of New Plymouth and in years to come.

I’ll just note that South Taranaki District Council, back in 1999, I believe, did a similar piece of legislation and it has the same effect that, whatever happens, which hasn’t—and it’s not been since 1989 that there’s been any change around boundaries—but that would retain for South Taranaki as well.

So I think us, in Taranaki, have some good investment plans and options to ensure the wellbeing and the future of our region.

Thank you, Mr Chair. Look, the ACT Party supports this bill. We believe that local government should be able to use their assets as they see fit and that where they have adequate democratic accountability for the use of their assets—whether they be financial or physical assets like the three waters—then that should be up to a democratically elected council and their officers to determine how those assets are managed.

I want to ask the member a couple of questions about how the fund is managed. Clause 7 lists two principles to govern how this would be achieved. The fund will be used for “social, economic, environmental, and cultural wellbeing”, and that’s fantastic because, of course, wealthy societies are able to afford to invest in social infrastructure whether it be swimming pools or libraries or childcare centres. Of course, wealthy societies are also able to invest in environmental outcomes, so that’s laudable.

But I’m interested in the concept that the fund should be managed with the intent of maintaining or increasing the real value of its capital, and I’m interested in the member’s perspective: would the member be comfortable with the fund investing in oil and gas production; or mining, including seabed mining; or offshore wind, for example—all of which have an environmental effect but which generate great wealth and add to New Zealand’s economic and social potential?

The Perpetual Investment Fund (PIF), the PIF Guardians Limited, they sit at arm’s length. That’s not, I guess, within my remit or requirement to do that. I’ll note to the member that yesterday, I think, the South Taranaki District Council actually came out very loud and clear against seabed mining, which was an interesting thing for elected members to do. In terms of when it comes to this fund, that is completely at arm’s length from the elected members to decide. They have their own policies and internal decisions to be made, and we will trust for them to do the right thing.

I will note that I think as we look to the future, green investment often is something that has been looked at more and more, whether you look at the New Zealand Superannuation Fund, which I know is looking at offshore wind options. So, obviously, it’s a space in that clean energy, which is profitable and has a future. So I’m comfortable with the guardians doing what they see fit to ensure that the fund continues to build and grow.

I’m wondering if the member is aware that—of course, there is potential for offshore wind investment to deliver clean energy and return a profit on the investment for the shareholders. But is the member aware that even though the Government’s professed its support for this type of technology, that in fact there is no form you can fill out to apply for an offshore wind farm in New Zealand; that the Ministry of Business, Innovation and Employment—the agency responsible for that—hasn’t developed the regulatory structure? So while we appreciate that the fund could be used for that, is the member aware that there’s actually no way we could do offshore wind in New Zealand yet, because the Government that he’s a member of hasn’t designed the regulatory system?

CHAIRPERSON (Greg O’Connor): I’ll allow the member to answer that, although obviously it’s off the topic of the bill.

Yeah, that’s what I was going to say, Mr Chair. It feels very off topic and, as an ACT Party, I’m not sure if you’ve actually read the bill. But it’s worth coming to have a look at, and what the bill is actually about. If you want to politicise it and play games, that’s fine. But that’s actually not what the bill is about.

I’m interested in the independent financial management. The member mentioned that the guardians do operate at arm’s length from elected members, and that sounds like a perfectly reasonable approach to take. Are there any environmental, social—what’s the G? Can anyone remind me what the G is of ESG? No.

💬 Hon Stuart Nash: Governance.

Governance. Thank you, Mr Nash. You see, it’s so hard to get your head around all the acronyms that tell people what a kind, cuddly, friendly investment is, compared to one that actually makes money—it’s hard to keep up. I don’t know what DEI means and I’m struggling with ESG, but would the member be concerned if the fund was to invest in businesses or activities related to oil and gas exploration or mining?

I will remind the previous speaker that that’s, I think, steering away from what this bill is about. This is around ensuring the perpetuity of this piece of legislation. If you want me to go there and speak around what the New Plymouth Perpetual Investment Fund Guardians—I know Mercer is one of their agencies that they deal with, of course, so they’re always being investigated and looked into. I have no concern, neither is it my concern to concern myself in those kind of discussions.

Parts 1 and 2 and clauses 1 and 2 agreed to.

Bill to be reported without amendment.

House resumed.

The committee has considered the New Plymouth District Council (Perpetual Investment Fund) Bill and reports without amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.