New Plymouth District Council (Perpetual Investment Fund) Bill

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

We’ve finally got here after not too long; several months of to-ing and fro-ing and working—I’m glad to say—across the House collegially to get to this place today. This piece of legislation is around generational investment for the people of the New Plymouth District. The New Plymouth District Council (Perpetual Investment Fund) Bill—or let’s just call it the “PIF”—will help to protect one of New Plymouth District’s key financial assets.

The PIF is around the release of a key cornerstone of the New Plymouth District Council’s financial strategy and approach. There are considerable benefits that I’ll talk about. Not only does the annual release help to reduce rates but the maintenance of the substantial PIF reduces the council’s borrowing costs and supports the council’s AA+ credit rating—and, of course, at this point in time, rates are something we talk about a lot. So it’s important to do everything we can to ensure that we alleviate the challenges and, hopefully, add some cherries and some good things on top as well.

I note there have been some questions on how the PIF is used, in terms of the general rates. Let’s just talk about supporting the social, the economic, the environmental, and the cultural wellbeing of the New Plymouth District. And this is simple, as we use this fund, because the council’s general rates funds support so many services and promote these wellbeings within our district.

The general rates are used by the council to fund things such as our beautiful parks, like Pukekura Park; like our Festival of Lights, which has gone on for decades and decades in that park; to fund our world-leading and award-winning coastal walkway; our wonderful and modern art gallery, the Govett-Brewster Art Gallery and the Len Lye Centre; Puke Ariki, our museum and our library. It supports our pools, it supports our sports grounds, our marae, and our urupā grants. It supports Venture Taranaki as well as—can I mention—the second round of the pop-up Festival of Lights, which is coming up very shortly, which is around celebrating and commemorating Puanga, or Matariki, as many of you would know it as, in other parts of the country. Also, look at things like our airport and Te Rewa Rewa Bridge, and things that we as a region, that we as a district, have been world leading in, have been champions and award winners of, and this PIF has been part of supporting our rates over many years, and I’ll talk more about that.

What this means is that a small amount the council gets each year from the PIF does provide the support for our community wellbeing. Because the PIF reduces the total rates requirement, it does make it easier for the council to promote wellbeing initiatives within our community, and I’m grateful to the council for that. It also significantly reduces the rates bill for members of the community, which is obviously an absolute blessing as we deal with the costs of living and other challenges facing us as a nation and as a globe.

I understand that the council has looked at the best use of the PIF release several times in the past and has concluded that the general rates are the most appropriate way to do so, by using the PIF to benefit as many members of our community as possible. The main alternative to using the PIF is to fund certain services or capital works, which means that the benefit of the PIF only end up being used by the users of those services or works. Now, I’m grateful that our council has, over the years, been very forward thinking, and I believe that this piece of legislation that they’ve brought to this House and that I’ve had the privilege of supporting and shepherding through, as I said at the start, is around that generational investment into the people of the New Plymouth District. It’s important to remember that this bill does provide some clear legal direction—that the PIF is to benefit the New Plymouth District community—but the bill then leaves the “how” to the council to determine into the future. That “how” is determined in consultation with the New Plymouth District community.

That brings me to my next point, and that is where the bill does not leave it to the council to determine its future. The thing is that the bill provides for the PIF to be used in a sustainable, perpetual manner and that the council will be required to manage the PIF in a way that maintains or increases its value. That means it should be growing and that inflation or other areas, where there may sometimes be small releases, are to ensure this fund is held in perpetuity. Now, I look back at when the PIF was first set up. There’s a history behind the electricity reforms of the early 1990s: we ended up with an organisation—Powerco—that council owned the majority of shares in. In the early 2000s, that was looked at, and the diversification of the investments was looked at by the New Plymouth District Council. Then, the decision was made to sell off Powerco and set up the PIF. It began with about $259 million and, as of just a few months ago—this year—it’s sitting with $349 million in it. We want to lock that in to ensure that future generations will benefit from it. That’s why we look at a rather conservative release of around 3.3 percent of the PIF on the year on balance. And, of course, this is the market reality. We need to be cautious; we need to be careful to ensure that future generations will benefit from this fund.

We also want to acknowledge that the PIF is there for those tough times, for the vulnerabilities that we have as a region when it comes to natural hazards and other disasters. We look at what’s gone on with cyclones on the East Coast, and we look at the challenges that we face on the West Coast. And we also look at all our beautiful Taranaki maunga, which is standing tall—standing tall—looking over us and looking after us, but we also know that the numbers have been done and there’s a 50 percent chance in the next 50 years that that mountain could erupt. If and when it does, we have checks and balances in place with the PIF so that we can ensure that access is there—not for the sake of vanity projects or elected members showing off but for any needs when it comes to a crisis or a challenge. To activate the exemption process would require the council to first be satisfied that, under the bill, doing so is the best course of action for the benefit of both the current and the future communities. Well, that is not easy to do. It clearly applies to recovering from those major, once-in-a-generation events, and we have that in place.

Second, council would need to modify the governance deed with the New Plymouth PIF Guardians. Doing so would require a 75 percent majority vote of our councillors, again ensuring its safety. The bill therefore puts in place a strong legal test, which is then followed up by the existing strong political test. These combine into a double locking of the PIF to ensure that the council and community have certainty around this financial asset.

Finally, I want to acknowledge all of those who have been involved in the work on the PIF. I know that we have His Worship Mayor Neil Holdom with us today; we have Gareth Green, the chief executive of council; we have Joy Buckingham, group manager corporate services; and Greg Stephens, the senior policy adviser, who has been more than overly helpful and supportive, both to me in this process and, I know, to the council. To Jonathan Salter and to Mark Butcher, the chair of the New Plymouth PIF Guardians, we say thank you for all the work that you are doing to ensure that the region, the district of New Plymouth, has this investment. Generations before have been wise with their investments to ensure it’s in place, and you are ensuring that you are doing what is right and being wise for generations to come. So I thank you for that, and I commend this bill to the House.

The question is that the motion be agreed to.

Thank you, Mr Speaker. Thank you to Glen Bennett for shepherding the bill through the House, and also for a comprehensive 10 minutes where, really, the virtues of New Plymouth and Taranaki have been espoused. Towards the eight-minute point, when you started talking about the Taranaki maunga perhaps erupting, I have to say that living just around the corner from you—I hope that you have a boat, because if that eventuates, I’ll be running around the corner to see you and jump in your boat! I’d like to acknowledge Mayor Neil Holdom and the team who are up in the gallery. This has been a good process, run through the Governance and Administration Committee under the watch of Ian McKelvie, who is here today.

Really, as Glen Bennett said—he’s really covered it all, and I’m just really here to say that National supports the bill. We support the fact that the council will be putting independent financial management in place to make sure that all the decisions are made only by people that the council appoints. Generally, the fund has gone very well—it has had its moments in the past where maybe it hasn’t gone so well, and maybe investing in dairy farms outside the beautiful New Zealand structure might be a lesson and learning for us all, given that we’ve got some of the best dairy farms in the world.

Beyond that, I’m not going to add a lot to this, other than to congratulate the council—and just put in a plug for Inglewood, Urenui, and all of the towns that I represent in the wonderful Taranaki-King Country electorate that are akin to New Plymouth; not quite inside it but still part of the New Plymouth Council. We look forward to working with you and, as we go forward with this fund, making sure that it does perpetuate into a real perpetual investment fund that contributes to the whole of the district. Thank you, Mr Speaker.

Thank you, Mr. Speaker. It’s a pleasure to take a call on the New Plymouth District Council (Perpetual Investment Fund) Bill. As the proud MP for the true sunniest part of New Zealand, Nelson, earlier this year I gifted my wonderful colleague the MP for New Plymouth, Glen Bennett, a little box of sunshine from my electorate just to show that, while we may have some things in common, both coming from provincial centres, it is Nelson that deserves to hold that true title of the sunniest part of New Zealand.

It was a pleasure to sit on the select committee that considered this bill, the Governance and Administration Committee, and it was a useful exercise for us to understand the process that the New Plymouth District Council has followed to get to this point. Can I commend them on bringing a bill to the House. It is unusual to bring private and local bills to the House, and this term of Parliament has seen quite a number of them. Following the final reading of this bill, I’ll have the pleasure of talking to a private bill from my electorate. So we are seeing a number of these bills—I see Mr Penk across the House with his private bill that my committee is also looking at—going through the House at the moment.

But may I just talk to what has led to this bill, in terms of the history of it, and Mr Bennett did cover some of that, but I wanted to talk to that a little bit more because it explains the need for there to be a mechanism. The council has chosen this mechanism—but there could have been a number of mechanisms—in order to protect this fund. The fund was originally worth $259 million and it emerged following the sale of the Powerco shares in 2004. It was designed to enable the council to do two things: one was to invest in services and organisations that benefited the social, cultural, and economic potential of the district. There was also an intention for the fund to reduce the rates of ratepayers. It’s a very topical issue at the moment, where we know we have—

💬 Todd Muller: Cost of living.

Actually, Mr Muller, we know that for many years our councils have really struggled to invest in their infrastructure, and this is something that has been building for some time. So I can understand why both the council and the ratepayers of this district could have seen this opportunity and thought, “Yes, this is a great opportunity to help reduce the rate burden for our community.” But what happened, which has been traversed a wee bit throughout this bill’s passage, was some investment decisions were made that were perhaps unwise and not necessarily prudent or led by those who are independent enough to be able to make decisions in the best interests of the fund.

That’s one of the challenges with any fund of this nature: it can be a sizable amount of capital sitting there and communities will rightly want to call on it for projects and to do things with it and to make investment decisions. But what I know that the council understands, and has spoken to the committee about, is the need to ensure that the fund remains in perpetuity. So there is both the need to do the investment but also to ensure that the investment decisions are sound and are put in place by those who have that ability to make those financial decisions in the best interests of the fund. The fund dipped down—it lost over $100 million—which for the community would have been devastating. I think a fund like this is the envy of so many of us; I would love to have a fund of this nature in my communities. And so that would have led to, you know, a real sense of dismay amongst the community. That is what has led—and I want to commend those who are in the gallery today from the New Plymouth District Council—to this process.

I’m just going to talk a little bit about how those investment decisions will be made under the bill. 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 (PIF), acting independently of members and those members’ personal or political interests. But the investment decisions must be made on a prudent commercial basis, in a manner that is consistent with best practice portfolio management, maximising return without undue risk to the PIF as a whole, avoiding prejudice to the reputation of the council and the New Plymouth District community. It does say here—and I think possibly a little bit of caution around this—that nothing in the Act limits or prevents investment of the PIF outside of the New Plymouth District. I do note comments earlier around investment in overseas farms, and I think that’s probably something that I’m sure the council will be considering when investments are made of this nature.

There’s another point I just wanted to bring up, which came through from some submitters on this bill, that I think is important just to respond to and ensure is noted in the Hansard as part of the passage of the third reading of this bill, and that is around the application of the funds wider than the New Plymouth District. There were some submitters who felt that if—and it is a potential, which is a hypothetical, not something that is actually going to happen, but that if—a merger of councils were to happen in the area, this submitter’s view was that the PIF should then be able to be used for the benefit of the fully merged councils that could emerge into, you know, some type of larger authority. The view of New Plymouth District Council—and the view of the committee supported that view—is that because the investment in this fund came from ownership through New Plymouth District Council, through the sale of those shares, it is appropriate to ensure that there is a ring-fencing of those funds for the purpose of those who reside in the New Plymouth District Council catchment area and the ratepayers of that area.

That’s not to say that a decision couldn’t change in the future, and that’s not a decision for this House. That is a decision for those who are the caretakers of this private bill—the New Plymouth District Council—but that certainly could be changed, potentially, through a High Court order or through an amendment to the bill in future if such a hypothetical were to occur. So the committee felt that that was a fair position for the council to be holding in terms of how those funds are appropriated. I myself have a connection to some of these areas that have received—

💬 Glen Bennett: Go on, tell us.

I will tell you, Mr Bennett, I will tell you—

💬 Glen Bennett: Because you want to move there.

No, no, I don’t want to move there. Mr Bennett has just asked if I wish to move to New Plymouth, and I can assure him I do not. We will have a shipping route joining us shortly, a shipping route move between New Plymouth and Nelson, which I understand is on track to commence shortly, which is very exciting. But I don’t think I’ll be taking it to permanently join you there Mr Bennett.

But the very first time I was privileged to sing as a member of the New Zealand Youth Choir was actually at the TSB Showplace in New Plymouth, a theatre that I understand has received financial support from the PIF. So I am a person who has benefited from some of the fantastic—

💬 Glen Bennett: Sing for us.

I’m not going to sing for you in the House, Mr Bennett. I must admit it: I’m a bit rusty these days. But what we know is that investing in these types of activities, these types of organisations, really helps to lift a community in terms of its social outcomes, its economic outcomes, and its cultural outcomes. And I know that, with some sound investment, with ensuring there is that independence sitting around the fund, the Perpetual Investment Fund, commonly referred to as the “PIF”—provided it has that sound independence in terms of how it’s managed, I am very hopeful and assured that it will continue to support and grow the New Plymouth community. It’s an excellent bill. I commend my colleague Glen Bennett on its passage through the House and, on this lovely evening in Parliament, I commend the bill to the House.

Mr Speaker, when you’ve been around as long as me, you don’t have time to waste on a lot of words, so I’m not going to take a lot of time of the House! But I have to break into the peace—the peace that’s broken out across the House—because I think it’s worth going back in history a bit. Of course, I go back to the time of Peter Tennent and the start of all this stuff, and he was quite a big man and he dwarfed me—but that’s got nothing to do with this.

The real issue I want to raise is the issue of peace in the House. I’m an ex-Tui shareholder, and I well remember there were no friends made between the Taranaki and Rangitīkei in those days. It was quite a divisive argument. Of course, the New Plymouth City Council, I suppose it was in those days—or the district council—then went off and bought a whole lot of dairy farms, and having effectively undermined the whole of the dairy farmers in the Rangitīkei, they then went off and brought a whole lot of dairy farms in Australia for goodness’ sake—in Tasmania. So I suppose that that actually is the start of, I guess, what’s got to this bill, because certainly this bill will straighten out the investment principles of that fund.

As has been well documented in the House today, this went through the Governance and Administration Committee, and I think it’s a very good piece of legislation, and it will protect, at last, the significant amount of funds that the New Plymouth District got out of the Powerco shares sales. Of course, very briefly, a number of us will remember every region or district that had Powerco shares treated them in a different manner. In my part of the world, they paid out—I think it was $1,200 per Powerco shareholder—and it was all gone within a week. At least in New Plymouth the district has retained that fund. So that’s all I really need to say on the issue. It’s been well documented by Glen, Barbara, and co., and that’s my lot. Thank you.

Thank you, Mr Speaker. I rise to take a call on the New Plymouth District Council (Perpetual Investment Fund) Bill. I’ve possibly been paying rates in the district longer than most members in the House, so it’s great to be able to stand here and bear witness to this process.

We have heard a bit of the history. I can remember in the 1990s when those Powerco shares—the idea of holding those shares was definitely about the dividends being used to reduce the rating requirements for the district. That seemed like a good idea at the time. And then what happened, of course? The idea was to sell those shares so that there could be some diversification, because anyone who knows anything about good financial management knows that you don’t rely on one investment, and diversification, of course, reduces exposure and risk. And, of course, there is a very clear commitment to protecting that investment in perpetuity for the benefit of current and future ratepayers in New Plymouth.

Unfortunately, with the sale of those shares, as we know—we’ve heard about the investment in the largest dairy farm in Tasmania. And I’ve heard the distress from the other side of the House that there was a perception that investing in Aussie was a really great idea, and, of course, it didn’t quite prove to be as sensible as they hoped. The interesting thing was that, at one point, that investment was approximately 60 percent of the portfolio. So, while the intent was to diversify, in the end, by investing in the Tasmanian dairy farm, they ended up consolidating again, and that risk, that exposure, was very much exacerbated when we had the global financial crisis. Those challenges of the decrease in the fund to be able to deliver on rate reductions was significant, and, of course, we saw it move from subsidising 30 to 40 percent of rates down to around about 10 to 15 percent.

It was really controversial at the time, and I can remember the grand promise from the chief executive, when we had the sale of Powerco, that by 2020 we would be earning so much from that fund that, if the council so chose, it would no longer need to ask the ratepayer for the annual $25 million worth of general rates money. We were promised no rates. Well, it didn’t quite work out that way. So it’s really great that we had really forward-thinking, visionary, and ambitious council members who did the opposite of what the member across the House talked about in sort of just saying, “Cash it up.”, and it all being gone in a day. The intention was magnificent; it didn’t quite play out that way. So this bill is a result of trying to ensure that the fund is protected, that it is able to be invested wisely, and that there are really clear directions around what happens to that fund.

I need to commend the council for making sure that they consulted widely with their community, and there were challenges and questions raised about how best to protect that investment and what that structure might look like. A lot of work went into looking at all of the options and sharing those options and discussing those options with ratepayers. Then there were questions also about what we do with the returns. Generally, those returns have been used in a general rates reduction.

Clause 6 very much talks about what happens with the Perpetual Investment Fund (PIF) and how it benefits the New Plymouth District. There were some challenges and some questions—and they were really valid ones—about what happens if the boundaries change. The assumption is that the most likely scenario is that the New Plymouth District grows and there is a consolidation of districts across Taranaki, and so they looked at other districts who have similar arrangements for how they have managed funds that have been generated by their ratepayers and how they had been geofenced to protect them. But there hasn’t really been a solid discussion—the question was raised at select committee—about what happens if there’s a boundary shift and people who live currently within the New Plymouth District are suddenly not part of the New Plymouth District. I don’t know why there would be any community who would want to leave the New Plymouth District, but what would happen if the northern boundary shrank, for example, and, say, it moved down to Waitara and those that lived east and north of Waitara were no longer part of the New Plymouth District?

There are potential challenges, but the great thing about a committee process is that those questions get asked and they are answered, and we were reassured that there are ways to make sure that the people who have contributed to that PIF over the years will be the ones to continue to benefit. I think the wording of clause 6 is helpful. While at the moment it’s generally about a rebate, it does say in the clause that “The PIF, or any part of it, must be managed and applied by the Council only for purposes that the Council considers, on reasonable grounds, are wholly or principally for the benefit of current and future communities of the New Plymouth District.” I think that wording gives some permission for the benefits and the investments that come from the returns of the PIF to be thoughtfully done with not necessarily the immediacy of a rates rebate, for example, but an intergenerational investment—an intergenerational investment—whether that’s around sustainability or whether it is around investments that will make sure that our future generations are catered for. So I’d like to think that that wording actually empowers and enables the council when it is deciding what to do with those funds, even though there is a hard geofence around that district—that there will be ways of accommodating those ratepayers if, in the future, they are not part of the district.

I do need to acknowledge my colleague Glen Bennett for the hard work that he’s put in in shepherding this through the House. I do need to acknowledge the council and the good people of New Plymouth, my fellow ratepayers and community members. It is a fabulous place, and I know that we claim the sunshine hours, but I live in a part of the New Plymouth District that also claims some pretty good rainfall records—a couple of metres a year. Water is a precious thing, and where I live, of course, the geography of the maunga is such that it is a wonderful asset, actually. It makes sure that we have this beautiful rainforest, and we have some beautiful farm country.

This bill makes sure that we don’t repeat the mistakes of the past. In the past, we have put all our milk into one tanker, and it didn’t pay off for us, so the ability for the fund to be managed in a way that is prudent, that is commercially viable, and that is intergenerational in its management of the portfolio is a really great thing. I’m proud to be a resident of the New Plymouth District and of the Taranaki-King Country electorate. It is a fabulous place to live, and that’s why I’m really, really pleased to see how the community has taken this issue really seriously and has come up with something that will stand the test of time.

I think that our leadership in issues, such as a just transition—not just nationally but internationally—is another example of how we are able to think about the implications of decisions that are made not just for today but intergenerationally. I know that because I go to my public library in my local village on a Saturday morning with my children, because I know the council believes in investing in our communities. I know that I can take my children to our local pools. I know that we’ve got fabulous parks—obviously Pukekura Park, which is significant enough to be a Monopoly position. And it is because of this wonderful visionary, ambitious place that I love that I commend this bill to the House

Thank you, Mr Speaker. I just want to acknowledge the hard work that His Worship the Mayor, Neil Holdom, the Mayor of New Plymouth District Council, has done to facilitate this bill, and why ACT will support it. The Perpetual Investment Fund currently holds about $300 million in a diversified portfolio. That fund, that portfolio of assets, actually started off with the sale of council’s ownership in Powerco—a power lines company; an electricity distribution business.

What foresight did that council have by diversifying its asset portfolios beyond the single infrastructure business that it had inherited after that champion of free-market liberal reform, the Hon Max Bradford, reformed the electricity industry in the 1990s and gifted many of these local government organisations a power lines company that was previously in council ownership and control but was broken out as an independent entity. What foresight New Plymouth District Council had to then sell that and take the proceeds from that sale and apply them to a diversified portfolio of assets, which currently includes fixed income—cash, that is; private equity; and alternative assets—property, infrastructure, and hedge funds. Well, that’s the kind of thinking—that’s the kind of forward thinking—that ACT would encourage New Zealanders to get behind, and that’s why we’ll be supporting the New Plymouth District Council (Perpetual Investment Fund) Bill. Diversification of your asset base equals greater resilience for communities like New Plymouth.

It would be fair to say that we’ve heard a lot about New Plymouth’s weather today. We’ve heard about New Plymouth’s natural hazards. All of those things actually add up to further justification for why a diversified portfolio held by the Perpetual Investment Fund makes much more sense than selecting particular asset classes because they’re politically popular or lecturing asset owners about why certain classes of assets or investments are appropriate or not, as we’ve heard from other members in the House today. ACT says that the choice of assets, the choice of investments for the Perpetual Investment Fund of the New Plymouth District Council, should be entirely up to that entity. With that, we wish New Plymouth District Council all the best, His Worship the Mayor Neil Holdom all the best, and we will be supporting this bill.

Tēnā koe e te Mana Whakawā. Firstly, I’d like to acknowledge Mayor Holdom, as I understand he is here with his team in the House. Mihi ana ki a koe e te rangatira. I had the pleasure of meeting you for the very first time last Saturday at Te Rā o Tā Māui Pōmare.

It is great to take a call on the third reading of the New Plymouth District Council (Perpetual Investment Fund) Bill, which is sponsored by my colleague Glen Bennett MP. Again, I commend my colleague Glen for his sponsorship of this bill. New Plymouth sits in the Te Tai Hauāuru electorate, where I am based as an MP. While I live at Rātana and was raised in Whanganui, I have strong ties to Taranaki by whakapapa and by whenua and have close whānau that still live there. Whilst a district councillor, I heard the calls of many ratepayers over many years who have struggled to pay their rates. This can go some way towards helping to support and, perhaps, take a little bit of the anxiety out of this annual cost for each and every one of us in this country that own a house or residential home.

Just a bit about the background—I know you’ve heard it all before, but let me just say that this is clearly something that needed to be done. The fund’s original intent of being a sustainable fund to annually subsidise these rates was not achieved. It is sad to see the loss of some $113 million in value over those five years, but I celebrate this bill because of what it is now going to achieve, and that is the original intent. I’m grateful for local government in terms of their long-term planning, for that process helped the council to identify and land with the establishment of this bill. That was in 2021; the offices there, during their long-term process, reported on introducing a local bill in order for it to achieve its original intent. The benefits of that were all about living in this current district boundary: providing legislative protection to its capital base and its benefits back to the communities in perpetuity.

I want to acknowledge the work, again, of the council officers. Many are passionate about what they do, they are hard-working, they are diligent, and sometimes they are not recognised for the contribution that they make to our communities and local government; I say ngā mihi nui ki a koutou—thank you. Due diligence was exercised in terms of a process, alternative options were considered—including doing nothing, which of course was not an option, as it would not have achieved its original legislative protection on the capital base. Council also considered other local legislation, including the New Plymouth District Council (Waitara Lands) Act 2018.

I have seen the vision of the New Plymouth District Council, and I’m very excited for them. Their vision is to be a “sustainable lifestyle capital”—great slogan there, Mayor Holdom and councillors. Their district offers so much to the people that live there: spectacular natural beauty from Maunga ō Taranaki ki Tangaroa—that’s from the mountain to the sea; thriving towns and communities; and a productive rural sector. How will they do this? They are looking at doing this through partnerships, through delivery of quality services, through community, wellbeing, sustainability, by nurturing prosperity, by being resilient in building it. I see this as helping them towards achieving their vision.

The bill ensures the Perpetual Investment Fund (PIF) continues to benefit their communities in a number of ways—that is, by setting an annual release to be used to subsidise those general rates. In 2022-23, the release was around $10.4 million, which helped to reduce those rates required by around 8 percent, a savings of $163 per year, per ratepayer—I know how big that savings is for many, many people, including myself. The release enables the council to also provide a level of service higher than what they could afford through just your ordinary rates processes. The bill acts as a key cornerstone for our financial position, providing halo benefits. It means that council has financial assets larger than external borrowings, which is reducing the cost of borrowing. I’m pleased to see and support the AA+/Stable/A1+ credit rating that this offers.

I have talked before about embedding the lessons of history while being flexible for the future. What does this actually 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 the future communities of New Plymouth. It also means that it cannot—and this is important—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. That is really important, particularly in the environment of climate change that we live in today.

To avoid any further losses, it is important to ensure the real value of this capital is protected and that any reduction be considered under justifiable situations. They were very clear: had to be justifiable situations. It is to that end that I emphasise a submission from New Plymouth PIF Guardians Limited, that they “[support] the intention of the bill to provide the statutory provisions to ensure the real capital value of the fund is continuously maintained or increased, and to ensure it continues to be used for the New Plymouth District community, in perpetuity.” Of particular relevance in terms of this, they actually outlined this in clause 8, where “[it] provides that investment decisions are to be made independently of Elected Members and their interests. The clause provides additional assurance on the independence of [New Plymouth guardian] to manage the PIF in the best interests of the New Plymouth District [Council].”

Again, the case in point here is it provides that investment decisions are to be made independently of elected members. Council has also considered establishing a trust to hold the PIF, with council having trustee obligations to use, for the benefit of the New Plymouth District Council to be maintained in perpetuity—of course, the main problem: that would remove the PIF from the council’s balance sheet, which significantly reduces council’s credit rating and increases its borrowings and its insurance costs. It would result in council exceeding its net debt limit.

Just for clarity, and just very quickly in summary, what the bill does: it defines terms used in the bill; it provides the enactments applicable to the council’s financial management responsibilities and accountabilities. Clause 6 provides that the PIF is to be managed and applied wholly. Clause 7 talks about and outlines the principles of managing and applying the PIF. And clause 8, of course, as mentioned, sets out the requirements of that investment. I am pleased to be able to commend this bill to the House, and heartfelt congratulations to everyone involved to make this happen: the ratepayers, the communities of New Plymouth, and, of course, the council. Kia ora koutou tātou katoa.

Thank you, Mr Speaker. Tēnā koe. The Green Party supports the New Plymouth District Council (Perpetual Investment Fund) Bill, and we acknowledge Mayor Holdom and others from the council who are in the gallery.

Coming from Ōtautahi/Christchurch, the city council there had the wisdom to retain assets like the Christchurch International Airport Co. and the Lyttelton Port Co., and, through Christchurch City Holdings, is able to receive quite significant dividend returns from those enterprises, which does reduce the amount of rates that residents have to pay. Similarly, if the council hadn’t sold off Powerco in 2004, it may have benefited from the dividend returns from that company. Nevertheless, it did.

This bill is a sensible and short bill that does provide that the returns from the fund will be maintained so that they’re not overpaying to the council to reduce rates, but maintain the capital value of the fund. It also has some criteria around investment decisions in that they must be on a prudent commercial basis, and I note the provision that they must be in a manner that is consistent with “avoiding prejudice to the reputations of the Council and the New Plymouth district community.” I would hope that that includes ensuring that the fund is investing in activities which reduce emissions—which is consistent with reducing climate pollution—and moving to a more sustainable future, and not activities which might bring the council into disrepute because they are very emissions-intensive or do things like promote environmental degradation.

The bill will ensure that the fund revenues do continue to be used for the benefit of the New Plymouth District for present and future generations. I commend Glen Bennett and what he has done to shepherd the bill through. He and others have described in detail the many attractions of New Plymouth and the Taranaki District, so I will just end by commending the bill to the House.

Thank you, Mr Speaker. I am very happy to take a call on this bill. Can I just thank the submitters into the process, thank the Governance and Administration Committee, who examined the bill, and thank the few people that submitted on it. It’s not a huge bill, but obviously it’s very significant for the people of New Plymouth, in wanting to make sure that this perpetual investment fund that they’ve got is actually fit for purpose now and into the future.

I connect with this bill, actually. For some years, I sat on the Rotorua Energy Charitable Trust, which came from the sales of power shares back in the day. That was an investment fund that was put in front of the community. We grew that pot as a community over the years, and now it is a very large sum of money. It’s very carefully looked after by a very capable board of governors that sit over the top of it. So I know the benefits that this can produce. I know that, at home, our Rotorua trust distributes around $4 million a year back out to the community in a safe and responsible way to ensure there’s the vibrancy and there are facilities for the community to play sports in, to do recreation in. Those kinds of things make a real difference for a community, and I can only imagine that this bill is going to be able, again in New Plymouth, to create a really responsible management over the fund, make sure that it doesn’t deplete too much, as we saw in the global financial crisis, and ensure that the people and the whānau, the community that live in New Plymouth, are able to have a fund which is theirs and that is looked after for their own benefit and purpose.

Just a grand total of five submissions—one from the New Plymouth District Council, one from New Plymouth Perpetual Investment Fund Guardians Ltd, one from the very capable MP for New Plymouth, who’s going to win again after October the seat of New Plymouth—

💬 Hon Member: Go, Glen Bennett!

TĀMATI COFFEY: His name is Glen Bennett—a very, very capable member of Parliament and, actually, responsible for championing this here through the House. He is the sponsor of the bill, and he did make a submission. Then there were a couple of individual submitters that jumped into that process as well. The general feeling was that they supported the bill. They wanted to ensure that the Perpetual Investment Fund was appropriately managed and that investment decisions were made independently of councillors and their interests.

I want to use this as an example too. In my time sitting on the Rotorua Energy Charitable Trust, one of the things that we were really certain about was making sure that it wasn’t a slush fund for the local council. We wanted to make sure that, actually, it was a fund that was for the community, from the community, and having councillors in there kind of made it—you know, there were a few members of the community that were really concerned that it would actually just end up being another bank account for the council to be able to use. Knowing that we had submissions into the process that talked to that—that really prioritised having that independence from council and independence from councillors—I think is a really important point to note. So this is a good piece of legislation. It’s come before the House. I thank the few people that submitted into the process. I thank the New Plymouth District Council for bringing it in.

I’ll just chuck in my little New Plymouth story as well, which is that my whānau—the Coffey name, actually—comes from Rāhotu. We have a lot of whānau that still continue to live up there and the name has carried on through the generations. New Plymouth is a beautiful part of the country. It deserves the very best and, for that reason, I commend it to the House.

The next call is a split call. I call Tama Potaka—five minutes.

Before I get started, I just wanted to acknowledge the passing of Whetumarama Wereta, an absolutely legendary person of Aotearoa who was on the Picot task force and also the Royal Commission on the Electoral System and married to the noble Tumanako Wereta. Matua te tapu. Taranaki Maunga, tū tonu rā mō ake tonu.

[Sacred father. Taranaki mountain, for ever stand before us.]

Thank you for the opportunity to speak at this third reading of the New Plymouth District Council (Perpetual Investment Fund) Bill. I want to acknowledge my colleague in the House here, the MP for New Plymouth. He and I have a couple of things in common. We both love Surf Highway 45, and we both love Taranaki Maunga. He, though, is a Waitara Bears fan; I’m more of a Coastal Cobras man, to be fair.

National supports this bill. It comfortably sits with our party’s view that local communities retain responsibility for local challenges and support their communities with diverse and stable revenue flows. Local assets staying in local hands—remember that, local assets staying in local hands.

The purpose of this legislation is commendable: to ensure that the Perpetual Investment Fund continues as a long-term financial investment for the holistic wellbeing of current and future communities of New Plymouth; social, cultural, economic, and environmental—sounds like a Tā Mason Durie tapa whā model to me.

Long-term investment that is required across a number of Government and non-Government organisations, iwi incorporations and trusts, and charities must all consider the long-term demands that they have on their time and their cash. As a shareholder and committee member of the illustrious Parininihi ki Waitōtara Inc. (PKW), one of the biggest investors in Taranaki, I too recognise the value of the recalibration that this legislation brings, Mr Bennett. Without these organisations, like the fund, like PKW, the councils, and the values that underpin them, our cities, our whānau, our communities, our towns, our country would be far less well off.

To that end though, what I will say is that clause 8 of this bill does look suspiciously like the mandate of the New Zealand Superannuation Fund. It looks like an almost copycat enterprise, and our fellow Greens member over the way was talking about reputation issues—well, I’m sure that the super fund is very interested in wind investments and other things that are happening in Taranaki, and the sooner the better.

I won’t take much longer but to say that we support this bill, and I look forward, Mr Bennett, to Ōpunake being labelled the best town in New Zealand. Kia ora. Ka kite.

Tēnā koe, Madam Speaker. It’s a real privilege to speak on this important local bill, which the member for New Plymouth has championed through this House. I acknowledge all of the members of this House who have spoken so warmly of New Plymouth and of him and of our guests in the gallery today. I acknowledge His Worship Neil Holdom the Mayor, Gareth Green chief executive, Joy Buckingham, Greg Stevens, Jonathan Salter, Mark Butcher, and Sarah Vrede. It is a real privilege to be having this debate about the health of a region we all care about, with you to join in our conversation today.

I’d like to pick up on a point, which has been touched on by a number of colleagues around the House, about the protections in the bill that have been arrived at through consultation by the council and then through consideration by the committee. That protection that I’m going to focus in on is to make sure that the investment decisions—which shares to buy and sell and so forth—are not political decisions. The bill provides that the investment decisions must be made independently of elected members, on a commercial basis, and the member who just resumed his seat, Tama Potaka, made this point: that those provisions are modelled very closely on those of the Superannuation Fund. Some members of this House have also noted those similarities. New Plymouth PIF Guardians is also a similar name to the Guardians of New Zealand Superannuation, and that was a deliberate choice made by council. It was also deliberate that, in clause 8(2), it’s very similar to the wording that protects that fund managed by the guardians of the Superannuation Fund.

I want to touch on that because that point really highlights the intergenerational nature of this fund that New Plymouth will have. It will be a fund that has a similar sort of intergenerational and institutional level of oversight over its investments. These are investments which are meant to invigorate the economy in this area. They’re meant to make targeted, strategic investments that are good for the long term and are good for future generations. Does that sound similar to some other investments that are happening in this region? Yes, it does.

This region is very lucky to be a post-settlement region. Earlier in this Government’s term, Ngāti Maru was settled. The Crown made an apology to Ngāti Maru on 29 October 2022, making it the final of eight iwi within the region to reach a settlement with the Crown for historic grievances, many that arose during the time of the Taranaki Wars. It was a real honour for me to be involved in that process as a member of the Māori Affairs Committee. Some of the most important work that this Parliament does is considering the historical grievances and historical wrongs of the Crown toward iwi and then to be able to see the aspirations of iwi for future generations—their plans for housing, their plans for cultural revitalisation within an area—and a reconnection with their whenua. It is so important that this Parliament is involved. So, for that region, we have Ngāti Maru, Ngāti Mutunga, Te Ātiawa Taranaki—these settlements that have now occurred that make way now for a settlement of the maunga, a reclaiming of a history and a special association that so many of us have as New Zealanders. But also, those mana whenua, those ahi kā groups, can now have negotiation with the Crown, which will enable a reclaiming of the stories associated with that maunga, and an apology from the Crown.

So it’s in that context that, when we talk about the intergenerational nature of this fund, we as parliamentarians can express our excitement and our hopefulness about the ability of the New Plymouth fund—which is, as I understand it, $349 million worth—to interact with those iwi investments which are able to happen now. Ngāti Maru alone was settled $30 million from the Crown, and those investments will rapidly grow in an area which is growing and in primary sector investments which are much in demand on a global scale. So the ability for these eight iwi to work hand in glove with the council is absolutely important. I understand that the council has a thriving iwi chairs forum and that the relationships that exist between council can only grow now that they are backed up by this institutional level of investment, which can only get better.

I wish the council well. Again, it’s a real privilege for you to be here. I look forward to seeing those relationships grow and enable the Māori economy to thrive in the region. I commend this bill.

Thank you, Madam Speaker. Thank you for the chance to speak on this bill, and I acknowledge those who are here from the region.

I just want to start with a couple of stories from the Waikato region. I’m from Hamilton, and we have made two glorious mistakes with our funding in the last generations. The first was that the Waikato Regional Council managed to sell its shares in the Port of Tauranga, and that was a great economic decision that led to a fund being set up which, effectively, hasn’t really grown much in that period of time and hasn’t delivered much for the Waikato region. The second story is that, when we were in Government last time, we actually set up the ultra-fast broadband network. Hamilton City Council was one of the key players in that, and it actually had Taranaki, Waikato, and Bay of Plenty, and the reason we set it up was to create a community business for the Waikato. Now, they—bless their socks—a few years later, once they got all that capital, decided to sell it and put it into a fund for the purposes of their network, which defeated the purpose of what we’d set up.

What I’m saying is to be very careful with these kinds of funds, because there are some things that I think really stand out to me that are problems: first of all, council being involved in decision making. No offence to any councillors here, but the reality is that a council being involved in that decision making under clause 6 really is a problem.

Secondly, there is a risk averseness that comes into these funds. Often they invest in shares—and this is what the ACT Party said. They said that it’s great to see diversified investments that will be spread around, and you’ll have 20 percent in US shares and 20 percent in New Zealand shares, and all that. There is a great economic loss from doing that. There is the economic return you get in the dividend, but you have the economic loss of the failure to have the asset in your area.

💬 Arena Williams: This is free financial advice.

Yeah, nah, it is, and it’s great advice—you should listen. That is a big problem that many managed funds do pose for councils. They become risk-averse, they invest on a diversified basis—which is what everyone will tell you is the greatest thing since sliced bread and great financial planning—but the reality is you lose the capital input into your area.

I would encourage you to look at iwi. I don’t see many iwi going out there and going into managed perpetual funds. They use a different structure. Tainui Group Holdings (TGH) is a perfect example. Their asset base is completely different from the political base. The asset base has been given the job of getting to run it like a company to make money and they invest in land and they invest in assets in the region, and that is the parallel with local government. Local government has got a right to be there for ever, and that’s your role. Like with iwi, it’s a long-term role.

The problem with many perpetual funds is that they become investments that are run by risk-averse people that don’t invest in an area for long-term gain. I note that in clause 8(3) it says that you can invest outside the region, which gives the licence to do that, and I think you should be very careful about that.

So my encouragement for you, once you get this legislation, is to actually go and look at something like Tainui Group Holdings. It’s a better investment model. It takes it out of council decision-making, because I can tell you what you will be doing in five or 10 years’ time: you will be deciding to build some social housing in a certain area and thinking that that’s a great idea. TGH doesn’t do that. They go build investments into Ruakura Superhub and into commercial and industrial buildings, they do investments into land, and they do investments into businesses that actually generate money. You can be diversified in that range, but you don’t have to actually have it as a slush fund for council decisions.

I would really encourage you to take a wider perspective than what your advisers will be telling you, because they’ll be telling you diversification and all that, and you’ll be paying them handsomely for that, but the reality is that iwi don’t do that. Iwi are making more money than any managed fund I’ve seen in New Zealand that a council has held, and they use a different structure which is a much more commercial structure. You can divorce the council from that commercial structure, and that’s what you should do if you want to bear long-term growth.

You’ve got one of the best regions in New Zealand—it’s got amazing potential, and as long as it links with the Waikato, it’s got even better potential—but the reality is: don’t lose that opportunity. I’d hate to see in 10 years’ time that you have even $400 million in some managed fund with $50 million of that on the US stock market and the value isn’t in your region. It’s about using those assets for commercial purposes, not for political purposes. I’m not saying that that’s what you will do, but it will get to that point at some point because the decisions made by council won’t be commercial.

We encourage you to go ahead with this bill, but there are better approaches out there for how you actually structure it. Go look at iwi. They have the same long-term role that you have. They aren’t going into prudential managed funds like this. They are going into asset-based businesses that are run by commercial entities that then have a role of reporting back. It’s a completely different model, but it’s a better model, and it has worked. So I’d encourage you to have a look at that.

Madam Speaker, thank you for the opportunity to take a call on this bill—final call, actually—as this bill makes its way through the House. I’d like to begin by acknowledging some of the comments from the previous speaker there, David Bennett, who is a member of Parliament based in Hamilton, like myself. Just to pick up on a little bit there, particularly in terms of—the previous speaker mentioned Tainui Group Holdings. They have had tremendous success across the Waikato region and into South Auckland. As the member said, they’ve done that by investing in assets—in fact, many times being a landlord for Government agencies, like there was a recent opening of the ACC building in town. The Ruakura Superhub is an excellent investment—a $3 billion investment. The Tainui iwi had a settlement of $170 million back in 1995. They have turned that into $1.5 billion worth of assets. That’s a significant increase, and primarily they have done that, like the previous member said, by investing in assets, making wise choices around that.

Now, on to this bill, the New Plymouth District Council (Perpetual Investment Fund) Bill, which is a local bill. Before I get into the bill, I’d just like to mention to those who are either listening at home or watching at home the purpose of local bills. A local bill is a bill that a local authority, a council can—it’s basically an opportunity for a local council to raise an issue that is very much local in nature, and they can bring it to Parliament and they can have it put through Parliament through a local member. In this case, the local member is Glen Bennett. One of the advantages of local bills is that, when we have a members’ day like today, local bills go to the top of the Order Paper, so they are prioritised above members’ bills on days like this.

We’ve seen many examples of local authorities putting bills through. I think it’s an important part of our democracy that we do have this option, because, if we didn’t have the local bill option, what would happen is that councils would have to talk to Ministers in a Government and try and get a Minister to adopt a bill. As we know, Governments of all colours always have quite full agendas, because, when they go to the election, they basically make promises to the voters through their manifesto documents and then, if they are voted in, they’ve got three years to get that through, which is a short time. Personally, I think it should be longer, but we won’t get to that topic right now. So the local bill mechanism is a very important part of our democracy, and it’s good to see that the New Plymouth District Council have used this mechanism and they’ve used it well, and they’ve used local, supportive MP Glen Bennett, someone who’s very passionate about the region.

I’d like to acknowledge some of the work of some of the local people who have provided leadership in this bill. First of all, His Worship, Mayor Neil Holdom. I actually met with Neil around three years ago—met in his office—and, at that point, it was a particularly challenging time because the Government had just passed legislation in terms of no new permits for oil and gas. Neil explained to me, at the time, that the Taranaki region was very much dependent on that area for their economy. I don’t want to quote exactly what he said, but he sort of said, “Look, you know, we’re open-minded and we understand that some sort of transition needs to happen.” That transition is now happening, and, in a moment, I’ll get on to the New Plymouth area in terms of some of the economic opportunities there and how this fund can support those economic opportunities.

So I’d like to acknowledge Neil Holdom’s leadership in particular. As I understand it, he’s primarily been the driving force for this bill, so I’d like to acknowledge his leadership. Also Gareth Green, Chief Executive; Joy Buckingham, Group Manager, Corporate Services; Greg Stephens, Senior Policy Advisor; Jonathan Salter, Special Counsel, Simpson Grierson; Mark Butcher, Chair, New Plymouth PIF Guardians; Sarah Vrede, Director, New Plymouth PIF Guardians—

💬 Hon David Bennett: Who mowed the lawns?

No, no, it’s important. It’s important to mention these people. These are the local people who have brought about this change, and that’s an example of our democracy working well. Democracy is there for everyone, and as a Government, we are very much about grassroots. We are very much focused on working with local people and local outcomes.

💬 Hon David Bennett: Oh, come on, Jamie—there’s nothing local about the Labour Party; you’re taking it away.

As the member opposite will know, we are very much focused on understanding, unlike the party opposite, who are sitting up in their ivory tower wanting to give tax cuts to the rich while we are down in the trenches.

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! Order! The member will bring it back to this particular bill.

Thank you. I will return to the bill. Right, now, so just a little bit of history on the bill here—just a little bit of history on the bill here. The bill is, basically, being put forward to protect New Plymouth’s Perpetual Investment Fund (PIF) from future local body amalgamations. It was drawn up in 2021 and, as I understand it, there was a bit of anxiety from some members of council who were worried about a possible amalgamation and that, if that amalgamation happened, the residents of New Plymouth may have to share the returns from this bill with others. And so, basically, it was proposed by the staff: “Hey, why don’t you look at a local bill?”—which is good advice. The bill—you know, we’ve explained how that works. The councillors voted eight to five to progress the bill, which was then introduced to Parliament in 2023.

Now, it wasn’t a unanimous vote, but enough of the councillors voted for this to progress. I believe that some councillors felt there was no rush, due to amalgamations not being on the horizon, and the reality is that amalgamations aren’t on the horizon; it’s not something we’re looking at as a Government.

💬 Hon David Bennett: Yes, you are.

It is a topic—well, maybe the National Party might be looking at that, but we’re not. I mean, there are always discussions across the country around amalgamations, and from time to time it raises its head up and down, and that may or may not continue in terms of that. But, look, I just wanted to get a little bit of the economic development.

Now, the bill basically protects the PIF for local residents. The PIF focuses on social, cultural, environmental, and economic outcomes. I just want to pick up, particularly, on the economic aspect. The Taranaki region is a region that’s growing quickly—that has good projections in terms of economic development. Many parts of the economy will be well known, around agriculture, food production, tourism—we’ve visited as a family ourselves and enjoyed many of the tourism aspects—but also manufacturing. Manufacturing is particularly important for a resilient economy. Offshore wind—I recently went to an event which highlighted some of the opportunities there in the offshore wind area.

I would like to encourage those who are making the decisions on this fund—the trustees or the fund managers, the guardians—as they look at economic outcomes for this fund to continue working, as I know they’re doing, in terms of building partnerships with other regions across New Zealand. I think it would be remiss of me, as someone living in Hamilton, to not encourage them to look north in terms of the Waikato region. The “golden triangle”, as it’s often phrased—the Auckland, Hamilton, Tauranga area—makes up 50 percent of New Zealand’s population, 52 percent of GDP, 57 percent of the value of all building consents, and a huge amount of exports. In terms of economic development, I think that the Taranaki region would do well to have a look north and see what sort of partnerships could be opened.

I acknowledge that we probably would need to do a bit of work in the transport area. The road is certainly challenging at times through there, but, yeah, look, I think it’s important. A lot of people talk about this “golden triangle”—Auckland, Hamilton, Tauranga. I’ve started to coin a phrase: the “golden diamond”, extending that “golden triangle” south, sharing the love.

💬 Hon David Bennett: Point of order. That’s actually a council phrase—chamber of commerce—Jamie, not yours.

ASSISTANT SPEAKER (Hon Jenny Salesa): That’s actually not a valid point of order.

The “golden diamond” is a phrase I’m proud of and that I am progressing. I see my time has come to an end. I very much enjoyed this speech and commend the bill to the House. Thank you.

Motion agreed to.

Bill read a third time.