5. R DOUG WOOLERTON (NZ First) Link to this
to the Minister of Finance
What is the current value of the New Zealand Superannuation Fund, and how much of the fund is currently invested in New Zealand?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
As at 29 February 2008 the New Zealand Superannuation Fund’s total assets were NZ$13.5 billion; 26.2 percent of total assets are invested in a range of asset classes in New Zealand.
In light of the Minister’s statement yesterday to the House that the very substantial inflow of foreign money into the economy—around $90 billion in the last 5 years—reflects the “high level of dependence by New Zealand offshore borrowing for its investment purposes”, has the Minister considered increasing the funds invested in the New Zealand economy to reduce our dependence on foreign money?
Hon Dr MICHAEL CULLEN Link to this
The fund operates at double arm’s length from the Government. The Minister of Finance is not in a position to start directing the New Zealand Superannuation Fund about where it invests its money. Both the board of the fund and the fund’s appointment of fund managers are designed to ensure that people who are experts in superannuation fund management are operating the fund.
Hon Bill EnglishCan the Minister confirm that his actions of making a last-minute arbitrary intervention in the bid for Auckland airport had the effect of creating uncertainty for all investors, but particularly for Kiwi mums and dads who thought they were buying a blue-chip stock of good value, only to find the Minister of Finance trashing its value?
Hon Dr MICHAEL CULLEN Link to this
The term “blue-chip” is particularly unfortunate at the present time, and I am sure Mr Clarkson feels most embarrassed by the use of that particular piece of terminology. The member is pre-empting whatever the ministerial decision may be around Auckland airport.
Hon Mark GoscheHas the Minister seen any reports that the Government should consider privatising State-owned enterprises so that there are more companies to invest in on the New Zealand Exchange?
Hon Dr MICHAEL CULLEN Link to this
Last week there was a very strange comment from Mr English about safe investments for people to invest in in New Zealand. It seemed to be mentioned in the context of State-owned enterprises and generating privatisation of that. This may explain the rather strange series of meetings that his sleeping partner on the front bench has been having with merchant banks recently.
Would the Minister agree that if a good part of the interest extracted from foreign investments—around $65 billion in the last 5 years—is not shipped overseas but instead reinvested in the New Zealand economy, as he stated yesterday, then foreign ownership of the economy would only grow as profits increase, and would he agree that increasing the superannuation fund’s investment in New Zealand would help ensure that less of the economy will be lost to foreign investors?
Hon Dr MICHAEL CULLEN Link to this
There is a lot of chicken and egg stuff in here. In order to deepen New Zealand’s capital markets, one needs both more savings in New Zealand and a range of others things to be occurring. Of course, one of the things that is true about the New Zealand market is that a very large number of countries do not list on the stock exchange, so the amount of equity value that is available for investment in New Zealand is relatively small, and to a large extent superannuation funds do not tend to invest directly into businesses. That is one of the more surprising aspects of the Canadian pension fund bid.
Hon Tariana Turia Link to this
Is the Minister aware that the Guardians of New Zealand Superannuation announced last October that they would divest the $37.6 million they had invested in tobacco stocks from the fund because it was inconsistent with their responsible investment standards, and would he not consider that this provided a precedent for the Government to remind the New Zealand Superannuation Fund about the value of ethical investments?
Hon Dr MICHAEL CULLEN Link to this
It is fair to say that there is ongoing conversation about the value of ethical investments. The New Zealand Superannuation Fund has appointed a full-time adviser on ethical investments and is continuing to review all its investments in light of that issue.
Would the Minister consider encouraging or instructing the New Zealand Superannuation Fund to more actively protect, or outright purchase, strategic assets such as Auckland airport, thereby ensuring that the asset remains in New Zealand ownership and control rather than allowing foreigners to take another slice of the New Zealand economic pie?
Hon Dr MICHAEL CULLEN Link to this
The governing legislation for the Superannuation Fund places a limit on the amount the fund can own of any particular business. That, of course, is because once the fund goes beyond that limit it starts to have to become an active part of the governance structures of those individual businesses. It is probably better that the New Zealand Superannuation Fund is not stretched in that way but is able to concentrate on a very broad spread of investments.