National hints at keeping NZ Superannuation Fund

Key says there is a link between superannuation and infrastructure which is not being addressed by Labour. Pension funds have “led the charge” into infrastructure assets overseas, Key says.

Key is not advocating greater direction from ministers over what the fund can invest in. He told Good Returns that he wants to see a change to the rules allowing private investors to put funds into assets such as roads energy, schools and hospitals.

“I know for fact the Guardians [of the New Zealand Superannuation Fund] and a number of other pension plans want to be in infrastructure projects. But they will be offshore.”

Given the need for infrastructure investment in New Zealand, this is ludicrous, he says.

That policy may now not be released until early next year, he says.

“The real point is that the government should open up the market for public/private partnerships. That should start with roads, but there are other opportunities.”

The problem is that the Land Transport Management Act, passed in 2002, has only “very restrictive” rules for private investment in public infrastructure.

“We need to be looking at PPPs, and also capital market opportunities such as infrastructure bonds. Most countries are developing quite significant asset classes in those areas now. We’re the exception.”

A minister of finance would not have to direct the Guardians of the New Zealand Superannuation Fund to invest in PPPs, Key says – simply allow the asset class to grow and the fund will be drawn to it.

“But at the moment the only way to invest in those asset classes is to put the money offshore.”

Key’s comments are a hint of where National maybe going with its superannuation policy – and provide some evidence that National will now accept the New Zealand Superannuation Fund. At this stage though Key is not being drawn on that issue.

Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.

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