MPs are investing in a diverse group of companies.
Photo: RNZ
What do Ballance, Heartland Group, Silver Fern Farms, Genesis, Meridian, Vector and Amazon have in common?
They’re all companies that New Zealand members of parliament own shares in.
Each year, MPs have to disclose their investments on the pecuniary interests register.
The register showed that a significant proportion invested in residential property, many had investments in farms and other business, and many had investments in shares.
Just under 30 MPs disclosed direct ownership of shares in listed companies in the latest register, but many more listed trusts that may also hold investments. Almost all were also invested in KiwiSaver and other managed funds.
The shares included many agricultural businesses, such as Farmlands and Ballance Agri-Nutrients, but also well-known NZX names such as Restaurant Brands, The Warehouse Group, and the power gentailers.
MPs also disclosed shares in a number of privately held businesses, running everything from hair salons to small goods retail.
Generate investment specialist Greg Smith.
Photo: Supplied / Generate
Greg Smith, investment specialist at Generate, said the MPs’ list was a diverse group of companies.
“And an investment list which may diverge from what is typical for the average New Zealander. While there is some overlap – such as investments in large New Zealand and global companies, which many Kiwis may be indirectly exposed to through their KiwiSaver, it appears some MPs also frequently invest in private, unlisted companies.
“Less than 3 percent of all KiwiSaver funds are invested in private assets, and these types of investments are typically off-limits to everyday investors. That said, it’s worth noting that MPs also hold healthy KiwiSaver balances and invest in managed funds, which offer the benefits of a professionally managed portfolio and the diversification benefits available to most New Zealanders.”
In comparison, Sharesies said Air New Zealand, Nvidia, Tesla, Apple and Rocket Lab were among the most held shares of its investors, along with the Smart US 500 ETF and Pathfinder Global Responsibility Fund.
The Cabinet Manual said that if there was a conflict between a Minister’s portfolio responsibilities and a personal investment interest that was substantial and enduring, it could be necessary to change their portfolio responsibilities.
In 2023, then-Minister Michael Wood resigned after repeated failures to properly declare or sell shares relating to his portfolios.
Former Minister Michael Wood.
Photo: RNZ / Angus Dreaver
Michael Macaulay, a professor in the Victoria University school of government, said it was what happened after the investments were disclosed that needed attention.
“Conflicts of interest are inevitable in all walks of life, you know, they don’t have to be problematic … but obviously it’s how you manage them and what happens as a result. So I can understand that when MPs declare their interest, that’s great…
“But then even if they declare their interest, they are still, of course, allowed to vote on things, they’re allowed to be engaged in debates, and I think that’s probably where the area becomes a little bit grey, and probably a little bit more cause of concern.”
The manual said it was only when an interest was significant and pervasive that someone would need to divest themselves of the interest.
But Macaulay said it could be time for a broader rethink of the policies around MP investments, and they could be required to completely divest their share investments if they were required to vote on anything related to them.
“Maybe we shouldn’t be voting on things we have an interest in, even if we declare that interest.”
Former National Party minister Chris Finlayson said that was an extreme view. “MPs’ salaries are not huge, they use to be benchmarked with judges and they’ve got way out of kilter. The idea that they have to divest themselves … you won’t get people going into Parliament.”
Associate professor Brian Roper, from Otago University, said the issue had arisen when the government was changing the tax rules to allow property investors to claim mortgage interest costs against their taxable income.
“I would think there should be full disclosure of the extent to which they will personally, directly, financially benefit from a policy which they’re passing through Parliament.”
He agreed parliamentarians should be required to divest themselves of their investments.
He said Act and National might argue that what was good for business was good for everyone.
“I think there needs to be much greater transparency and accountability around, particularly, business lobbying. I also think that applies to donations to the political parties.”
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