A message from Mayor Mahé with Mahé Drysdale

The future of the Bay of Plenty’s investment fund is an issue that should matter to every ratepayer across our region.

The investment fund was established more than 30 years ago with a clear intergenerational purpose. What began in 1991 as a $53 million shareholding in the Port of Tauranga has grown into a diversified portfolio valued at more than $3 billion, making it the largest ratepayer-owned investment fund in New Zealand.

It has performed strongly over many decades, and there is every indication it will continue to do so. But its true value is not measured by financial returns alone – it lies in what it enables for our communities today, and what it safeguards for future generations.

The Bay of Plenty Regional Council is consulting on potential changes to the future structure and management of the fund. Given it exists to serve the people of our region, this is an important conversation, and one that deserves careful consideration.

Shape generations 

From my perspective as Mayor of Tauranga, and with a background in investment and financial advisory, I see this moment as pivotal. The choices we make now will shape not just the next few years, but the next few generations.

The big question is how we ensure the fund is protected from short-term pressures, particularly those that can arise across election cycles.

There are three principles that, in my view, should guide decisions about the fund’s future.

First, intergenerational protection. The capital base of the fund should be preserved in real terms – that means maintaining its value after inflation. Distributions should be set so today’s benefits are not achieved at the expense of tomorrow’s communities. In addition, this fund should have legislative protection.

Second, independence. The fund’s success has been built on professional, arm’s‑length investment management. Independent governance allows skilled investment professionals to focus on long‑term performance, free from short‑term political or fiscal pressure. That independence should remain a cornerstone of any future framework.

Third, democratic accountability. Elected representatives must retain a clear role in deciding how investment returns are used for community benefit through Long‑Term Plan and Annual Plan processes. But there is an important distinction here – elected members should influence how returns from the fund are spent, but should not have input into the investments or how to generate returns.

Risk 

Blurring that line risks undermining both performance and public confidence.

This discussion is also taking place during a period of significant reform across Local Government, including the possibility of reorganisation. Personally, I would like to see these decisions made as part of that process.

Similar funds show the ability to return 4-5% per annum to the community in addition to protecting the real value of the asset. That is returns of $120m-$150m a year for politicians to distribute for community benefit, but they must allow the investments to be managed by the experts and without political interference. That will deliver the best outcome for the region, now and into the future.