Every Cent of Super Fund Must Be Borrowed

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The Finance and Expenditure Select Committee's report tabled today confirms that every cent of the $6.1 billion going to the Super Fund over the next five years will have to be borrowed, ACT Finance spokesman Rodney Hide said today.

Monday, July 23rd 2001, 6:23PM

"The Finance and Expenditure Committee's report on the Budget and Economic Fiscal Update (BEFU) confirms Michael Cullen is going to borrow in order to 'save' for future pensions.

"This is absurd. A pension scheme financed by borrowing is no pension scheme at all. You cannot borrow money then claim that you are 'saving' it.

"Treasury told the Committee that the Government has to borrow an extra $7.6 billion over the next five years. They explained that without the super fund, only $1.5 billion would need to be borrowed."

The Committee concluded:
We note the DEFU [December Economic and Fiscal Update] signalled the Government would borrow $2.1 billion (which increased to $7.6 billion). We were informed by The Treasury that, all things being equal, if the
Government was not investing $6.1 billion in the New Zealand Superannuation Fund it would need to borrow $1.5 billion over the period.

"The Super fund was always a shaky proposition. It is now absurd that the government is having to borrow to fund it," Rodney Hide said.

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