About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   depositrates.co.nz  |   landlords.co.nz
Last Article Uploaded: Monday, August 31st, 10:22PM
rss
Latest Headlines

Cullen Fund Makes No Sense: Brash

National Party candidate Don Brash argues against the Cullen Fund.

Tuesday, July 23rd 2002, 10:10PM

"The Labour/Alliance Government's promotion of the fundamentally-flawed Cullen Fund as its answer to New Zealanders' future retirement needs is a serious mistake," says National Party candidate Don Brash.

Dr Brash told the annual convention of the Financial Planners and Investment Advisers Association today that the Cullen Fund made little sense.

"It is not clear to me why it makes sense for the Government to be investing in overseas shares and bonds, while at the same time increasing its borrowing in New Zealand.

"No fund manager worth their salt would advise a private individual to invest in overseas shares before the individual's home mortgage has been repaid. No investment in overseas shares can give a risk-adjusted after tax rate of return equivalent to the return gained from retiring debt.

"Why then does it make sense for Government to invest overseas before retiring its debt - indeed while still increasing its debt?"

Dr Brash says because the Cullen Fund will absorb large amounts of cash for a number of years, at a time when the Government is also undertaking a substantial investment programme, it will have to borrow substantially more than would otherwise be the case.

"The Government has marketed the Cullen Fund as in some way providing a high degree of certainty for funding future superannuation. But it will only make a small contribution - providing around 10%t of the cost of NZ Superannuation over the years the fund will be drawn down.

"However, by creating the illusion of certainty the Cullen Fund may well have a quite perverse effect on private sector saving behaviour. Treasury warned the Government of this risk when the scheme was first being discussed and there are signs it may already be having this effect.

Dr Brash says the fundamental ability to pay for New Zealand Superannuation in 20 or 30 years' time depends on the size of the economy at the time.

"If it was really such a good idea to fund future Government spending by investing in overseas sharemarkets, somebody would surely have thought of it long ago. The Cullen Fund looks like a serious mistake to me."

This is a press release from the National Party

« Super not a done deal: CullenAMP & Good Returns launch superannuation website »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • nib plots more growth
    “Hi Rob, Hope changes mean clients stuck in old closed groups or products where the loss ratio only goes one way because you...”
    14 hours ago by T
  • Former Mike Pero broker banned
    “I was always told that RoT's weren't worth the paper they're written on. Sounds like the Pero contracts are very tough,...”
    14 hours ago by Dirty Harry
  • nib plots more growth
    “Thanks for the feedback" I was wondering". Its true that we have a strong pipeline of applications. Many applications go...”
    1 day ago by Rob Hennin@nib
  • Former Mike Pero broker banned
    “Unfortunately Heath did willingly sign a franchise agreement with Mike Pero. He was aware of the terms and conditions when...”
    3 days ago by I was wondering
  • nib plots more growth
    “This is great news, however from my own personal experience nib can't handle the business flows it has at the moment. Their...”
    3 days ago by I was wondering
Subscribe Now

News and information about KiwiSaver

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 6.24 5.10 5.25 5.59
ANZ Special - 4.69 4.89 -
ASB Bank 6.50 5.05 5.25 5.35
ASB Bank Special - 4.69 4.89 4.99
BankDirect 6.50 5.05 5.25 5.35
BankDirect Special - 4.69 4.89 4.99
BNZ - Mortgage One 6.65 - - -
BNZ - Rapid Repay 6.24 - - -
BNZ - Special - 4.69 4.69 -
BNZ - Std, FlyBuys 6.24 5.09 5.09 5.19
BNZ - TotalMoney 5.99 - - -
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.45 5.75 5.75 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct 6.10 6.45 6.69 7.10
First Credit Union 5.85 - - -
HBS Bank 6.14 5.39 5.39 5.39
HBS Special - 4.69 4.69 4.99
Heartland 6.70 7.00 7.25 7.85
Heretaunga Building Society 6.45 5.10 5.40 -
Housing NZ Corp 6.49 5.19 5.49 5.59
Lender Flt 1yr 2yr 3yr
HSBC Premier 6.60 4.89 4.89 4.99
HSBC Premier LVR > 80% - - - -
HSBC Special - 4.49 4.49 4.49
ICBC 6.75 5.99 6.39 -
Kiwibank 6.15 4.79 5.49 5.69
Kiwibank - Capped - - - -
Kiwibank - Offset 6.40 - - -
Kiwibank Special - 5.09 4.65 4.99
Liberty - - - -
Napier Building Society 6.50 5.80 6.70 -
Nelson Building Society 6.70 5.65 5.95 -
Lender Flt 1yr 2yr 3yr
NZ Home Loans 6.60 5.39 5.49 6.29
Perpetual Trust 7.70 - - -
Resimac 5.59 5.37 5.40 5.52
SBS Bank 6.14 5.39 5.39 5.39
SBS Bank Special - 4.69 4.69 4.99
Sovereign 6.35 5.05 5.25 5.35
Sovereign Special - 4.69 4.89 4.99
The Co-operative Bank 6.20 4.69 4.79 4.99
TSB Bank 6.24 5.10 5.39 5.45
TSB Special - 4.69 4.69 4.99
Wairarapa Building Society 6.20 5.75 5.95 -
Lender Flt 1yr 2yr 3yr
Westpac 6.15 4.99 5.19 5.19
Westpac - Capped rates - 6.15 6.15 -
Westpac - Offset 6.15 - - -
Westpac Special - - 4.69 -
Median 6.40 5.09 5.25 5.35

Last updated: 18 August 2015 3:39pm

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com