Planned Super Fund rapidly losing favour

National reckons the weight of evidence is building against the Government's super fund.

Tuesday, November 27th 2001, 1:29AM

The weight of evidence is building against the Government's monster super fund, but thankfully it's not too late for Dr Cullen to ditch the whole silly idea.

National's associate finance spokesman David Carter points out that over the last couple of weeks a number of respected commentators have raised serious concerns about Dr Cullen's plan to borrow billions of dollars to put into a savings account.

"Logic says it makes no sense to borrow to save, we will just go further into debt. Quite understandably key economists are concerned about the ever tightening fiscal situation and the implication of rising Government debt, the very scenario National warned Dr Cullen about at the time of the Budget in May. Borrowing to put money into overseas sharemarkets is just illogical."

"The National Bank is rightfully arguing the increased borrowings will add a permanent risk premium to New Zealand interest rates which will in turn lead to lower growth.

"Others are making the important point that there may be better uses of an average $2 billion dollars per annum for the next 25 years, such as spending on education or event tax cuts. National supports this.

"One thing is becoming increasingly clear: Dr Cullen's only answer to New Zealand's economic woes is simply going to add to the problem. The last thing New Zealanders need is Dr Cullen or Jim Anderton as their fund managers.

"Dr Cullen is about to embark on a $1 million promotion of the super fund. At the very least he should be fronting up with the hard evidence that supports the super fund being the best thing he can do with $2 billion per year. Our guess is his argument will fall well short," David Carter says.

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