Cullen's Super Policy Losing $83,000 a Week!

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The Government’s Financial Statements for the Five Months Ended 30 November 2001, released today, have revealed Michael Cullen’s super fund to be a fraud, ACT Finance Spokesman Rodney Hide said.

Monday, January 21st 2002, 5:17PM

“Michael Cullen is borrowing every dollar that he has so far set aside for the fund. Such a super scheme in the private sector would see Michael Cullen sent straight to jail – yet another argument in favour of privatisation.

“The accounts report: ‘As at 30 November 2001 the amounts held by the New Zealand Debt Management Office totalled $256 million (including interest accrued at the official cash rate)’ (p.4).

“The accounts also report the Government’s financing requirement over the five-month period to be $549 million (p.7).”

“So Michael Cullen has set aside $256 million for future super, while borrowing an extra $549 million. Brilliant! His strategy is to increase the mortgage on the house to invest in the stock market. Precisely what every investment adviser in the country warns not to do, for obvious reasons.

“But what’s worse is that Michael Cullen’s super fund is already losing money. He has yet to invest it. He has it stuffed in a bureaucratic sock earning just 4.75 percent (the Official Cash Rate). But he’s had to borrow the $549 million at 6.44 percent (the ten year bond rate). The difference is 1.69 percent and this is what Michael Cullen is already losing taxpayers on his fund. The cost just this week of Michael Cullen’s super fund is $83,200.

“Only Michael Cullen would ever have the gall to borrow at 6.44 percent and invest at 4.75 and call that a pension fund. The rest of us would quite rightly call it a fraud,” Rodney Hide concluded.

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