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.
