Finance Minister Michael Cullen has revealed, in answers to parliamentary questions (pgs 3882-3903) from Green Co-Leader Rod Donald, that the GSF has made an overall net loss (after tax) of $233 million for the 17 months since November 2001 when the decision was made to take the retirement savings of current and former public servants out of Government stock and invest them on the overseas sharemarket.
“Dr Cullen’s greedy gamble is costing the country dearly as the GSF continues to bleed,” Donald says.
“At the outset Dr Cullen claimed that the international sharemarket would deliver a better rate of return than Government Bonds.
“The truth is that the $3.518 billion fund made a profit of $169 million in the year before Dr Cullen set up the GSF Authority and told it to make more money by investing on the sharemarket. The fund is now only worth $3.023 billion as at 31 March this year.
"Despite being proved wrong Dr Cullen still wants to stake the much larger New Zealand Superannuation Fund (NZS) on the same roulette wheel.
“He continues to exhibit a blind faith in the so-called ‘financial experts’ who believe that the international sharemarket will pick-up, solely on the basis that it couldn’t get any worse.
“New Zealanders should fear for their future now that Frank Russell, the investment consultants who advise the GSF where to invest, has now also been appointed as investment managers to the NZS.
“With Frank Russell on board and David May, the deputy chair of the GSF Authority, in the chair both funds are a house of cards.
“Instead of gambling our retirement savings overseas, Dr Cullen should be investing them within New Zealand.
“The Green Party urges the Government to scrap the NZS and use the billions in the bank to future proof the economy, to strengthen our society and protect our environment.
“There is no shortage of worthy investments. Committing resources to energy conservation and efficiency, renewable solar and wind energy, buying back the rail tracks, eliminating child poverty, properly funding tertiary education and reducing unemployment will all do more to prepare New Zealand for the future than Dr Cullen’s super fund.”
This is a press release from Green Party co-leader Rod Donald.
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