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Video: John Key plans to fiddle with Cullen fund
October 15th, 2008
Labour Finance Minister Michael Cullen suggested in his economic policy announcement yesterday that the New Zealand Superannuation Fund, which Cullen set up and is often known as the Cullen Fund, should look at investing more in New Zealand.
(Updated to include National’s announcement that it will force the Super fund to invest 40% of the fund in New Zealand).
Tags: John Key, NZ Superannuation Fund
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October 15th, 2008 at 6:40 pm
woah hang on there Bernard … who has said that politicians will have direct access to the funds?
Key is recommending that 40% of the investment should be in NZ, not that his government or any other should remove the cash and use it for their own means.
The issue I see it is do you leave fund managers to allocate the funds worldwide, which may return more to individual funds, or would there be additional benefits to the country outside of the return to the funds as a result of directing a proportion to NZ? This appears to be a trade off and it the benefits of each that should be debated.
October 15th, 2008 at 6:48 pm
Dubious
I didn’t say politicians would take the money. Key is obviously directing what proportion of the money should be directed where. Given his preference for broadband and roads, he could easily direct them next to invest there.
It’s a slippery slope to ‘Bridges to Nowhere’.
I don’t trust our politicians to be better asset allocators than the professional fund managers at the NZ Super fund who have been doing a brilliant job until now on their own.
I’d be surprised if most of them haven’t left by the end of next year if Key tries this on. cheers
Bernard
October 15th, 2008 at 7:01 pm
It seems to be one of those unexpected facts that right wing parties are given more leeway to stuff things up financially, precisely because they have more credibility. Rather sad really.
October 15th, 2008 at 7:26 pm
I’m always saying John Key’s apprenticeship as PM in recession time would be too risky for our country.
October 15th, 2008 at 7:42 pm
Yes it will probably be a poisoned cup if he wins, to be followed by three more terms of Labour.
October 15th, 2008 at 8:43 pm
Roger Witherspoon – exactly – on both counts!
As I pointed out on the other thread, here’s NZ First’s policy – looks like National borrowed it (but adding the minimum threshold of 40% and a legislated timeframe);
• direct the guardians of the New Zealand Superannuation Fund to prioritise the purchasing of shares in New Zealand infrastructure companies, particularly when they are being sold by overseas investors, with the aim of building a solid base of New Zealand ownership of these assets. This shall be conducted at arms length, with no ministerial interference, and at the discretion of the guardians so as not to distort the market;
• require the New Zealand Superannuation Fund managers to invest in New Zealand infrastructure and growth industries including making funds available at competitive interest rates to the New Zealand Transport Agency, ONTRACK, KiwiRail and local government for capital projects;
But one other thing NZ Frist says that no one else has is;
• amend the legislation relating to the Superannuation Fund to tag individual entitlements, guaranteed by the State, and to make them untouchable by future generations of politicians;
October 15th, 2008 at 10:41 pm
key is wrong, the key thing for the security of the baby boomers is real money, Investing the fun more in New Zealand doesn’t let the fund work in our favour. The whole problem is that the baby boomers (actually the next generation) needs to pay for the the baby boomers in retiremen. Unfortunatly this means real money, as the bulk of the production well need to be imported or by a wonderful shift in productivity. Investing in NZ gambles that domestic productivity will increase. But unfortunatly grass grows pretty much at the same rate. So we are better off puting more money offshore in the hope that other countries will improve their producitivy and we can get the cash back.
(remember money is worthless unless you can exchange it for goods and services)
October 15th, 2008 at 11:45 pm
Bernard, You say at the start of that youtube video that Dr Cullen would “force” NZ Superfund to invest in NZ. This is totally false; what he announcement yesterday was that he would ask the Guardians of the fund what capital market barriers existed to them investing more in NZ, there would be NO ‘direction’ to invest in NZ, that is what National has announced. Very, very different policies (and you know it and you are being mischievous). One is consistent with maintaining the funds independence as set up by the Act, the other has the potential to destroy it entirely. Jake
October 16th, 2008 at 6:19 am
Long overdue or else stop taking the tax. Give me back my money and I will spend it on growing my Kiwi business. Try getting any money for business from Govt. guaranteed banks. Yeh right. Own any property mister, good then we will lend you some after we mortgage your wife, family, everything you own and anything else besides.
2 Billion last year just to keep Orr and others in a good job. Never mind anyone else. Stop stuffing the economy with your socialist good idea’s.
October 16th, 2008 at 8:30 am
Jake
The moment Cullen said he wanted the Super fund to invest more in New Zealand he was essentially forcing them to do it. An independent fund should make these decisions independently. No (I repeat no) advice from government on doing this. It’s a very slippery slope
cheers
Bernard
October 16th, 2008 at 8:43 am
Close the Cullen Fund down.
Transfer the balance to the general public purse.
Announce that Kiwisaver membership is compulsory, starting tomorrow.
Phase out National Super over the next 20 years. Anyone currently under the age of 45 should expect to rely on Kiwisaver.
October 16th, 2008 at 11:21 am
Investing in New Zealand is a nice thought, but it should not be done using money that has been alocated to something which politicians should not have access/control over.
The key objective of the Michael Cullen fund should (should) be make as much money as possible, by whatever (ethical) means possible. If they want use tax payers money to invest into New Zealand industry (in my opinion) they should look into the creation of another fund with the the sole purpose of boosting the NZ economy.