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). The NZ$14.1 billion fund has about 7.5% of its fund invested in New Zealand stocks, although it has also invested in New Zealand bonds, property and other assets, including forestry. The fund was set up with an independent mandate to provide the best returns over a 20-plus year period to create a pool of savings to help fund pensions for the retiring baby boom generation. It was not instructed on what types of assets to buy or where. It has chosen to diversify widely and to invest the majority of its funds overseas, which has helped it outperform both risk-free government bonds and passive indices. Cullen is now suggesting a change to that independent mandate. Here's what he said yesterday:
Labour will consult with the Guardians of New Zealand Superannuation and KiwiSaver Providers on what changes to current settings would most facilitate increased investment in New Zealand by their funds.
He may be playing a clever political game to suggest a change without having to deliver it. If he really does want to to mess with the independent mandate then this is a disappointing step, in my view, from a Finance Minister who should take the credit for visionary decisions to set up the Cullen fund in a non political way and to set up Kiwisaver. Can you imagine what Winston Peters would do with that NZ$14.1 billion if he got his hands on it? National have just announced that they would force the Super fund to invest 40% of the fund into New Zealand: see here Your views?