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Slumping Markets Show Folly Of Cullen Fund

16 July 2002

"Recent downward spiralling activity in international sharemarkets shows the absolute folly of Labour playing investor with billions of taxpayers dollars through the Cullen Fund," says National's superannuation spokesman Gerry Brownlee.

Mr Brownlee says Budget tables show that Labour has already set aside $600 million of taxpayers' money for the Cullen Fund.

"These funds will have taken a major hit from being invested in overseas sharemarkets where - by its own regulations - the Government has to place most of this fund.

"Since the end of June, the United States' Dow Jones Index has fallen by 6.7% and London's FTSE Index has slumped by 14%."

Mr Brownlee says if the Government had placed the $600 million Cullen Fund in either of these markets, taxpayers would have lost $40 million and $85 million respectively in the last month alone.

"The volatility of the last few months doesn't look like it will go away with most international commentators suggesting we could be in for a long-run bear market.

"Dr Cullen needs to explain why he wants to - every year for the next generation - put $2 billion of taxpayers' money into these risky markets, when there are urgent needs in our own health and education systems crying for attention right now.

"National advocates that the best way to secure New Zealanders' future superannuation entitlements is to implement economic policies that ensure long-term sustainable growth can be achieved, and not gamble their hard earned taxes on the fickle nature of international sharemarkets," Mr Brownlee says.

Ends


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