Parliament

Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 

Market stress a reminder on saving for long term

Hon Dr Michael Cullen
Minister of Finance

29 September 2008 Media Statement

Global market stress is a reminder of the importance of saving for the long-term

The government's financial statements for fiscal year ended June 30, to be published by the Treasury next week, will fully incorporate the performance of the NZ Superannuation Fund, Finance Minister Michael Cullen said today.

“Not many investors in global equities would have avoided incurring mark-to-market losses in the value of their shareholdings late last year and in the first half of 2008. The New Zealand Superannuation Fund is no exception," Dr Cullen said.

"Times of stress and challenge in international financial markets are as good a time as any to reaffirm the importance of strengthening New Zealand's national savings performance and culture and to remember that long-term saving funds are just that, funds established for the long-term benefit of New Zealand," he said.

The Guardians of New Zealand Superannuation released their Annual Report earlier today and it showed that the Fund's net return on investments for the financial year was
-4.92 per cent before tax.

The Fund's annualised return since inception remains positive at +10.34 per cent, which is about 3.6 per cent above the rate of return that would have been achieved had the had the Guardians of New Zealand Superannuation instead invested solely in risk-free 90-day Treasury bills.

The Fund, which stood a little over $14 billion at June 30, compared with around $13 billion a year earlier, holds a significant ratio of its portfolio in global equities which have volatile returns within short-term periods while providing significant gains over thirty-year plus horizons. Market price weakness can provide investment opportunities for long-term investors like the Superannuation Fund, which is five years down its 30-plus year investment path and which no future government is expected to draw down from before 2025 at the earliest.

On Monday (6 October), the Treasury will publish the Financial Statements of the Government for the fiscal year ended June 30. The New Zealand Superannuation Fund is a significant, and growing, component of the Crown balance sheet. Month-to-month volatility in its valuation will have an increasing impact on the Crown's net worth but such short-term valuation volatility is fully anticipated given the Fund is invested in long-term risk-assets, including a significant portfolio in global equities.


ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Back Again: Government Approves TPP11 Mandate

The Government has approved a negotiating mandate for Trans-Pacific Partnership 11 (TPP11), which will ensure New Zealand businesses remain competitive in overseas markets.

Trade Minister Todd McClay says New Zealand will be pushing for the minimal number of changes possible to the original TPP agreement, something that the remaining TPP11 countries have agreed on. More>>

ALSO:

.

 
 

Gordon Campbell: On Why Labour Isn’t Responsible For Barnaby Joyce

As a desperate Turnbull government tries to treat the Barnaby Joyce affair as a Pauline Hanson fever dream – blame it on the foreigners! We’re the victims of the dastardly New Zealand Labour Party! – our own government has chosen to further that narrative, and make itself an accomplice. More>>

ALSO:

Rail: Greens Back Tauranga – Hamilton – Auckland Service

The Green Party today announced that it will trial a passenger rail service between Auckland, Hamilton and Tauranga starting in 2019, when it is in government. More>>

ALSO:

Housing: Voluntary Rental Warrant Of Fitness For Wellington

Wellington City Council is partnering with the University of Otago, Wellington, to launch a voluntary Rental Warrant of Fitness for minimum housing standards in Wellington, Mayor Justin Lester has announced. More>>

ALSO:

Treaty: Agreement In Principle Signed With Moriori

“The Crown acknowledges Moriori was left virtually landless from 1870, hindering its cultural, social and economic development. The Crown also acknowledges its contribution to the myths that the people of Moriori were racially inferior and became extinct." More>>

ALSO:

Susan Devoy: Call For Inquiry Into State Abuse Reaches UN

Race Relations Commissioner Dame Susan Devoy is in Geneva and has asked a United Nations committee to urge the New Zealand government to initiate an inquiry into the physical and sexual abuse of children and disabled people held in state institutions. More>>

ALSO:

(Not National): Cross-Party Agreement On Pike River Re-Entry

The commitment was signed this afternoon by the leaders of Labour, United Future, The Maori Party, and the Green Party and, together with the earlier commitment by New Zealand First, means that there is now a Parliamentary majority behind the families’ fight for truth and justice. More>>

ALSO:

Earlier:

 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

Featured InfoPages

Opening the Election