Pssst: Financial Geniuses Don't Work for the NZ Government

20 FEBRUARY 2015

The Taxpayers' Union is urging the Government to leave investment decisions relating to the New Zealand Super Fund to the professionals after officials lost $200 million in a complex Portuguese loan deal. Taxpayers' Union Executive Director, Jordan Williams, says:

"This sort of thing is inevitable when you have little-league officials playing the international markets with taxpayer money. The whole Super Fund should be passively managed with individual investment decisions left to international fund managers acting on the Government’s behalf."

"Currently around 30 per cent of the fund is actively managed by officials. In the long term, taxpayers would be better off if that were zero."

"The fact is that the best and brightest investors don't work for the New Zealand Government. The best managers are overseas operating funds which dwarf NZ Super. Remuneration packages are sometimes in the hundreds of millions."

"New Zealand officials' should be ensuring the fund is properly diversified and that fees are kept to a minimum. By allowing the Guardians to play with the portion of the fund which is not outsourced, these sorts of costly mistakes are inevitable."

ENDS

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