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Overseas super gamble fails again

Learning the hard way: overseas super gamble fails again

Green MP Rod Donald says the warning bells are ringing for the New Zealand Superannuation Fund (NZSF), after yet another disastrous year on the international sharemarket for the Government Superannuation Fund (GSF.)

The GSF Authority's annual report for the year to June was tabled today.

"The GSF has lost a further $42 million on the international sharemarket in the last year," said Mr Donald, the Green Party Co-leader. "That takes the Fund's total overseas sharemarket losses to over $280 million.

"Bad as that is, it will look like pocket-money compared to the amounts that Dr Cullen's brainchild, the NZSF, stands to lose, starting this month when the first billions are gambled at the global casino.

"The tragedy is that the foolishness of overseas 'investment' will condemn New Zealanders to a much poorer retirement than would be the case if Dr Cullen and his advisers had learned from the GSF disaster and adopted a fiscally prudent investment strategy.

"When the GSF was previously invested in Government Bonds it made a profit in every one of its 55 years as part of a Government Department. In its last year (to June 2001) the old fund earned $252 million on its investment to yield a net profit after tax of $169 million.

"This year, thanks to its spectacular losses on overseas equities, it will return a profit of just $33 million after tax - some $200 million under the GSF Authority's own forecast. If the GSF managers had left the money in government stock the profit figure for the year would have been $136.9 million after tax.

"The message is crystal-clear: forget overseas gambles and instead invest our money at home, where it can bring real, sustainable returns."


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