7 May 2009 Media Statement

Suspending Superfund contributions doesn’t make sense

The logic behind National's plans to suspend contributions to the "Cullen" Superfund has been shot down by the positive signals sent by the Guardians of the fund today, Labour Commerce spokesperson Lianne Dalziel said today.

"The Guardians told MPs today the New Zealand Superfund (NZSF) is making good progress on clawing back losses it sustained on world sharemarkets," Lianne Dalziel said.

"Unaudited results show that in a little over a month the NZSF has made $1.75 billion dollars.

The Guardians stressed to Parliament's commerce select committee the importance of taking a long term approach to both investment and returns.

Lianne Dalziel, who chairs the select committee, says the Guardians’ comments that any meaningful view of its performance had to be taken over a 5 to 10 year basis shows National's plan to suspend contributions is short-sighted.

"While it's certainly not out of the woods yet; in the last few months the NZSF has bounced back," Lianne Dalziel said.

"The global downturn has also presented the NZSF with a major opportunity to invest in the market when it is low. The fund managers have a "once in a lifetime" opportunity to invest at cut price rates. This makes National's intentions look fiscally foolish.

The Guardians also confirmed that a law change would be needed before it could direct 40% of its assets into New Zealand investments, a policy that National campaigned on.

"The NZSF has around 20% of its assets invested locally but gearing that up to 40% could mean possible gains to be made by investing globally could be lost," Lianne Dalziel said.

"The Guardian's say if that, coupled with a suspension in the Government's contributions were to happen, there would be a real risk of compromising investment standards and undermining the fund’ performance.

"National's intentions with the Superfund are disingenuous, dangerous and short sighted. They could put the Super of baby boomers and future generations at risk," Lianne Dalziel said.

ENDS

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