Cullen says no to fund

Finance Minister Michael Cullen has delivered a resounding "no" to calls, some of them from his Parliamentary allies, to invest the New Zealand Superannuation Fund in economic development and infrastructure projects.

Tuesday, March 11th 2003, 12:47AM

by Rob Hosking

Mayors from the main cities, as well as government allies United Future and the Greens, have called on the government to invest some of the money in projects ranging from buying back the railways, wood processing, and roading projects.

"They should make their case to the board [of the Guardians of the fund]," Cullen says.

"The whole structure of this fund is based around the idea that the Minister of Finance doesn’t direct its investments. I think it would be quite improper of me to try to influence the fund. I can ask why certain things are being done, but if I get into the position of saying, or even seeming to say, that they should be investing in certain areas, that is over the line.

"I don’t pretend to be an investment manager. If I was I would be a lot richer person than I am."

The fund’s creditability is at stake over this issue, he says.

"I’ve always thought the danger of the big fund was not the one that most people thought – socialist government, Cossacks, and all that, but that everyone else would decide to be socialist Cossacks and the funds would be used to pay for their pet projects.

"But this fund will only have long term credibility if it is managed independently, according to best practice for superannuation funds, as soon as people start seeing the money – their future incomes – diverted into other purposes then they will become very suspicious indeed, and lose faith in the way it is being managed."

For more on how the fund is invested go to www.supertalk.co.nz. SuperTalk is a website run by Good Returns and AMP and devoted to superannuation issues.

Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.

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