ACC’s higher than forcecast investment return has exposed the Government’s “scaremongering” about the corporation’s financial situation, Labour leader Phil Goff says.
Levies are going to be raised and some entitlements cut because the Government says ACC isn’t in a viable state to continue the way it is.
But Mr Goff, citing the latest Treasury figures, said today ACC’s investment funds had returned $500 million in the four months to October 31, which was higher than forecast.
I swear Labour oppose national standards for numeracy and literacy, because their election chances seem to be based on a hope residents can’t do basic maths.
I’m not sure what is scarier – taking (on paper) high returns for four months as some sort of guarantee of high returns over the long-term, or thinking that a $500 million return over four months will cover the $4.8 billion loss in the last year.
This is of course the same Labour that knew ACC lost $2.4 billion in 2007/08 and continued to increase benefits and entitlements. And then the Government broke the Public Finance Act, by not revealing the problem before the election.
Anyway let’s look again at Phil’s mathematics. Now the unfunded liabilities have increased from $9B to $24b in just four years. Part of the reasons is that the ACC Board and Minister assumed investment rates of returns that were grossly unrealistic – and Goff wants to do it all over again, on the basis on one four month period of good results.Does he really think that level of returns will persist for the next decade? If so, then I suggest he set up his own investment company.Tags: ACC, Phil Goff