The retirement policy and research centre at Auckland University has published its annual review of the performance of the NZ Super Fund.
This helps inform us for the election, as Labour’s policy is to borrow an extra $6b off China and have the NZ Super Fund invest the majority of it on international sharemarkets. Not even the fact that Europe stands on the brink of financial disaster, has put Labour off their borrow to save policy.
The RPRC compare the returns from the NZSF against the “risk free hurdle rate” of the yield on ten year government stock at the start of each financial year. This measures whether the NZSF has actually made NZ better off financially.
They find that as at 30 September 2011, the NZSF has made $1.22b less than the ten year government bond rate.
So why are Labour persisting in arguing that we should borrow money to contribute to the fund, when that was never its intention as set up by Cullen. Our priority has to be to get our debt down first.