Political meddling danger to super fund

The Suerannuation Fund is at risk from political meddling:

Now, Labour appears to be considering taking steps to require NZ Super to invest in a very specific way in a way no politician has tried to do before.

While no one from the Government is prepared to discuss the plans, it is understood that Economic Development Minister David Parker wants to carve off hundreds of millions of dollars of the Governments contributions to the Super Fund to be specifically invested into early stage companies.

This is often referred to as angel investment. . . 

Angel investment is fine for individuals or private businesses it’s not appropriate for the Super Fund at the directive of politicians.

Leaving aside whether there is a lack of money for early stage companies, a view which is not universally held in the industry, there are bigger issues at play. Having politicians direct the investments of NZ Super is dangerous territory.

Carving up the Government’s contributions to the fund, and earmarking parts for specific areas appears to be a subtle way to direct the Super Fund’s investments. It could easily become a political tool if politicians were able to use their influence to change investment decisions.

Once the door to political influence is opened, it will be difficult to close again, and each idea from Parliament is likely to be more questionable than the last. . .

This is very dangerous territory:

The security of New Zealanders’ pensions is at put at risk if Economic Development Minister David Parker opens up the Super Fund to political interference, says the New Zealand Taxpayers’ Union.

Taxpayers’ Union spokesman Louis Houlbrooke says, “For seventeen years, the Super Fund has been managed independently from the politicians, invested with the sole purpose of maximising returns for the Kiwi taxpayer. This independence has served the Fund well, and increased the security of our pensions.”

“The news that David Parker wants to fiddle with the Fund to skew investment towards particular types of companies should send a shiver down the spines of taxpayers.”

“If David Parker was some kind of investment guru, he’d be making millions in the private sector, not pursuing a career in politics. In fact, his investment decisions are guaranteed to be distorted by political motivations. This conflict of interest puts the security of our pensions at risk. The politicians need to stick to their core responsibilities and keep their grubby mitts off our Super!”

Putting money into the Super Fund instead of paying down debt is questionable.

But once it’s there, it needs to be invested wisely, not at political whim.

Having politicians direct where funds should be invested puts the Super Fund at risk and should not be countenanced.

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