Labour are now investment experts

The current government is showing itself to be a very poor steward of the New Zealand economy. Having trashed lucrative industries for no good reason, and having destroyed business confidence, it still has labour reforms sitting in the wings that will take us back to the heady days of the 1970s. Unfortunately, these guys have not finished yet. Now they want to use their considerable lack of experience to manage the NZ Super Fund. That is $40 billion of assets they are about to play with.

Would you trust David Parker with $40 billion? Personally, I wouldn’t buy a used car from him.

Hamish Rutherford at Stuff reports: quote.

Since it was established, politicians of almost all parties have been offering views about what the Super Fund should, or should not, invest in.

Set up to help cover New Zealand’s future pension needs, so far it has largely resisted political pressure, but this is something which needs to be guarded against carefully.

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. end quote.

The devil is in the detail. quote.

Parker’s idea is not, in itself. strange; a lack of capital for early stage companies often raised as a problem in New Zealand’s financial markets.

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. end quote.

We all know where this will end. Ethical investing. Investing in crazy climate schemes. Investing in risky start-ups. All with the taxpayers’ hard-earned money, intended to provide an income in retirement.

The previous government took a prudent approach to the Super Fund, giving general direction, but not getting directly involved in the overall running of the fund but we all know that this government will never be able to show such restraint.

All that money available to an incompetent government sends out warning signs. This is our retirement fund for the benefit of future superannuitants. Do you really trust this inept bunch of amateurs with your hard earned money?

 


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Accountant. Boring. Loves tax. Needs to get out more. Loves the environment, but hates the Greens. Has been called a dinosaur. Wears it with pride.

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