Greens say Government super fund gambled away

Government Superannuation Fund managers expected to make $59.8 million in the first quarter of this year but instead posted a $30.5 million after-tax loss, Green Party co-leader Rod Donald said yesterday.

Mr Donald has long argued the fund, which pays the pensions of retired public servants, should be invested in New Zealand and has criticised decisions to play the international sharemarket.

He said that in the 17 months since November 2001, when the decision was made to take funds out of Government stock and invest on the international sharemarket, the fund made an overall net loss of $233 million.

The fund's gross loss on the international sharemarket from November 1, 2001, to March 31 this year, totalled $546 million. In the year before Finance Minister Michael Cullen set up the Government Superannuation Fund Authority to manage the fund and allowed it to invest in overseas equities, the $3.51 billion fund made a profit of $169 million, Mr Donald said.

"The fund is now only worth $3.02 billion as at March 31 this year."

Mr Donald, who got his figures from Dr Cullen in reply to written questions, said the fund would be better invested in New Zealand.

Fund managers have told MPs that international sharemarkets go up and down but are expected to have a higher return than other investments over the long term.

The managers were "gambling" on the shares bouncing back, Mr Donald said.

- NZPA