The other week Vernon Small wrote “the Government has missed out on an extra $1 million a week because of its decision to axe contributions to the Cullen superannuation fund” and said that canceling the Cullen Fund contributions was “a dumb, short-sighted decision that has cost the fund heaps in the long run“.
Hell, don’t worry about the long run just yet, Vernon, it’s been only 8 months. And it’s more than a million a week. Last month we lost $18 million – that’s basically a million a work day.
March was another stellar month for the Fund gaining 4.29%. Even allowing for the cost if we had borrowed the $150 million monthly contributions, the Fund would have been $48 million bigger had the contributions not been canceled. That’s up $18 million from the $30 million that the Government’s stupid, ideologically-driven decision had cost us by February.
What we’re starting to see is compounding losses. National has given up the opportunity to earn returns on returns. So, the cost to the country of John Key and Bill English’s “dumb, short-sighted decision” is accelerating.
Even a drongo in FCom 101 who’s only doing a degree because Daddy expects it could have told you that this would be a great year to invest given the size of the previous down-turn and the hundreds of billions of stimulus poured into economies around the world. It should have been especially obvious since the Cullen Fund had made 10% in the 3 months leading to last year’s budget.
Now, I’m not crazy enough to think this bull-run is going to last forever. In fact, as anyone who is informed about peak oil must be, I’m quite bearish about the long-term; the Cullen Fund has to keep an eye to windward for approaching trouble. But the fact is National is sacrificing a once in a generation chance to buy assets at low prices.
Come on, English, see sense. Restart the contributions before you lose us yet more money and further undermine the future of New Zealand superannuation.
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