Greens reveal country's biggest problem gambler

The Government Superannuation Fund has lost at least $315 million dollars as a result of a failed gamble on the overseas sharemarket, Green Party Finance spokesperson, Rod Donald said today.

The information is revealed on page 12 of the Government Financial Statements.

"It is sadly ironic that the troubles of the Problem Gambling Foundation have been dominating media headlines while the GSF losses have gone unreported," Rod Donald said.

"The Foundation is rightly concerned about how $280,000 of its money was spent, but multiply that figure 140 times and you get some idea of the size of Dr Cullen's own gambling problem."

The Greens were the only party to oppose the change to the rules that allowed the Fund - to which more than 75,000 current and former public servants contribute or receive benefits from - to be invested in New Zealand and overseas sharemarkets.

Despite September 11, WorldCom and Enron more than 44 per cent of the $3.5 billion fund was earmarked for international equities.

"Nice timing, Dr Cullen: in the three months to June the crash in international share prices and the rise in the New Zealand dollar cost the fund $315 million," said Rod Donald. "That amounts to a loss of at least 20 per cent of the funds staked offshore.

"If those assets had only been invested in Government bonds securities they would have earned $25.5 million in interest, based on the average 10-year bond rate of return over 2001-2002. Similar safe, prudent investment helped achieve a 7.57 per cent return last year, which was a higher return than the Government Bond index.

"In fact, before the reckless decision to invest on overseas stocks the Fund had never lost money in its 46 years. The total loss could be even higher, with the GSF report due out in the next few days.

"The Government must learn from its mistakes, before squandering any more super funds on volatile, unsound markets

"New Zealand money should be invested in New Zealand, to the benefit of all," said Rod Donald. "It should not be left to ride on the roulette wheel of the global casino economy."

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