The New Zealand government could create a single NZ$40 billion (US$29.4 billion) fund under a proposal raised in its inaugural “Investment Statement” published last week.
If adopted, the proposal — classified as one of the “high-level choices in the financial portfolio” — would impose a central investment structure across all Crown Financial Institutions, which include the NZ$17.6 billion New Zealand Superannuation Fund, Auckland, and the NZ$13 billion Accident Compensation Corporation fund, Wellington.
“At present, the five CFIs are separate entities,” the government statement said. “A single fund manager across CFIs might increase efficiency and overall performance, and enable better aggregate risk management across the financial portfolio.”
As well as the ACC and NZ Super funds, the CFIs also include the NZ$6 billion Earthquake Commission fund, Wellington, and the NZ$2.9 billion Government Superannuation Fund, Wellington.
While classed as a CFI, the NZ$1.8 billion National Provident Fund, Wellington, manages the private savings of individuals across several industry groups and falls under the government purview because it carries a Crown guarantee.
“No decisions have been made or any in-depth analysis of the pros and cons (of creating a single CFI fund) has been carried out,” according to a spokesman for the office of Finance Minister Bill English.
The statement also reveals the government would review the size and asset mix of the earthquake fund following the massive earthquake that hit Christchurch in September.
“Both issues will need to be reassessed in the light of the Canterbury earthquake, which is likely to result in payments … of up to (NZ)$1.5 billion,” the statement said.
David Chaplin writes for I&T News, Sydney.