Superannuation Statement and Venture Capital Investment
Contributions to the Super Fund will enhance the long-term wellbeing of New Zealanders
The Government is prioritising responsible investments that enhance the long-term wellbeing of New Zealanders.
Having restarted contributions to the NZS Fund, the Government is making regular contributions. These are projected to increase the size of the closing balance of the NZS Fund to $71.4 billion by 2023/24 and will help protect the Government's ability to pay superannuation at age 65. Over the 2018/19 year the NZS Fund grew by $3.3 billion to $42.3 billion, a pre-tax return of seven per cent.
The Government is also supporting New Zealand's early-stage capital markets by investing in the Venture Capital Fund administered by the Guardians of New Zealand Superannuation. The Government's Economic Plan calls for deeper capital markets, and with the passing of the Venture Capital Fund Bill, the Government looks forward to the Venture Capital Fund making its first investments.
It is important that the Government supports New Zealand's high-growth firms as they bring numerous benefits for New Zealanders. These firms are also critical for facilitating the use of newer technologies, which are a key part of our Economic Plan. New technologies contribute to productivity improvements in agriculture, horticulture and aquaculture, while also bringing improvements to water quality and emissions reductions.
As Table 4 shows the Government will contribute $11.5 billion to the NZS Fund in total over the next five years. Having restarted contributions in 2017/18, contributions will increase gradually to be in line with the contribution formula in 2022/23. This contrasts with the previous Government's approach of not having made any payments in the years between 2011 and 2017, estimated by the NZS Fund to have cost up to $26.2 billion in lost contributions and investment returns.
|Year ending 30 June
|Estimated contributions - prescribed by formula||2.4||2.5||2.6||2.7||2.7|
|Forecast contributions - Half Year Update 2019||1.5||2.1||2.4||2.7||2.8|
Source: The Treasury
Having NZS Fund contributions below the level prescribed by the contribution formula for the next three years will not change the Government's ability to make superannuation payments in the future.
- More information about NZS Fund contributions and the contribution formula is available here: https://treasury.govt.nz/publications/model/new-zealand-superannuation-fund-contribution-rate-model-2019
- Details from https://www.nzsuperfund.co.nz/nz-super-fund-explained-purpose-and-mandate/contributions-suspension