Mr MILLS - 2008-05-08
On Tuesday, I asked you to explain how you lost $32m on the stock market. You did not answer the question then, so I ask you again. Please explain how you lost $32m out of Conditions of Service Reserve.
ANSWER
Madam Speaker, I thank the Leader of the Opposition for his question. He did not understand the answer, so I will repeat it. It is not a case of whether I misplaced the money or something like that. As with all reserve trusts, the Conditions of Service Reserve, obviously, has the financial wherewithal, and is money out on the market. As I explained earlier in the week, fortunately for the government, it is out in the long-term market. Long-term investment structures is how we structure the Conditions of Service Reserve that we are talking about.
As I pointed out in my previous answer that the Leader of the Opposition did not seem to understand - and that most people reading the NT News would have picked up lately - there was a sub-prime mortgage crises in the US, which then led to a chain reaction in the financial markets. As a result, values that would have previously been high are, in fact, dramatically reduced. A lot of financial institutions have been in absolute strife. Fortunately for the government, the market volatility, whilst it affected us, really did not affect us to the extent as it has a lot of other people. For example, the fund that we are talking about has a long-term investment structure, much like any other superannuation fund investment.
From an actuarial perspective, it is anticipated that funds like this will experience a loss once in every six years, which is approximately the same as the average balanced superannuation fund. Fund performance currently is, and historically has been, better than its benchmark, with a return of 10.48% on average over the past three years to 31 March 2008. I repeat: the Conditions of Service Reserves return is similar to that of other funds around Australia and, as at 31 March, the Intec survey of similar growth-style superannuation funds was 7.71%.
ANSWER
Madam Speaker, I thank the Leader of the Opposition for his question. He did not understand the answer, so I will repeat it. It is not a case of whether I misplaced the money or something like that. As with all reserve trusts, the Conditions of Service Reserve, obviously, has the financial wherewithal, and is money out on the market. As I explained earlier in the week, fortunately for the government, it is out in the long-term market. Long-term investment structures is how we structure the Conditions of Service Reserve that we are talking about.
As I pointed out in my previous answer that the Leader of the Opposition did not seem to understand - and that most people reading the NT News would have picked up lately - there was a sub-prime mortgage crises in the US, which then led to a chain reaction in the financial markets. As a result, values that would have previously been high are, in fact, dramatically reduced. A lot of financial institutions have been in absolute strife. Fortunately for the government, the market volatility, whilst it affected us, really did not affect us to the extent as it has a lot of other people. For example, the fund that we are talking about has a long-term investment structure, much like any other superannuation fund investment.
From an actuarial perspective, it is anticipated that funds like this will experience a loss once in every six years, which is approximately the same as the average balanced superannuation fund. Fund performance currently is, and historically has been, better than its benchmark, with a return of 10.48% on average over the past three years to 31 March 2008. I repeat: the Conditions of Service Reserves return is similar to that of other funds around Australia and, as at 31 March, the Intec survey of similar growth-style superannuation funds was 7.71%.
Last updated: 09 Aug 2016