7. Superannuation Fund—Government Contributions and ReturnsGRANT ROBERTSON (Labour—Wellington Central) to the Minister of FinanceSuperannuation Fund—Government Contributions and Returns7. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Is the New Zealand Super Fund correct that the impact on the fund as a result of the suspension of Government contributions in July 2009 has been a reduction in the projected size of the fund of $20.5 billion?Hon STEVEN JOYCE (Minister of Finance): I can confirm that had contributions not been put on hold in 2009 the Government would have put about $13 billion more into the fund which would have required around $13.5 billion of additional borrowings. The exact impact this has had on the overall balance of the Superannuation Fund depends on a variety of factors including sharemarket returns which fluctuate over time. I note Treasury has completed a comparative analysis to the one run by the fund that the member refers to which results in a significantly lower estimated fund balance.Grant Robertson: Does he understand that the fund's average performance has been an 8 percent return and that in actual fact it has made $11.2 billion more than the cost of borrowing the Government would have faced?Hon STEVEN JOYCE: Well I appreciate the member's financial advice but actually financial advisers are very clear to say that past performance does not indicate future performance and I am sure the fund would say that as well. But the key question that the member should be considering is: where would that $13.5 billion come from? The simple fact of the matter is that nobody who has proposed putting that $13.5 billion in has indicated where that might have come from. Would it be increased borrowing reduced Government expenditure or higher taxation?Grant Robertson: Does he realise that the amount of money that his Government was due to put into the Superannuation Fund this year alone will actually be worth more to future superannuitants than the $4 billion he says he is going to save from increasing the age on the basis of average returns?Hon STEVEN JOYCE: Well actually no the member is incorrect. If he thinks you could put an amount in this year—of the amount that was said was going to go into the fund—and that it would return $4 billion a year thereafter then he has definitely been smoking something. The simple reality is that that would never happen. But again the more fundamental question is: where does the $13.5 billion come from?Grant Robertson: Can he confirm that he continues to prioritise borrowing for tax cuts ahead of restarting contributions to the Superannuation Fund that have been consistently earning far more than the cost of borrowing?Hon STEVEN JOYCE: No. What I can say to the member is that if the Government had taken a decision to continue contributions to the Superannuation Fund it would have had to borrow $13.5 billion more on top of the current net debt of $61 billion or it would have had to put up taxes by the same or reduce expenditure by the same. There is no free money for the member's benefit; he would have to say whether the debt was going to be higher the taxes were going to be higher or expenditure was going to be less.Grant Robertson: I will put it simply for the Minister—Mr SPEAKER: Order!Grant Robertson: Has the Superannuation Fund earned more on average over the last 9 years than the cost of the money the Government would have had to borrow if it had contributed to the fund? A simple question Steven.Hon STEVEN JOYCE: The member misunderstands. The Superannuation Fund is not in the Government's net debt calculation because it is hypothecated to future superannuation needs. So if we had put the money in we would have had to borrow it. I know Grant is struggling with this concept but we would have had to borrow $13.5 billion to put the money into the fund and yes they might have made a return on it but we would have still borrowed the $13.5 billion.Grant Robertson: I raise a point of order Mr Speaker. Mr SPEAKER: I will invite the member to ask his question again.Grant Robertson: It was not written down so it will be as close as we can to it.Mr SPEAKER: I can help.Grant Robertson: Well would you like to ask it? Has the New Zealand Superannuation Fund on average earned more than the cost of borrowing to the Government for the contributions it would have made had the Government not suspended them?Hon STEVEN JOYCE: On average yes. [Interruption] But you still have to borrow the money and the member is basically saying that he would either borrow the money and put up net debt or he would increase taxation or he would reduce expenditure. He needs to say which one.