A.C.C. share loss

Press, 2 December 1987, Page 20

A.C.C. share loss

Sir—You report (November 19) that the Accident Compensation Corporation has lost 41 per cent of the value of its share portfolio. Does this Government department speculate on the stock exchange with its compulsory levies instead of investing them safely in term deposits with, say, the trading banks? In view of the recent huge increases in A.C.C. levies, I would have thought that this item of news would have unleashed a storm of angry comments, but as far as I am aware it seems to have passed unnoticed. Since when, and under what authority, has the A.C.C. been authorised to buy company shares? — Yours, etc A. C. NEWTON. November 23, 1987. [The Minister of Labour, Mr Rodger, replies: “The A.C.C. has, since its inception in 1974, been involved in a wide variety of investments — short-term and long-term deposits, mortgages, debenture stock, Government and local body stock, the National Provident Fund and the sharemarket. Such investments are allowed under the Accident Compensation Act, although they are subject to the approval of the Minister of Finance. Each year the A.C.C., through an investment advisory committee comprising sharebrokers, accountants, etc., develops an investment strategy in line with the type of investments the Minister of Finance has approved. The A.C.C. is not a speculator in the sharemarket. Its share investments are longterm and, even with the losses incurred in the recent sharermarket collapse, the shares are

still valued at considerably more than the purchase price. The A.C.C. is a prudent investor, not putting all its eggs in one basket.”]

Sir, —I would like to know who gives the Accident Compensation Corporation authority to do what it likes with the funds collected. When I, as an employer, pay this exorbitant levy I do not expect some faceless public servant to be able to play the stockmarket at his or her whim and fancy. “Why worry?” he says, "if the shares go down we will just charge the employers more. It does not come out of my pocket.” Surely, as a collector of such vast sums of money from one section of the community, it would be logical and ethical to place this money on guaranteed deposit, but then this Government is not known for its logic or ethics. Also, if an amount of 598.8 M is available for playing around with, employers are obviously being overcharged. — Yours, etc., B. M. ALEXANDER. November 26, 1987.