Govt Life guarantee to be phased out

Press, 30 January 1986, Page 6

Govt Life guarantee to be phased out

By

SIMON LOUISSON

in Wellington

The Cabinet has approved changes to legislation covering the Government Life Corporation. They will be introduced early in the new session of Parliament.

The Minister in Charge of the corporation, Mr Goff, said the legislation would reduce Government and Treasury control, and allow the corporation to diversify and compete with the private sector. The legislation will phase out the Government guarantee to policyholders but this will not apply to existing holders.

Responding to a call by the Opposition’s Chief Whip, Mr Don McKinnon, for an investigation by a select committee into its purchase of the Broadbank Corporation, Mr Goff said he had no objection to the chairman and chief executive appearing before such a committee so long as commercially sensitive information was not made public. However, Mr Goff labelled Mr McKinnon’s call “politicking” with a view to the imminent shadow cabinet reshuffle. Mr Goff said that such decisions were made by the select committees and were not subject to interference by Ministers.

He said that if the Opposition’s concern was genuine, he would allow immediate access to senior management of Government Life.

An allegation that Ministerial consent for the Broadbank purchase was required was incorrect, said Mr Goff. A decision to invest funds did not require Ministerial approval. He said it would be improper for the Minister to interfere and the call for an inquiry smacked off the ad hoc interference of the Muldoon Administration. Assertions that Government Life should be made private were nonsense be-

cause the Government had not provided funding since 1873.

He rejected Mr McKinnon’s suggestion that the Government guarantee to Government Life now extended to Broadbank. The guarantee covered only the life and superannuation policies, not investments, he said. While Broadbank was Government Life’s largest investment it made up only a small percentage of the corporation’s $1.2 billion assets.

Mr Goff emphasised that Broadbank would remain a separate organisation with an independent board under Government Life’s ownership.