Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Hansard source

I thank the honourable member for Deakin for his question. Under the Charter of Budget Honesty Act the government is required to produce an intergenerational report every five years to benchmark the intergenerational equity and the way in which our country is preparing for the great challenge of the ageing of the population. The first report was released in 2002 and the next one, the five-yearly update, will be released next week.

We have made some progress since the first Intergenerational report was released, particularly in the area of retiring Labor debt and establishing the Future Fund to meet unfunded superannuation liabilities. The OECD, in its annual survey of Australia, lauded the establishment of the Future Fund, saying:

The Australian government has established the “Future Fund” to build up assets to pay for future pension liabilities ... The Future Fund is explicitly quarantined from other possible medium-term objectives. This is laudable, especially in the light of cross-country evidence which shows that attempts to pre-fund public pension liabilities by accumulation in social security systems have, without a high degree of explicit separation, often been thwarted by increases in general government expenditure.

So the OECD was saying that it is very important to quarantine the funding of future liabilities from other spending, because other spending can completely undermine the objective that you have in funding those pension liabilities. It is making the point that if you set up one of these funds, the moment you start raiding it for other expenditures is the moment you undermine the whole improvement that it is designed to have.

I was very interested to see more support for the independence of the Future Fund in today’s Australian at page 23, in an article by Joseph Kerr under the headline ‘Tanner promises to run a tighter ship’. Mr Tanner made lots of promises in this article, but get a load of this one. This is what the Australian records this morning:

The Future Fund needed to be more independent of government, as the governance arrangements currently allowed for too much government interference.

So here is a party that has announced it is going to—

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