Lindsay Tanner (Melbourne, Australian Labor Party, Shadow Minister for Finance) Share this | Link to this | Hansard source

My question is again to the Treasurer. I refer to his previous statement that he had no capacity to influence the Future Fund’s decision to appoint Northern Trust as its global custodian, notwithstanding its involvement in the Enron scandal. Isn’t it the case that section 18 of the Future Fund Act empowers the Treasurer and finance minister to issue investment mandate directions to the Future Fund regarding how the fund manages its investments, and that such directions have actually been issued? What requirements are contained in these directions obliging the fund to ensure that all contractors employed by the fund to handle its investment transactions will act prudently?

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

That shows a fundamental misunderstanding of the act, because the appointment of a contractor to act as custodian is not a part of the investment mandate—nor, under an investment mandate, could you stipulate who was to get a contract in relation to custodian services. It is very interesting, isn’t it, that the member for Melbourne asked this question. His implication seems to be that the government should intervene in relation to who is appointed as the custodian for the Future Fund. The member for Lilley is good at getting to his feet, but when he gets to his feet he generally does not face this way; he generally faces the other way. But members of the parliament might be very interested to know what the member for Lilley had to say on the subject. He was asked this question yesterday: ‘Would Labor consider putting a caveat over the Future Fund legislation to ensure’—and I think this is what you are suggesting should be done—‘that in the future it is managed locally?’ Mr Swan replied:

It’s very important that the Future Fund doesn’t become an object of pork barrel by this Government—

the reason it should not become an object of pork barrel by this government is that it is an object of pork barrel by the Labor Party, but we will move on from that—

very, very important. So Labor has argued consistently that the Future Fund ought to be independent.

Now if it takes those decisions independently it’s entirely a matter for them.

Oh!

Lindsay Tanner (Melbourne, Australian Labor Party, Shadow Minister for Finance) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order going to relevance. The Treasurer is refusing to answer the question.

David Hawker (Speaker) Share this | Link to this | Hansard source

The member for Melbourne will resume his seat. The Treasurer was asked a question on the Future Fund. He is answering that question. I call the Treasurer.

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

I am asked this question: why don’t I exercise a nonexistent power under section 18 to direct who the Future Fund appoints as its custodian? I point out that neither is this an investment mandate nor does the government have a capacity to intervene in the Future Fund. I produce in this parliament as exhibit A the member for Lilley. Exhibit A, the member for Lilley, said:

... Labor has argued consistently that the Future Fund ought to be independent.

Now if it takes those decisions independently it’s entirely a matter for them.

‘Entirely a matter for them’! That is what Labor were saying yesterday—‘entirely a matter for the Future Fund’. But today the member for Melbourne would have you believe that the government ought to intervene and it ought to direct who the Future Fund appoints as its custodian. Too clever by half. Get your story straight. If the Labor Party believe that the government should intervene and direct the Future Fund on who it appoints as its custodian, or its banker, or its chief executive, for that matter, let them stand here at the dispatch box—let them say it. But don’t go around the business community saying that you believe in an independent Future Fund and then sneak up here to the dispatch box trying to lead to an impression that you have a contrary view. This is the modern Labor Party all over: they will walk both sides of the street but they will never have the courage of their convictions. You can have it one way, you can have it the other way, but you cannot have it both ways.