Cameron Thompson (Blair, Liberal Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Would the Treasurer update the House on the current status of the Future Fund? Is there a risk that the Future Fund may be raided for political purposes?

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

I thank the honourable member for Blair for his question. Unlike most Australian employers, the Australian government has never funded the superannuation entitlements of the public sector. Since Federation, the Commonwealth has employed public servants and just figured that it could pay their superannuation entitlements out of recurrent revenue of future generations. That unfunded superannuation liability currently stands at around $100 billion. Although the Commonwealth has closed most of its defined benefit schemes, such as the CSS and the PSS, its military schemes are still open, and that superannuation liability, currently at around $100 billion, is expected to grow to $148 billion by 2020.

That was the situation of every previous Australian government, of whatever political complexion, until this government decided to fund the superannuation liability of the Australian public sector. This government decided to put aside and provision, for future generations, the funds to cover that liability and, by doing so, to free future generations of inherited liabilities from the past. That was the establishment of the Future Fund, not only so that our defence personnel could be guaranteed that their superannuation would be paid, but so that future generations would have that liability lifted from their backs. The government now has, as against the current liability of $103 billion, about $51 billion in assets in the Future Fund. As the IMF said:

Australia’s Future Fund ... looks like a good model for other countries: certainly there are few, if any, industrial countries as well prepared for the ... costs of an aging population as Australia.

The OECD said this in 2006:

The Future Fund is explicitly quarantined from other possible medium-term objectives. This is laudable ...

If the Labor Party gets elected at the next election, the Future Fund is over because the Labor Party has promised to open up the Future Fund and take out $2.7 billion for a failed telecommunications policy. Why would you do that? You have Telstra lining up to build fibre to the node. You have Optus lining up to build fibre to the node. We now know that there are investment banks that want to come in and build fibre to the node. The private sector is prepared to carry the full costs and yet the Australian Labor Party, for ideological reasons, wants to open up the Future Fund, raid it for $2.7 billion, and get into the business of building fibre to the node. The reason the Labor Party wants to open up the Future Fund and raid it is the Labor Party wants to treat the Future Fund as a political vehicle for its own electoral prospects. Once you open the Future Fund for one purpose, you open it for all purposes.

We have had the member for Melbourne saying he is going to open up the Future Fund and put it into infrastructure, but only hard infrastructure. We have had the member for Perth saying he is going to open the Future Fund and put it into education. We will have member after member after member, once you have established the principle, determining to open the Future Fund and to dissipate the savings of future generations. This is an important fork in the road for Australia. There was no other government in Australian history that had the wit to establish a Future Fund. If the Australian Labor Party gets elected, it will destroy it. It will go down in history as the government that destroyed Australia’s future opportunities. It is an important financial point; it is important for our children. This is the government that freed our children from debt. We will free them from liability, and the biggest threat to their future comes from this Leader of the Opposition and the Australian Labor Party.