Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

I thank Senator Polley for her gracious remarks at the commencement of her contribution with respect to the work we're undertaking on the Legal and Constitutional Affairs References Committee. It's done on a very, very collegiate basis in the best traditions of this place. Through you, President, I enjoy serving on committees with Senator Polley and Senator Ciccone. I haven't really had an opportunity to serve on committees with Senator McAllister to any extent—

Raff Ciccone (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

You're missing out!

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

Well, I'm sure I would have gained from that as well. Of course, I enjoy serving on the scrutiny of legislation committee with my dear, dear friend Senator Dean Smith with his chairing combination of the iron fist in the velvet glove.

I want to make some remarks at this hour with respect to an article which appeared in the Australian Financial Review on 10 August 2023 entitled 'Chalmers urged to liquidate the $250b Future Fund to pay debt'. There's a reference in that article to a paper that was issued by Mr Dimitri Burshtein called, 'A Future Without Future Funds' a policy of the Centre for Independent Studies. I want to make comments in relation to some of the concepts and proposals contained in that paper.

I want to acknowledge the great work the Centre for Independent Studies has done over a number of decades in promoting what is a foundational principle of my political belief system, the principle of classical liberalism. When you go into my office, you'll walk between a photograph of John Stewart Mill on your left and Voltaire on your right. That probably encapsulates all you need to know about the views I hold. I acknowledge the role that Greg Lindsay undertook in the establishment of the Centre for Independent Studies. It provides an extremely useful mechanism for the promotion of political debate in this country, just as this paper on the Future Fund does.

I don't believe that the Future Fund should be liquidated or monetised in order to pay down debt. I've got three comments I'd like to make in relation to that subject. Firstly, there is much which is contained in Mr Burshtein's article that I do agree with. However, I think there are three additional points that need to be considered, and the first is this. From my perspective, when considering the establishment of funds such as this, state-owned investment funds, the critical question is: what is the source of the funds? I have an objection towards the establishment of such funds using debt, and that goes to the core of my objection to the establishment of the Housing Australia Future Fund. I do not believe it's wise to establish such investment funds through the use of debt and I draw a distinction between funds established through the use of debt compared to funds that are established through the proceeds of the sale of government assets, privatisation processes, and/or the establishment of funds using budget surpluses, as was the case in 2006, when the Commonwealth is in a positive or a very minor debt position. That's the first point, and I note that is fundamental to the way I look at these funds.

Secondly, and we should all reflect on this, when the Future Fund was established in 2005, the assumption was that the Commonwealth's unfunded superannuation liabilities were forecast to be $140 billion by 2020. Here we are now, and as at 30 June 2022 the unfunded superannuation liabilities were $322 billion. That is a deeply concerning figure. I think, to some extent, given the Future Fund has funds over $200 billion, we are quite lucky that the government of the time had the foresight to establish the Future Fund.