is an independently managedsovereign wealth fundinto which theAustralian Governmentdeposits funds to meet the its future liabilities for the payment ofsuperannuationto retired civil servants of theAustralian Public Service. At 30 June 2018, it was valued at A$146 billion.
The board of the Future Fund also manages another four public asset funds, giving it responsibility for investing A$175 billion on behalf of the Australian Government.
The stated aim of the fund was to holdA$140 billion by 2020;2which would fund the A$7 billion in superannuation payments each year from the federal budget. Withdrawals from the fund to pay superannuation benefits can only take place once the superannuation liability has been fully offset or 1 July 2020, whichever is the earlier.3However, the government indicated in 2017 it intends to allow the fund to continue to accumulate until at least 2026/27 before making withdrawals.
The Future Fund Board is currently also responsible for four other Nation-Building Funds:
Building Australia Fund An infrastructure fund to provide investment in infrastructure projects (including road, rail, ports and broadband). At 30 June 2018, it was valued at A$3.9 billion.
Education Investment Fund A fund to provide capital investment in higher education and vocational education and training. At 30 June 2018, it was valued at A$3.9 billion.
DisabilityCare Australia Fund A fund to contribute to the cost of theNational Disability Insurance Scheme. At 30 June 2018, it was valued at A$14.7 billion.
Medical Research Future Fund A fund to disperse interest generated to medical research. At 30 June 2018, it was valued at A$7.18 billion.
Inaugural chairman of the board of guardians,, pictured in 2008.
Investment of the Future Fund is the responsibility of the Future Fund board of guardians with the support of the Future Fund Management Agency. The Future Fund is overseen by an independent board of guardians selected on the basis of their expertise in investment management and corporate governance. The current board composition is:4
Hon. Costello was initially appointed as a Guardian on 18 December 2009 for a term of five years and appointed as chair with effect from 4 February 2014 for a term of five years
The Board was chaired bybetween 2006 and 2012. Amidst some controversy it was announced thatDavid Gonskiwould succeed Murray as independent non-executive chairman when Murrays term expired on 3 April 2012.5678At the same time, Steve Harker, an investment banker fromMorgan Stanleyin Australia, replaced Brian Watson as a Guardian.David Gonskichaired the Board until January 2014 when it was announced that he would leave to chair theAustralia and New Zealand Banking Group. Costello was appointed the interim chair until the announcement of his permanent chairmanship in February 2014.
On 11 September 2004, theFederal Treasurer, Peter Costello, announced that the Future Fund would be established following the2004 federal election.9Some economists questioned whether the government could save money this way and likened it to saving ones own IOUs.10TheFuture Fund Act, 2006(Cth) receivedRoyal Assenton 23 March 2006. On 5 May 2006, A$18 billion, derived from government surpluses as well as income from the sale of a third ofTelstrain its ongoing privatisation, was deposited into the fund.11On 28 February 2007, the government transferred the Commonwealths remaining 17% stake inTelstra, valued at A$8.9 billion, into the Fund.12These contributions and transfers increased the Fund to overA$50 billion by the end of the 2006-2007 financial year.
In March 2007, the oppositionLabor Partyannounced it would withdraw A$2.7 billion from the Future Fund to finance theNational Broadband Network, an initiative to install broadband internet infrastructure across Australia, if it won the2007 election; this proposal prompted government ministers to proclaim that Labor intended to raid the Future Fund for their own means.13Labor later indicated that the use of any funds from the Future Fund towards a national high speed broadband network will have to comply and meet all requirements of any commercial investment. This included producing a commercialrate of returnon the invested funds, with all profits being returned into the Future Fund allowing further investment.
In May 2007, it was revealed that theChicago-basedNorthern Trust Corporationhad won a competitive tender process to manage the Fund. Rick Waddell, President and Chief Operating Officer of Northern Trust, indicated that Australian companies did not have the expertise to manage the Future Fund.14Northern Trust stood to collect A$30 million in annual fees. Controversy arose when it was realised that the Fund will be managed by a foreign bank with no base in Australia. National secretary of the Finance Sector Union Paul Schroder estimated that around 100 jobs will be lost when the US company starts managing the Fund from Singapore using staff from India.15Northern Trust was linked to theEnron scandal.14General Manager of the Future Fund Management Agency, Paul Costello, told a Senate estimates committee hearing that We were not concerned that this represented a risk to us in terms of the arrangements that we were seeking to put in place with Northern Trust.16
In his2008 Australian federal budgetspeech, the Treasurer,Wayne Swanannounced three new Nation-Building Funds, also to be managed by the Future Fund Board.17These included a $20 billion Building Australia Fund to invest in roads, rail, ports and broadband; an $11 billion Education Investment Fund, which absorbed the $6 billion Higher Education Endowment Fund set up by the previous government; and a $10 billion Health and Hospital Fund.18In that budget and the following2009 federal budget, the LaborRudd Governmentpromised A$41 billion to create these new funds.1919
The fund become a member of theInternational Forum of Sovereign Wealth Fundsand signed up to theSantiago Principleson best practices for managing Sovereign Wealth Funds.20As a member it publishes how it adopts and implements the principles within its governance procedures.21
In May 2013, a DisabilityCare Australia Fund was established by theDisabilityCare Australia Fund Act 2013. The Fund will fund theNational Disability Insurance Schemeand is also to be managed by the Future Fund Board. The Fund is to receive contributions from the increase in themedicare levyby 0.5% to a total of 2% from 1 July 2014.
In theMay 2014 federal budget, theAbbott Governmentannounced its intention to establish theMedical Research Future Fund22and the Asset Recycling Fund and to discontinue the Building Australia Fund, Education Investment Fund and Health and Hospitals Fund. These changes are subject to the passage of legislation.3The Senate approved the establishment of the Medical Research Future Fund in August 2015, to be managed by the Future Fund, with interest generated going to medical research, beginning with $10 million in 2015, growing to $390m over the following three years.23
In 2016 it was announced that the Future Fund,Queensland Investment CorporationandAGL Energywould form thePowering Australian Renewables Fund(PARF)investing in two of Australias largest solar plants at the time.24
In May 2011 the Future Fund was criticized byThe Agenewspaper for investing A$135.4 million in 15 foreign-owned companies involved in the manufacture of nuclear weapons for the United States, Britain, France and India.25Information about the investments was obtained through a freedom of information request by theInternational Campaign to Abolish Nuclear Weapons.26
In February 2013, the Future Fund announced it would exclude primary tobacco producers from its investment portfolios.
The total funds held under management, as at 31 December each year, inclusive of funds held in the Building Australia Fund, the Health and Hospitals Fund, the Education Investment Fund and the DisabilityCare Australia Fund, are:
Australian Reward Investment Alliance, superannuation trustee for Australian Government employees
. Future Fund – Australias Sovereign Wealth Fund. 29 August 2018.
Marris, Sid; Korporaal, Glenda (23 January 2007).Future Fund gets time-out on Telstra stock.
. Future Fund Board of Guardians. 3 April 2016
Evans, Michael (13 March 2012).Sydney bigwig to head Future Fund.
Wright, Jessica; Yeates, Clancy (16 March 2012).Murray wades into Future Fund fight over Costello.
Packham, Ben; Massola, James (15 March bor refuses to release report showing Future Fund board wanted Costello, not Gonski.
Griffiths, Emma (16 March 2012).Minchin backs Gonski over Future Fund shemozzle
ELECTION 2004 New fund for future super bills,
Murphy, Katharine (28 March 2007).Labor seizes on Libs Future Fund backing.
Ryan, Peter (24 May 2007).Northern Trust defends Enron connection.
Alberici, Emma (22 May 2007).Foreign bank to manage $51b Future Fund.
We wont raid $44bn fund pool, says PM Kevin Rudd.
International Forum of Sovereign Wealth Funds.IFSWF Our members. Archived fromthe originalon 27 September 2016
futurefund.gov.au.Building a long-term sustainable sovereign wealth fund under the Santiago Principles
Medical Research Future Fund finally gets Senate approval; The Australian; August 13, 2015
Oakes, Dan (26 May 2011).Australia investing in nuclear arms.
Wright, Tim (May 2011).Nuclear weapons and Australias Future Fund
(Press release). International Campaign to Abolish Nuclear Weapons. Archived fromthe original
. Future Fund Board of Guardians. 2011.ISBN
Commonwealth Government-owned companies of Australia
Articles with dead external links from May 2016
All Wikipedia articles written in Australian English
This page was last edited on 1 September 2018, at 08:52