Treasurer Scott Morrison to quarantine Future Fund until 2026
THE TREASURY wants to bring in a decade-long ban on raiding the $130 billion Future Fund to pay for spiralling superannuation costs.
TREASURER Scott Morrison has ruled out drawing on the $130 billion Future Fund for the next decade.
Mr Morrison told The Weekend Australian he wants to quarantine the fund until at least 2026 to prevent a premature raid on its coffers and to safeguard future taxpayers from the high cost of covering public servants’ lavish defined-benefit superannuation payouts.
Speaking ahead of next week’s budget the Treasurer said the Future Fund did not yet have enough resources to cover the full cost of the public-sector superannuation payouts, and tapping in to it early would drain the fund.
As such Mr Morrison is set to put back by six years the current the legislated date of July 1, 2020.
The move will force the government to use further borrowings over the medium term to partly fund the payouts, set to increase to an $8bn-a-year cost to the taxpayer.
Mr Morrison told the paper it made no sense to draw down the Future Fund’s assets, which have been earning 7 per cent a year, when the government could borrow for no more than 2.8 per cent.
“I’m doing this to respect future taxpayers,” Mr Morrison said. “Ten years or 15 years down the track, the unfunded super liability problem would still be there. We want the Future Fund to be able to do the job for which it was set up.”
His decision was backed by former treasurer Peter Costello, who now chairs the Future Fund.
He said putting off the maturity date would allow the fund to grow to a forecast $300bn by 2030 so that “it will cover the cost of all unfunded liabilities” and “take all those liabilities off the taxpayer for good.”
The full version of this story was published in The Weekend Australian
Originally published as Treasurer Scott Morrison to quarantine Future Fund until 2026