Treasurer eyes a once-in-a-century pot of taxpayer gold

Federal Treasurer Jim Chalmers is making a fundamental change to Australia’s once-in-a-century “independent” sovereign Future Fund. Picture: Martin Ollman/NewsWire

Jim Chalmers is making a fundamental change to Australia’s once-in-a-century “independent” sovereign Future Fund, to provide investment “priorities” where there were none – priorities that align with Labor’s political and ideological agenda.

The Treasurer has been cautious in the way the changes to the $230bn fund are to be made but there is no getting around the fact establishing new priorities that must be considered – including the transition to a net-zero economy and residential housing – will change the way the fund operates.

There is a real danger that the independent Future Fund, which was set up to invest its returns and have its earnings boost the budget bottom line, will morph into a directed investment scheme like the Clean Energy Finance Corporation, which already exists to help renewable energy.

As Peter Costello – the man who made the Future Fund possible as treasurer in the Howard government and who chaired it successfully for so long after retiring from parliament – has said: politicians must be kept away from the investment strategy and locked out of the cash box.

Costello once said: “The Future Fund can only be spent once. Then it’s gone.”

Former treasurer and Future Fund chair Peter Costello. Picture: Jane Dempster

Chalmers is not suggesting any immediate draw down from the $230bn or even until it reaches $380bn by 2032-33, but when new priorities, new parameters for investment, are imposed, they change the dynamics.

This is the danger of introducing priorities that alter the “independence” of the fund’s management.

The new priorities for investment are: increasing residential housing; supporting energy transition to net zero and; improving infrastructure.

Since 2006, the Future Fund has lifted from $60bn to its current balance and will be more than six times larger than it started by 2032-33.

There is no sign of a lack of performance or low earnings to prompt any change.

Yet, the Albanese government is going to impose priorities for its favoured concerns where there are already specified, directed agencies, including the Clean Energy Finance Corporation, the National Reconstruction Fund and Housing Australia.

This sounds like Chalmers pushing for a more caring economy using the fruit of Costello’s surpluses.