19 December 2013
The Future Fund is for Meeting Unfunded Commonwealth Superannuation Liabilities – Not for ‘Raiding’
Serving and retired military and public service Commonwealth employees would be horrified to read the assertions attributed to Peter Costello, Acting Chairman of the Future Fund, reported in The Australian today (Creator turned chairman declares fund can help us in ‘difficult days’, Andrew White, 19 December, pages 1 and 2, 15 and 22).
They will be outraged that Mr Costello attempted to redefine the object of the Fund by rejecting ‘ … suggestions the fund was a superannuation fund for public servants, calling it “Australia’s sovereign wealth fund”.’
Contrary to what Mr Costello might say, the Future Fund is not simply the ‘money of the people of Australia’ – it is the money put aside to “… make provision for unfunded [Commonwealth] superannuation liabilities that will become payable during a period when an ageing population is likely to place significant pressure on the Commonwealth’s finances.” (Future Fund Act 2006, s. 3 (2)). A ‘broader role’ is not provided for in the legislation.
Statements like Mr Costello’s [as a ‘guardian’ of the Fund] put seriously at risk the confidence that should exist between the Commonwealth and its employees, who must be assured that their employer will honour its obligations to them in retirement.
It now behoves the Government to urgently correct what Mr Costello said, and to assure its employees and retirees that their current and future superannuation income lodged in the Future Fund is secure.
The Government should also declare that it shall deposit employer contributions into the Future Fund, as regularly as all other employers are required to make “superannuation guarantee” contributions. Only in that way can those employed in the public sector be assured that the Fund will have sufficient assets to meet its future liabilities.