The Australian Government has directed the nation’s A$230 billion sovereign wealth fund to consider “national priorities” in its investment decisions.
Treasurer Jim Chalmers said the Future Fund’s priorities would be increasing the supply of residential housing, supporting the energy transition as part of the net zero transformation of the economy, and delivering improved infrastructure including economic resilience and security infrastructure
“The Fund’s primary focus will remain on maximising its returns, and at the same time, our changes will help it maximise its role in delivering for Australians in the future,” Chalmers aid in a media statement.
He said the Government would not start drawdowns from the Fund until at least 2032–33, by which time it was expected to grow to $380 billion.
The fund’s primary objective would continue to be to maximise returns, the benchmark return rate would remain at 4-5% above inflation rate over the long term, and there would be no change to the expected risk profile.
The decision was welcomed by the Future Fund but criticised by the Opposition.
“The Government’s decision to defer withdrawals from the Future Fund until at least 2032-33 provides the Future Fund with the confidence to provide more focus and resources to the areas of national priority identified in the new Investment Mandate that align with our risk and return hurdle,” Future Fund Board of Guardians Chair Greg Combet said in a statement.
Opposition Liberal Party Deputy Leader Sussan Ley said it was inappropriate for the Labor Government to change the Future Fund’s mandate and direct the fund’s investments.
“Let the Future Fund get on with its job,” Ley said in an interview on Sky News Australia.
The Future Fund was established in 2006 with $60.5 billion from budget surpluses and the Government’s remaining shares in Telstra and investment returns increased the value to $229.7 billion.