What Future for the Future Fund?

Abstract

This paper questions the rationale for the Future Fund. Contrary to existing policy, it proposes that further budgetary contributions needed to meet the Australian Government's future superannuation liabilities be sourced from the expenses side of the federal budget on a predetermined basis, rather than until recently from budget surpluses ex post. New general formulae are derived for estimating the magnitude of annual budgetary contributions required to stabilise, as well as fully cover, unfunded liabilities many years ahead. Illustrative estimates are then provided of federal budgetary contributions needed to cover the Australian Government's unfunded superannuation liabilities. The paper concludes by suggesting that the superannuation-related activities of the Future Fund be wound up with the transfer of its assets to the trustees of existing government superannuation funds.