Peter Lindsay (Herbert, Liberal Party) Share this | Hansard source

Running the government’s budget is really no different from running your own personal household budget; it is just on a bigger scale. Every mum and dad who reads this speech will know that, in their household, if they continue to run up a liability and make no provision to meet it when it needs to be met, they are going to be in a spot of bother; there will be trouble. The Commonwealth of Australia is no different. If the Commonwealth runs up and continues to increase liabilities and makes no provision to pay out those liabilities, then the Commonwealth will be in a lot of trouble. It is pretty simple. I know, in the jargon of things, there can be all sorts of explanations about why that is not so, but I am a pretty simple person. I have found that, in life, if you treat things in a straightforward manner and look at things in a straightforward way, you get to the right answer, which is that we have responsibility. If we are allowing a liability to accumulate, then we have to equally make provision to meet that liability when it falls due. All the big words under the sun, all the philosophy and so on really does not change the fact that one day somebody has to pay.

It is prudent of the government to make provision to meet the Commonwealth’s unfunded superannuation liability. I know the amendment that has been moved by the opposition looks pretty fair. It states:

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the income stream from the Fund should be used for productive national economic purposes rather than being set aside solely to offset the cost of public sector superannuation as the Government intends”.

But I would ask the opposition: why is it that other governments have already gone down the path that the Future Fund Bill 2005 is going to take the Commonwealth of Australia? Why is it that Labor state governments in Australia have the same view as the Commonwealth? Why does the state that I come from, Queensland, have the Queensland Investment Corporation? Of course, it is to strengthen their balance sheets and to address the unfunded superannuation liabilities—exactly what the Future Fund being proposed tonight is designed to do. The Australian government is doing no more than responsibly catching up with its state Labor counterparts. Similarly, there are a number of nations around the world who have already adopted what is in effect a future fund. France, Ireland, Norway, New Zealand and Canada have established funds similar to the Future Fund. I do not quite understand why the Labor Party has moved this amendment tonight knowing that other state Labor governments in Australia have the same view as the Howard government, that we need a fund to meet the liabilities of our Public Service superannuation. There is nothing wrong with that. It is a prudent thing to do.

I know it sounds good to say that we should be investing in productive national economic purposes, but we have a liability and, first and foremost, that is what has to be met. I know that as soon as the government announced the Future Fund the Leader of the Opposition jumped into the media by promising to raid the Future Fund. He wanted to make expensive promises and he told the Northern Star newspaper in Lismore, I believe, that he intended to improve the Pacific Highway in the Northern Rivers and he planned to commandeer Treasurer Peter Costello’s Future Fund. Of course, that is why the fund legislation locks up the money so that it cannot be commandeered.

That is irresponsible. If you establish a fund to meet an unfunded liability, that is the purpose for which it should be used. Through the provisions of this bill the government is intent that that will happen. It is going to be an independently managed fund of assets that will be sourced from future budget surpluses and the proceeds of asset sales. The fund aims to grow to match the Commonwealth’s unfunded superannuation liability by 2020. We are talking about a lot of money—over $100 billion. That is why it is very important that action is taken now, particularly in relation to what we have all read in the Intergenerational report and what other countries have read in their intergenerational reports.

I note that an article in the New York Times in December last year congratulated Australia for having the courage to face up to these unfunded liabilities so that we can pay our bills and for not taking the politically attractive option of spending the money—because once it is spent, it is spent, whereas with the fund that money will grow. It is going to be invested in safe areas. There is a broad direction from the government on what the fund may and may not do. For instance, there will be a prohibition on taking over publicly listed companies, a prohibition on borrowing and restrictions on the use of derivatives for speculation or leverage, and the fund will be restricted to investment in financial assets. It is a prudent way ahead for the Australian government and the Australian people.

The board will be independent and appointments will be for five years, which will help protect appointments from short-term political cycles. Of course, the Future Fund will appear before Senate estimates and be subject to other forms of parliamentary accountability. I support the establishment of the Future Fund. I support measures in the bill aimed at ensuring it will not be raided by future governments. I support the government’s vision in looking ahead to the liabilities that we will face as a nation in the out years and due to the ageing of the population. I support this bill.

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