Mark Baker (Braddon, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Would the Treasurer inform the House of the latest allocation into the government’s Future Fund? How will this help address Australia’s future financial challenges and are there any threats to this prudent financial management?

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the honourable member for Braddon for his question. I can inform the House that, after the final budget outcome for the financial year 2005-06, I announced that the government would be allocating a further $13.6 billion into the Future Fund, which will join the $18 billion already allocated, bringing the sum standing to the Future Fund at over $30 billion. This will make a major contribution to funding the liabilities of the federal government in relation to superannuation.

The liability of the federal government for superannuation currently stands at around $97 billion or $98 billion. This liability has never been funded in the history of the Commonwealth. The Commonwealth always left the situation to be paid out of future revenues. It was not until this government cleared net debt that we were able to set up a Future Fund, which is now well on its way towards matching that liability with $30 billion, as I said, and also over the next two years we would expect proceeds from Telstra. We would be 30 or 40 per cent of the way towards funding that liability. This is absolutely critical at a time when the population is going to be ageing, when the number of people over 65 compared to the working age population is going to double and when we are going to have all of the costs of increased health care and pharmaceutical benefits. To have cleared net debt and begin building a Future Fund will set Australia up for that great challenge.

Australia’s efforts in this regard have been recognised by the IMF, with the IMF managing director recently saying:

... with the establishment of the Future Fund ... Australia is well placed to face the challenge of ageing population ...

We have also had this recognised by the OECD, which said:

The explicit quarantining of the Future Fund separately from other medium-term objectives is laudable and will make an important contribution to pre-funding the fiscal costs of ageing its own employees.

There is still one thing that concerns the government about the Future Fund—and it ought to concern every taxpayer—and it is this: the Leader of the Opposition, because he cannot pay for the promises that he is out there making as he runs around Australia, is very directly threatening to raid the Future Fund—to raid the provision for Australia’s future, to raid superannuation—for his own political objectives. He has been up in the Northern Star setting out his priorities. Have a listen to this:

Federal Labor’s plans for improving the Pacific Highway ... depends on plans to commandeer Treasurer Peter Costello’s ‘Future Fund’.

That is what it says. So here we are—not only do we have to fund the future and clear the debt but now we have to actually raise the money to pay for the Leader of the Opposition’s promises as well.

Simon Crean (Hotham, Australian Labor Party, Shadow Minister for Regional Development) Share this | Link to this | Hansard source

Mr Crean interjecting

David Hawker (Speaker) Share this | Link to this | Hansard source

Order! The member for Hotham!

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

Last time the Leader of the Opposition was in a financial portfolio, he promised that he would balance the budget—and the budget was a $10 billion deficit. He is like a bear with a honey pot. He cannot keep his paws off the money which belongs to the taxpayers of Australia. Labor would never have had the wit to set up a Future Fund. It would not have the wit to defend it.

Simon Crean (Hotham, Australian Labor Party, Shadow Minister for Regional Development) Share this | Link to this | Hansard source

Mr Crean interjecting

David Hawker (Speaker) Share this | Link to this | Hansard source

Order! The member for Hotham is warned!

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

It would not have the wit to fund superannuation and it ought to keep its hands off the savings of the Australian taxpayer.