“Governments must not be allowed to use the $200 billion sovereign wealth fund to support nation-building,” declared the retiring Future Fund chairman Peter Costello in Nine Entertainment’s AFR. Peter is also chairman of Nine Entertainment. Michael West reports.
How lovely it is to preside over a lazy $205b – a largish lump of money whose apparent purpose is to be in and of itself. Lovely too to utter sweet nothings to your foot-soldier on the prime media real estate, which is the back-page Chanticleer column in the AFR, without being accosted by bothersome questions such as, what is the Future Fund actually there for?
There was a clue provided in the very last paragraph of the long story: “It’s been fantastic, [says Costello]. “The level of respect that the Future Fund enjoys around the world is enormous. There is no financial institution or investment house that wouldn’t beat its way to the Future Fund’s door.”
One would tend to command fantastic and enormous respect – and encounter those who would beat their way to one’s door – if one were to be forking out $400m in fees a year for the pleasure of managing money.
As John Abernethy put it in a letter to the Editor today – John is one fund manager who is evidently not on this glorious gravy train:
Chanticleer’s interview with retiring Future Fund Chairman Peter Costello – “Keep your hands off the Future Fund” – highlighted why Treasurer Jim Chalmers needs to review the Funds purpose as a matter of urgency.
Contrary to Costello’s claim, the Future Fund is not a sovereign wealth fund. Rather, it is a pension fund that was created to eventually pay the unfunded defined benefits of ex-Commonwealth public servants. It was supposed to begin paying pensions in 2020 but that milestone was postponed until to 2027.
Now Costello wants to delay any payouts for another ten or twenty years. If that suggestion was followed, then in 2047, most of the beneficiaries will have surely passed on, making the Future Fund quite unique – a pension fund that never paid a pension!
Peter the Liberal Party Maharishi did make the valid point in his article that the Future Fund would encounter criticism were it to use the money to put the money to good use – rather than, say, invest in Israeli weapons manufacturers who were profiteering from killing thousands of children in Gaza; as is its investment in Elbit Systems.
Future Fund profits from bombing of Gaza thanks to Elbit investment
Peter’s argument is of the genre, ‘don’t walk out the door in the morning or you might get run over by a bus’.
The Future Fund appears to have an identity crisis. Is it a sovereign wealth fund? Because it was designed and legislated as a scheme to pay public servants their retirement benefits. And as this has been delayed somewhat, could it become the pension fund which ne’r paid a pension?
Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.