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EYE-BALL Guru on – The ‘Future Fund’ and its origins …

March 16, 2012
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The ‘Future Fund’ and its origins …
The ABC ran a story this morning about Nick Minchin’s support for the decision ‘not’ to appoint Peter Costello as the Chairman of the ‘Future Fund’.    Ex Coalition Treasure under Howard set up the Future Fund with proceeds from the Telstar sale.  See part of the ABC story below:

The Future Fund – at a glance

Part of ABC story Headline: Minchin backs Gonski over Future Fund ‘shemozzle’ | Full ABC Story Linked on-line here |

  • Set up by then-treasurer Peter Costello in 2006 to help future governments pay for rising public sector superannuation costs caused by Australia’s ageing population.
  • It does this by delivering investment returns on contributions.
  • The fund held $73.07 billion as of December 31, 2011.
  • The set-up cash came from budget surpluses and proceeds from the sale of Telstra.
  • The money is managed by the Fund’s Board of Guardians and the Future Fund Management Agency.
  • The money can’t be withdrawn until 2020, except to meet operating costs, or if assets rise above a target asset level – set at $103.2b for 2011-12.
  • Investment strategies are run according to rules set out in this document.
  • David Murray was the first chairman, and his initial five-year tenure was extended by another 12 months.
  • Then-prime minister Kevin Rudd appointed Mr Costello to the board in December 2009.
  • Fund bosses also manage assets belonging to the Education Investment Fund ($4.69b); the Building Australia Fund ($7.61 billion); and the Health and Hospitals Fund ($4.01b).

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For more info visit the Future Fund website

I have always believed there was a possible ‘Class Action’ lawsuit against the Federal Government in the way they sold off Telstra – how those who could not afford the $2000 to purchase their entitlement got stiffed when those entitlements went to the wealthy … even Howard’s ministers got in on the action after being told to stay away – MP’s Moore and Parer got sacked over the scandal …

Reading the above gives a new boost to the theory that the Telstra proceeds were used to cover the Superannuation costs of a ‘few’ Australians as opposed to be used for the benefit for all Australians.

Why should the Public Service have exclusive use of sale proceeds from the sale of a National Asset in Telstra?

Private Superannuation funds operate within the free market place – it would seem that the superannuation funds paid by Public Service employees before the Future Fund was established – needed a topping up to cover and be able to self fund the annuity payouts of retiring Public Servants and future obligations of current employees.

Given the generous nature of the MP’s superannuation scheme and the early withdrawal options applicable to long serving MP’s – the question that needs to be asked is why were Government contributions needed to cover the obligations of the Public Service employees superannuation entitlements in the first place?   Was the Public Service Superannuation fund insolvent?

The Use of Telstra sale proceeds during a time of healthy Budget surplus’ in 2006 – begs the question of why those funds were not used for the benefit of all Australian taxpayers.

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To have your say where it counts: – contact your Local Federal Representative and have your say – please use the links below to find your Local Member and let them know how you feel about this or any other topic that you feel strongly about – or you can just post a comment below and let off some steam. [Links updated 23rd Feb 4:00pm Sydney Time due to Federal Government page move.]

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The EYE-BALL Guru …

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