Senator MINCHIN (Minister for Finance and Administration) (5:42 PM) —I do not want to prolong this debate, but those remarks cannot go uncontested. I have explained ad nauseam, I think, in other forums, particularly estimates, why we are not putting this money into the CSS-PSS structure. I have made that clear. Senator Sherry clearly has still not got his head around what we are doing here. For 100 years, Australian governments have not funded their liabilities to former public servants’ superannuation. What happens is that the money is simply paid out through the budget each year. I think it is currently $7-odd billion, maybe $5 billion; I cannot remember the exact figure off the top of my head. Whatever it is, the reasonably substantial amounts that currently go out each year on public sector superannuation for former public servants come straight off the budget. That has been the case for 100 years.

The Labor Party had 13 years in office to change that if they wanted to. They did not. Indeed, they were not able to because they were in deficit the whole time. They were essentially paying their public sector superannuation liabilities with borrowed money. We are in the much better position of having rescued the fiscal position of this country. We are now in a position where we have effectively paid off general government debt and we are now accumulating surplus funds. At the moment, they are held by the Reserve Bank. We have made the decision that, to the extent that in the near future we will be accumulating additional surplus funds—which is an appropriate consequence of our responsible fiscal policy—there will be, in all likelihood, proceeds of asset sales. These should be invested wisely for the nation’s future.

It so happens that we have made the decision that the best way to use this fund is to relieve the pressure on future budgets, because, as Senator Sherry knows, our Intergenerational report forecast that, without changes to existing policy parameters, the Australian government budget will go into chronic deficit from around the middle of the next decade. We are very conscious of that, and that is one of the reasons this fund has been created. What will happen in 2020 is that governments that succeed us will be in the blessed position of having their budgetary obligation to retired public servants eased by the fact that our government set up this fund. Those budgetary obligations can be met by drawing down on this fund which we are so wisely setting up.

I urge Senator Sherry to get his head around exactly what we are doing here. We are not setting up a superannuation fund per se; we are setting up a mechanism to relieve future governments of what will be a very difficult burden in the future, when they are under enormous fiscal pressure because of the ageing of the population, with respect to the legal obligations to pay superannuation for former public servants.