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Wednesday, 28 March 2018
Page: 3050


Mr WYATT (HasluckMinister for Aged Care and Minister for Indigenous Health) (11:36): I move:

That this bill be now read a second time.

Today I introduce the Aboriginal and Torres Strait Islander Land and Sea Future Fund Bill 2018. The bill establishes the Aboriginal and Torres Strait Islander Land and Sea Future Fund, an investment fund managed by the Future Fund Board of Guardians, which will ensure the financial sustainability of the Indigenous Land Corporation.

The existing Aboriginal and Torres Strait Islander Land Account was established to provide ongoing funding for the Indigenous Land Corporation to assist Indigenous Australians acquire and manage assets. However, the land account's restricted investment mandate prevents it from generating the investment returns needed to sustain the annual CPI-indexed payments to the Indigenous Land Corporation.

From July to September 2017, the Indigenous Land Corporation conducted nationwide consultations with Aboriginal and Torres Strait Islander people on this issue. A clear majority of stakeholders supported changes to improve the sustainability of the Aboriginal and Torres Strait Islander Land Account—by transferring the investment function to the Future Fund Board of Guardians and allowing the investment of land account funds in a broader range of financial assets.

The government has listened and now seeks to implement this recommendation.

The bill would establish a new Aboriginal and Torres Strait Islander Land and Sea Future Fund, to be comprised of the funds of the land account. The new fund will place this important Indigenous endowment fund on a sustainable footing so it can deliver on its purpose—to provide long-term funding to the Indigenous Land Corporation to purchase assets on behalf of Indigenous Australians.

The current arrangements for land account investments make it all but impossible for the land account to generate the investment returns needed to sustain the annual payments from the land account to the Indigenous Land Corporation. Land account investments are restricted to low-earning cash and cash-like products by section 58 of the Public Governance, Performance and Accountability Act 2013. Investments are currently made by the Department of the Prime Minister and Cabinet.

Moving the investment responsibility of the fund to the Future Fund board will allow these funds to be invested in a broader range of financial assets, increasing the likelihood of more sustainable returns. The increased range of investment products and the ability to take on more risk requires a specialist investment manager. The Future Fund board, a trusted and proven investor of public money, would manage these investments.

The government's proposed legislation would enhance the Commonwealth's ability to make payments to the Indigenous Land Corporation. Further, additional payments can be made by the Minister for Finance and the Minister for Indigenous Affairs, after considering advice from the Future Fund Board of Guardians and any other matters that those ministers consider relevant. This would allow the ministers to decide whether to make an additional payment based on the impact it would have on the financial sustainability of the Aboriginal and Torres Strait Islander Land and Sea Future Fund.

Securing sustainable funding arrangements for the Indigenous Land Corporation will provide significant benefits to Aboriginal and Torres Strait Islander people, enhancing their economic and social wellbeing and contributing to closing the gap.

Debate adjourned.