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Future fund: not a locked box more a blank cheque.

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Lindsay Tanner MP Shadow Minister for Finance

Wayne Swan MP Federal Labor Shadow Treasurer


Peter Costello’s Future Fund Bill is light on details of the Fund’s investment mandate.

Subsection 18 (1) lets the Treasurer and the Minister for Finance direct the Future Fund Board of Guardians by written directions to spell out the mandate of the Fund. This includes its investment functions, exercise of its powers, whether it invests funds in certain jurisdictions or asset classes.

The Bill makes a mockery of Senator Minchin’s claims reported on 12 May 2005 that the Future Fund “will be at arm's length”.

Instead of a ‘locked box’ safe from the grasping hands of the National Party, the Future Fund’s investment strategy can be directed by Ministers, who are entitled to “consider broader policy and national interest considerations” (Explanatory Memorandum p13) . Snake oil merchants will be dusting off their plans for visionary investments in marginal Coalition seats.

The Bill earmarks $18 billion for the Fund to be transferred by July 2006 but leaves open significant questions about what will happen to Telstra. Questions that need to be answered include: how many of the Government’s 6.446 billion Telstra shares will

be dumped into the Fund? What is the timetable for that to occur, at what price will they be transferred at and whether it will vote its shares while they are in the Fund? Transfers don’t even need a ministerial determination.

The Future Fund Bill introduced today leaves significant questions unanswered about the extent of the investment mandate, the relationship between Ministers and the Board and what will happen to Telstra.

It is time Senator Minchin came clean, filled in the detail and guaranteed that the National Party won’t be able to raid his so-called locked box.

Wednesday 7 December 2005 Contact Lindsay Tanner 0419 881 282 or Jim Chalmers 0417 141 676