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Beazley sees fund as Magic Pudding.

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Senator the Hon Nick Minchin

Minister for Finance and Administration Deputy Leader of the Government in the Senate

Media Release

53/2005 24 November 2005

Beazley sees Fund as Magic Pudding

Kim Beazley has again confirmed he hasn’t got the ticker to manage Australia’s economy and doesn’t understand the challenges posed to Australian Government finances by our ageing population.

In his speech to the AusRail conference today, the Opposition leader has again confirmed his proposal to raid the Government’s Future Fund to spend earnings on still-unspecified infrastructure projects.

Rather than a serious policy to deal with the growing legal obligations future generations of Australians must pay, Mr Beazley sees the Future Fund as a Magic Pudding he can use to feed Labor’s big-spending ways.

The Government’s plan is to save surpluses and the proceeds from asset sales in the Future Fund and to reinvest the earnings of the Fund, so it grows to around $140 billion by 2020 to match the superannuation liability.

That liability can not be avoided. If Mr Beazley uses the Future Fund to pay for pet projects, he will have to cut other Government spending programs to cover those liabilities - or run up large Budget deficits.

Should Labor win Government, Mr Beazley would demolish the ring fence the Government will construct around the Future Fund - to prevent political manipulation of its capital and earnings - and spend funds set aside to meet Australia’s growing unfunded superannuation liabilities.

The Inter-Generational Report showed that the Federal Budget will be under

considerable pressure by 2020 without reform, but Mr Beazley wants to make that problem even worse by spending the reserves the Coalition Government will put aside to ensure future generations of Australians are not saddled with our liabilities.

Labor’s Building Australia Fund would not be a savings fund, it would be a spending fund. It would push up government spending, increase the pressure on interest rates and fail to confront the cost pressures of our ageing population.

Contact: Matthew Doman 02 6277 7400 or 0439 467 806

This page was last updated 25 November, 2005