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What Future for the Future Fund?

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  • Anthony J. Makin

Abstract

This paper questions the rationale for the Future Fund. Contrary to existing policy, it proposes that further budgetary contributions needed to meet the Australian Government’s future superannuation liabilities be sourced from the expenses side of the federal budget on a predetermined basis, rather than until recently from budget surpluses ex post. New general formulae are derived for estimating the magnitude of annual budgetary contributions required to stabilise, as well as fully cover, unfunded liabilities many years ahead. Illustrative estimates are then provided of federal budgetary contributions needed to cover the Australian Government’s unfunded superannuation liabilities. The paper concludes by suggesting that the superannuation‐related activities of the Future Fund be wound up with the transfer of its assets to the trustees of existing government superannuation funds.

Suggested Citation

  • Anthony J. Makin, 2009. "What Future for the Future Fund?," Economic Papers, The Economic Society of Australia, vol. 28(2), pages 121-129, June.
    • Handle: RePEc:bla:econpa:v:28:y:2009:i:2:p:121-129
    DOI: 10.1111/j.1759-3441.2009.00012.x
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    References listed on IDEAS

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    1. Olivier Jean Blanchard, 1990. "Suggestions for a New Set of Fiscal Indicators," OECD Economics Department Working Papers 79, OECD Publishing.
    2. Allen Schick & Hana Polackova Brixi, 2002. "Government at Risk : Contingent Liabilities and Fiscal Risk," World Bank Publications - Books, The World Bank Group, number 15233.
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