In a November joint statement, Treasurer Jim Chalmers and Finance Minister Katy Gallagher announced that the Future Fund, which is one-third the size of the Australian economy, will be directed to invest in housing, security, and the green energy transition “where possible, appropriate, and consistent with strong returns”.
This marked the first time the federal government had mandated certain asset classes for the Future Fund, which was formed in 2006 by then-Liberal Treasurer Peter Costello to support federal employee pensions.
The move reflected Chalmers’ belief in “values-based capitalism”, which directs public and private wealth towards social concerns. It also aligns with the Future Fund’s new chair, former Labor Minister Greg Combet, who wishes to invest more in renewable energy.
Documents published under freedom of information disclosed negotiations between the federal government and the Future Fund over proposed modifications to its investing mandate.
According to Department of Finance records, the Treasury requested that the Future Fund explore investing in ‘national priorities’ such as housing, renewable energy, and infrastructure.
The government also intended the Future Fund to consider these principles when voting at shareholder meetings for companies in which it had a stake.
However, the Future Fund was averse to investing in some projects that have received subsidies through Labor’s flagship Future Made in Australia program.
In November 2024, the Albanese government also passed legislation that defined the objective of super as “to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way”.
Paul Schroder, the boss of the nation’s largest fund, AustralianSuper, described the government’s intervention into superannuation investments as an “utter disaster” and said there was “nothing worse” than Treasurer Jim Chalmers’ “imposition”.
“There is nothing worse than the prospect of government intervening in investment decision-making. Nothing worse”, Schroder told Sky News’ Business Weekend.
“In the Australian system, individual members carry the investment risk. You can’t then impose decisions about investments on them”,
Schroder said super funds “must” act in their members’ “best financial interest” to ensure the highest returns on their investments.
“It would be a disaster if a government of any persuasion, of any political colour, became involved in investment decision-making. An utter disaster”, he said.
The Future Fund and superannuation fund managers should only invest in projects with strong financial returns. They should not be used to satisfy political agendas or social justice concerns.
With superannuation, the money belongs to Australian members, not the government. Maximising financial returns for a dignified retirement should be the only mandate.
It is bad enough for the government to waste taxpayer money on boondoggle projects. Directing Australia’s superannuation savings into doing so with minimal transparency and accountability is even worse.
Hands off Australia’s superannuation.
