SFE Responds To Commonwealth Government Future Fund Announcement

Below please find a statement from SFE Managing Director and CEO, Robert Elstone, regarding last night’s announcement by the Federal Treasurer, Hon Peter Costello, of the creation of the Future Fund.

“The Commonwealth Government, and the Treasurer in particular, are to be commended for the Future Fund policy initiative. It demonstrates policy consistency with maintenance of a viable market for Commonwealth Government Securities, which is a critical piece of the financial system’s infrastructure.

It also demonstrates policy adoption of best practice transparency as it relates to the Commonwealth’s off balance sheet indebtedness, having enshrined the virtues of transparency in corporate regulation enacted by the Commonwealth in recent years.

But most importantly, it represents good public policy when regard is had to the funding challenges embedded in the Intergenerational Report attributable to an ageing population and the desirability of Commonwealth leadership in the criticality of developing a strong national savings psyche.

Beyond its near term objective(s), the policy initiative in my view is likely to rank, in years to come, as of equivalent significance to floating the dollar and mandating the independence of the Reserve Bank of Australia. Economic historians will view it as a case study in policy vision.”