Govt to invest surplus in retirement fund

The Federal Government is to create a ‘Future Fund’ to channel surplus revenue into and assist it in meeting its ongoing superannuation liabilities.

The Government announced the move today after revealing that it was sitting on budget cash surplus of $8 billion.

“The Government will establish a dedicated financial asset fund - a Future Fund - to increase national savings, offset unfunded superannuation liabilities, and maximise the Government’s net worth,” the Government says in a statement.

Federal Treasurer Peter Costello says with the Government’s level of debt now so low it can concentrate on investing excessive revenue to fund its superannuation liabilities.

“Our aim with the Future Fund is to be in a position to fund superannuation liabilities by 2020,” Costello says.

The Government’s unfunded superannuation liability stands at $88 billion as at June 30 2004 and is the largest liability.

“We know from the Intergenerational Report that future Australians face a gap between expense pressures and revenue which will emerge over the next forty years. If we build a Future Fund now it can be used to pay the superannuation costs currently being incurred but not payable for some time,” Costello says.

The Government says the fund “will reduce the call on the Budget in future years and free up recurrent revenue for the important health pressures and ageing pressures that we know are emerging”.