Australia to copy NZ Super Fund idea
The Australian government is following New Zealand’s lead, and is planning to establish a multi-billion fund to help the state meet its future pension costs.
Wednesday, September 22nd 2004, 6:56AM
The Future Fund will invest budget surpluses to finance future public sector superannuation liabilities.
“The announcement to establish a Future Fund brings Australia into line with intergenerational fund initiatives being pursued in several other economies, including New Zealand, Ireland and Norway,” Macquarie analyst Richard Gibb says.
An announcement about the fund was made by Treasurer Peter Costello when the government unveiled a better-than-expected Federal budget position.
Australia currently has unfunded superannuation liabilities of A$88.09 billion at June 30 and that is expected to rise by 3% on average each year and will stand at around A$99.34 billion by 2008.
An interesting difference between Australia and New Zealand is that the Future Fund appears to have bi-partisan support with opposition Treasury spokesman Simon Crean welcoming the announcement.
Details of the fund, such as how it will be funded, invested and managed have yet to be decided.
One similarity with New Zealand already, is that the fund should partially be used to fund infrastructure projects in Australia.
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