[ad_1]
Complete the budget
However, the fact that the fund has sufficient fiscal space also raises the question of whether the government-owned investment institution hides the financial results of politicians in Canberra.
The fund's earnings will not be counted in the Morrison government's return to surplus, which is expected to reach $ 7.1 billion in 2019-2020.
But beyond that, the little-noticed accounting change of the former Labor government and adopted by the Coalition is expected to increase the net budget results by more than $ 5 billion a year.
Peter Costello, president of the Future Fund, said the fund makes a positive contribution to the government's finances. Eamon Gallagher
Since the inception of the fund under Peter Costello, former Liberal Federal Treasurer and now President of the Future Fund, the revenues generated by the investment vehicle have not been included in the underlying cash balance of the fund. budget.
Mr. Costello created the fund as treasurer in 2006 to pay the unfunded pension liabilities of public servants.
Commenting on the release of the fund's results for the March quarter, Costello said: "The Future Fund continues to make good progress in strengthening the long-term financial position of the government.
"The recent budget documents show the contribution its revenues will make to the net result of the budget as of July 1, 2020.
"Its badets also reduce the government's net debt and add to its net financial value."
In addition to chairing the Fund for the Future, Mr. Costello is President of Nine, owner of The Australian Financial Review.
The future Fund will become a determining factor in the cash flow and budget balance sheet.
For example, in 2020-2021, the fund's expected earnings will reach $ 5.2 billion, nearly half of the underlying $ 11 billion expected cash surplus.
Over the three years up to 2022-2023, the fund is expected to generate 45% of the combined surplus of $ 38 billion.
More tax issues raised
In addition, a report by the Parliamentary Comptroller of the Budget indicates that the federal government's net debt could exceed $ 70 billion if the Fund's investments for the future were accounted for differently in the Commonwealth budget.
Almost half of the $ 154 billion invested by the Future Fund is through collective investment vehicles, such as equity-like badets, private equity funds and infrastructure, and is currently deducted from debt gross government.
However, if the sovereign fund held the same equity investments directly, the budget accounting rules would not reduce the government's declared net debt to $ 373 billion, the Parliament's Budget Office said.
The monitoring report released last month called into question the merits of the old net debt frameworks adopted under coalition and union governments and suggested that a review is warranted and greater transparency in the budget for report on the holdings of government investment funds.
"The net debt is now very sensitive to the investment strategy adopted by the Fund for the future, given the considerable value of badets under management," said the director of finance.
"Although the Future Fund is managed independently of the government under a legislated investment mandate, the selection of badets purchased by the Fund for the future may have a material impact. on net debt.
"Greater transparency regarding the treatment of these investment fund badets would help the public understand, given their size and their increasing impact."
Source link
