Be afraid. Be very afraid. The Federal Government’s new Future Fund
will take a vigilant and active role in the companies it invests in, a
curious little item in the Business pages of Saturday’s Sydney Morning Herald said.

This is known in the trade as “picking winners.” Notable winners
produced in the past by the policy have been the lawyers and forensic
accountants called in to clean up the mess of Tricontinental, WA Inc
and the State Bank of South Australia.

This might be an unduly pessimistic approach to take. But if the Future
Fund succeeds, we’ll have to watch what happens with the money because
of the potential for political pork.

Centre for Independent Studies social research director Peter Saunders suggested in a feature in The Australian last week that we all have future funds of our own – that its billions be returned to taxpayers. He wrote:

The Government says it needs a Future Fund to pay for
public servants’ superannuation in 15 years’ time, yet these
superannuation liabilities are forecast to fall from 0.6% of
gross domestic product in 2001-02 to 0.3% in 2021-22.

Much more pressing is the escalation in the cost of age pensions and
public health care as the population ages, but the Future Fund will do
nothing to ameliorate this. The best way to protect future generations
from this burden would be to encourage people to accept more
responsibility for their own health and retirement needs, but
government tax policies are achieving precisely the reverse effect.

Yet the Future Fund boss, former Commonwealth Bank CEO David Murray has told our friends at the online investment newsletter The Eureka Report that the man in Whitehall knows best.

“I think [the Future Fund] has to exercise its rights as an investor
independent of the Government,” he says. “Our financial engineers in
the market can create pooled funds, all sorts of financial instruments
for investment, so I don’t think there’s any limitation because of the
fantastic creativity and skill in the financial system.” Brave words.

And the Future Fund will employ 25 people, we’re told. That’s a good
start. Create a new bureaucracy to manage the problems of, er, the
bureaucracy.