Taxpayers will contribute an extra $2 billion on the first payment to
the Future Fund early next year under legislation to be introduced into
federal parliament today, after a surprise upgrade of the seed capital
injection to $18 billion, reports The Fin Review.

What is most interesting about the Future Fund at this stage is
how it will deal with the large rump of Telstra shares that the
Government will ultimately pass to it, says Elizabeth Knight in The SMH. The Future Fund’s managers won’t want to hold billions of
dollars of Telstra shares in the long or even medium term. But
there is little doubt that for a while, at least, we will see a
large stake in Telstra turn up under the management of the head of
this new fund, David Murray.

One of the most powerful themes in global capital at the moment
is called “de-equitisation” – the shrinking of equity markets
as companies return capital to shareholders and replace it with
debt. In the 1980s it was called borrowing and brought many to
grief by 1990. Now it is de-equitisation, says Alan Kohler in The Smage. The global shift from equity to debt is caused by the simple
fact that their relative costs have undergone a dramatic reversal.
Bond yields and earnings yields have essentially switched over the
past five years and at the same time corporations have found themselves with their
strongest balance sheets for a decade and well able to justify more
debt. The case to de-equitise has been compelling.

Also in The AFR, the Australian Customs Service has been
thrown a $100 million life line by the federal government to avert
a financial crisis – caused largely by new computer systems – that is
expected to take five years to resolve.

A swag of large companies planning to float before Christmas will
take the initial public offering market to record levels, with $15.3
billion likely to be raised this year, reports The Smage.
Not since the first tranche of Telstra was offered to the market in
1997 have new listings raised so much money. And the ASX is
softening up
the broking industry for a hike in trading fees, possibly to be
announced before the end of the year, reports The Australian. Hot on the heels of the introduction of broker anonymity, which some
broking houses believe has reduced turnover in the market, the ASX is
poised to announce a new fee structure that is expected to result in
lower margins at some firms.

On Wall Street, US stocks closed well off their highs overnight,
after earlier rallying on news of the strongest productivity rise in
two years coupled with contained labour costs. The Dow Jones closed up 21.85 points at 10,856 – MarketWatch has a full report here.