Event:  Andrew McKellar doorstop at Parliament House on changes to the Future Fund

Date: Thursday 21 November 2024

Topics: Changing the investment mandate on the Future Fund

E&OE

Andrew McKellar:

Now look, just a few brief comments. Obviously from a business point of view, we are concerned to hear the announcement that the Treasurer has made today in relation to changes that are proposed to the mandate for the Future Fund. We are concerned that that does affect the potential returns and performance of the fund. We think it is tinkering. We think that it runs the risk that the Future Fund is increasingly exposed to politicisation and political interference. That’s not a good thing. We think it should be focused very much around its original mandate. It should have a pretty much free reign to pursue investments which are going to maximise the return in the long term and the benefit for the Australian taxpayer. So we really think this is not an appropriate step and one that would’ve real concerns. Happy to take questions.

Journalist:

The Treasurer says that If given a choice between two identical investment opportunities with the same risk profile and the same rate of return we should lean towards these three priorities. Do you believe that or do you see any problems in that?

Andrew McKellar:

Well, we do see a problem with it. We see this has been as tinkering. It really is compromising the independence, the clear mandate that the fund has now and has had pretty much since it was first set up. It’s there for a defined purpose. It needs to maximise its position in terms of the Commonwealth balance sheet moving forward. If they start getting these sorts of, I think, confusing directions that are coming from government, and this is the first time this has occurred, really, I think it’s disappointing that the government hasn’t been able to resist the temptation to interfere in this sort of way.

Journalist:

The government has said though, that we should only be encouraged to invest in these sort of priorities if profitable. If those things are profitable, then what’s the harm in having that direction?

Andrew McKellar:

Well, I think it creates uncertainty and I think here this is previously unknown territory. So we now have the government starting to step in and mandate that particular sectors or particular types of investments should be favoured over ones which the guardians of the fund would otherwise choose to do. So I think that is a politicisation of the fund. We don’t think that’s a step in the right direction. Don’t think that’s good governance and the risk is in the long term, tax payers will be worse off as a result.

Journalist:

The fund has always had some restrictions, particularly in contravention of any international treaties. And Nicola Roxon pushed to ban them from tobacco. So that has been tinkering even from its original creation. There were areas of, so what’s the difference between that and then saying, well, if you’ve got the same sort of investment profile, same return profile, what’s the difference?

Andrew McKellar:

Look, I think the areas that have been mentioned there, I think those have been widely discussed, established. I think there’s a degree of consensus over those things. We are entering new territory now. And the other thing I think, which is very pertinent here is the Future Fund itself administers a number of other separate targeted funds including the Housing Australia Future Fund. So I think this is really doubling up. It’s I think, redundant from that point of view. If you want to pursue particular policy outcomes, whether it be in housing, whether it be in the net zero transition, whether it be in relation to infrastructure, then establish a dedicated fund for that purpose, like the Housing Australia Future Fund, resource that and direct investment accordingly, then there can be no doubt about what the purpose of the fund is. In this case, there is a longstanding precedent. It’s largely been free of political interference. That should be the best going forward. Thanks.