The limited details released about the Future Fund make bigger tax cuts and real tax reform look far preferable – it’s bad policy but good politics.

Superficially, it sounds appealing: a government initiative to invest in “the future”, kickstarted with $16 billion of accumulated surpluses and receiving all Future Fund earnings, future budget surpluses and apparently the receipts for the sale of Telstra. (Ha, but try to keep National Party hands off all that loot!) The stated intention is to build up a pool of over $100 billion (maybe much more if investment markets are kind) by 2020 to fund the government’s liabilities to pay retiring public servants their superannuation entitlements that are currently paid out of tax receipts as they fall due.

Of course, if investment returns are miserable, the Budget not in surplus in future or asset sales do not proceed, the fund’s accumulations will be much less and taxpayers’ pockets will still have to be raided. The Budget set out surprisingly limited information for the fund, little more than the back-of-the-envelope sketch made available in last year’s election campaign. What has the government been doing? Clearly not thinking much about the future.

Read more on the Henry Thornton website here.