The Howard government’s “future fund” is back in the news this morning, with a radical suggestion (reported in The Australian)
from Peter Saunders at the Centre for Independent Studies: why not let
the people invest the money, rather than the government?

Crikey has been saying for some time that, while moving to fund the
Commonwealth’s superannuation liabilities is praiseworthy, doing it by
a dedicated fund is unnecessary. The money should just be given to
employees to invest in a fund of their own choice, in the same way that
superannuation operates in the private sector.

Saunders’s point is a more general one; he sees individual “future
funds” covering not just superannuation but other expenditures as well:

In this way, the Government could enable ordinary people to start
saving for their own futures, rather than have the Government doing it
for them … Personal Future Funds could be used as substitutes for
government unemployment benefits or they could help reduce the level of
demand on government health services.

Saunders says that “if the fund was scrapped in mid-2007, when it hit $60 billion, every Australian would receive $3,000.”

Watch carefully for how the government, and particularly embattled
treasurer Peter Costello, justifies its rejection of this idea. It will
just add to the suspicion that it sees the future fund as not an
arm’s-length operation but an opportunity to play God on the
sharemarket. There is already some evidence for that, for example in
the treasurer’s comments that he expects the fund to invest mostly in Australian shares.

A government that was serious in its rhetoric about personal
responsibility would jump at Saunders’s suggestion. I wonder if Wayne
Swan is paying attention?

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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