It is no accident that there is an unfunded liability for superannuation payments to be made in the future to public servants. The liability was accumulated as the result of deliberate decisions by past governments. Those decisions reflected two beliefs: that while future generations might be inheriting this government debt they also inherited assets paid for by the taxes of previous generations; ignoring future payments made life easier for a Treasurer.
Peter Costello was the Treasurer who decided to break the unfunded tradition and there was some sense to it. He, after all, presided over the sale of the assets that previous governments had notionally counted on as being the other side of the balance sheet. The so-called Future Fund, even though it contains only a small proportion of total asset sales by this Coalition Government, stops a fair dinkum unfunded superannuation liability eventuating or at least minimises it.
While it is now up and accumulating, the whole concept of the Future Fund has never really been explained to the Australian people. What is destined to be a major influence on the investment market would not even have entered the consciousness of most people. Nor would there be any widespread appreciation of future superannuation obligations.
That the Labor Party thinks there is nothing sacred about the concept of the Commonwealth Government having an instrumentality which independently invests billions of dollars was shown yesterday when Opposition Leader Kevin Rudd unveiled his plan to divert some of the proceeds of future sales of Telstra shares away from the Fund and in to an investment in broadband internet infrastructure. Treasurer Costello, however, thinks he can convince voters that Labor’s is an absolutely outrageous proposal.
So at last we have another difference of opinion between the Coalition and Labor which conforms with the historical philosophical foundations of the parties. Labor believes government needs to intervene to ensure what is becoming a new basic utility is provided quickly. The Liberals believe the market will eventually provide what is necessary. (No doubt the Nationals are, as always, caught between their belief in privatising profits and socialising losses so I’ll leave them out of the argument.)
The big advantage Labor has in this argument is the support of the major media barons who all see the internet as their future profit maker. Costello and Prime Minister John Howard have the difficult task of explaining to people how it is that re-investing some Telstra proceeds in infrastructure really does mean that the Labor bear has its paw in the honey pot. Human nature being what it is, the idea of receiving a benefit now will be more appealing than making things better for someone else in many years’ time.