The June 30 update from the Future Fund is not due until early next month (does Tony Abbott realise we have one?), but its view on the value of its remaining Telstra holding will tell us a lot about the intellectual fortitude of the fund and its guardians, especially if the Liberal-National Party win government and stiff Telstra of the $11 billion that the NBN was going to pay the telco for the increasingly less-profitable copper wire business.

The fund’s chairman David Murray was very vocal and critical about the NBN offer in the early negotiations. In fact he was verging on being a rent a quote on the issue. But he went to ground (or went to water) when the deal was done with the government on a heads of agreement.

He and the Future Fund should have been pressing Telstra to do the deal at all costs and been on top of the falling revenue and profits from the copper wire business. The fund should have acknowledged the considerable financial advantage to the telco (and the fund with a 10.9% stake) of the $11 billion payment. Telstra’s results for 2010 last week confirmed that revenue and profits are leaking daily from this declining business.

The fund last year sold a swag of Telstra shares just before the NBN proposal emerged from the government. It currently has 10.9% of the telco left.

Telstra’s share price has risen from $2.99 at the end of March (its last update) to $3.25 at the end of June and the 2010 financial year. That will have produced a rise in the value of the remaining shares.

But since June 30, the shares have tanked, last week actually. The shares finished at $3.25 last Wednesday and plunged the next day after the company forecast a fall in 2011 earnings and plans to spend heavily to reinvent itself, again.

On Friday the shares closed at $2.92. The loss from the end of March to last Friday is about 10%. In light of what has happened since June 30, will the fund have to make a note in its accounts as to the difference in value?

The Future Fund will issue its report after the election. The poll result will have a bearing on the sustainability of the 28 cents a share dividend (which is the fund’s single largest bit of recurrent income at about $360 million a year). The result will also have an impact on the share price. If the government wins, the NBN money comes in and the 28 cents a share will probably be sustainable for another year.

If the Opposition wins, the NBN money is off, but Telstra will be allowed to continue to compete in its current form, but will face falling income and profits from the copper wire business, putting pressure on the dividend.

The big question for the Future Fund board and management is whether it looks at an impairment charge on the Telstra value in the event of the Opposition win and the loss of $11 billion and the doubt about the dividend.

Murray was a favourite of John Howard and Peter Costello in his time at the Commonwealth Bank. If Abbott wins, Murray and the fund will be under the sort of pressure that forces a decision that one way or another and gives a new Abbott government an enormous headache that won’t go away.