The Future Fund was established in 2006 to strengthen the Australian Government’s long-term financial position.
From 1 July 2017 the Fund’s Investment Mandate is to achieve an average annual return of at least the Consumer Price Index plus 4% to 5% per annum over the long term, with an acceptable but not excessive level of risk.
Prior to this the Fund’s objective was Consumer Price Index plus 4.5% to 5.5% per annum. The reduction in the Mandate reflects changed long-term global investment market conditions and outlook.
The Fund has received contributions from a combination of budget surpluses, proceeds from the sale of the government's holding of Telstra and the transfer of remaining Telstra shares.
In accordance with the Future Fund Act 2006, from 2020 funds can be withdrawn from it to cover the annual unfunded Commonwealth superannuation liabilities.
However, in 2017 the Government announced it would not make withdrawals from the Fund in 2020 and indicated its inclination to allow the Fund to grow until at least 2026-27. Drawing down later on the Fund is projected to strengthen the Government’s financial position over the long term.
The Commonwealth’s unfunded liabilities are currently being paid out of consolidated revenue. By helping to meet these liabilities, the Future Fund will ease pressure on the Government’s budget at a time when an ageing population is likely to place significant pressure on its finances.
Further information regarding the Future Fund is also available on the Department of Finance website.