… and managing future spending pressures

Building a pool of financial assets

With net debt eliminated, the Future Fund was established to manage unfunded Government liabilities for superannuation. Proceeds from budget surpluses and from the sale of Telstra shares are expected to bring the Fund's total assets and earnings to around $52 billion by June 2007.

The unfunded superannuation liability is currently estimated at $103 billion and is expected to grow to around $148 billion by 2019-20.

The liability is projected to continue to increase out to 2046‑47 and beyond. The growing component is for Australia's Defence Force personnel.

Future Fund assets secure

Future Fund assets can only be drawn from the Fund to meet superannuation payments and expenses of the Fund. Earnings accumulate in the Fund. Payments can only be made from the Fund from 2020 or once the Fund has accumulated enough to meet the unfunded liabilities.

Intergenerational benefits

The Future Fund is part of the Government's broader strategy to improve the long-term sustainability of its finances to meet the challenges of the future. By making provision for future superannuation payments — currently the largest liability on the Government's balance sheet — the Government will free up resources in the future when other pressures are expected to emerge, particularly with the ageing of the population.