Future Fund Chairman David Murray: ‘The Money Belongs to the Government’
Inaugural Chairman of the Future Fund David Murray makes things perfectly plain in this interview with the Australian. The money in the Fund belongs to the government and it will do with it as it pleases:
the former chief executive of the Commonwealth Bank made it clear he did not see the fund operating at arm’s length from government like the Reserve Bank…
“The money doesn’t belong to the people in the fund, it belongs to the government and the community,” he said. “It has to be managed according to the direction of government…
“The Government has the right to determine what it does on behalf of the taxpayers in the community.”
Mr Murray said he was enthusiastic about accepting the offer to chair the Future Fund, as it was “well suited to my own approach”. “I believe very strongly in the concept of intergenerational equity,” he said.
“I believe in the community being good at saving and investing in the future.”
The Future Fund is based on the premise that the national saving task implied by an aging population should be met by the government setting itself up as an inter-generational financial intermediary, with the result that financial markets are partially nationalised by the Fund. Does anyone seriously believe that a fund subject to direction by government will do a better job ‘saving and investing in the future’ than individuals?
posted on 28 November 2005 by skirchner
in Economics
(1) Comments | Permalink | Main
|
Comments
Australia has a massive savings shortage, which is loading us up with foreign debt that is a long term sovereign risk. The Future Fund at leasts addresses this issue by focusing savings efforts on the dread day when peak earning baby boomers start to spend more income than they earn.
Compulsory superannuation, which entailed a partial “socialization of the investement function”, was a government intergenerational savings and investment plan that did better than individuals left to their own devices. The ABC reports
That is a 20 + fold increase, which is about an order of magnitude greater than the rate of growth in equity prices over the same period. The universalised scheme has also spread this capital gain throughout the community, instead of being hogged by the Big End of Town. There is no serious elite or populr opposition to this scheme.
I-E should have, on the strength of his libertarian ideology, opposed compulsory superannuation. Perhaps he did not but this only goes to show how inadequate libertarianism is when dealing with, what are delicately termed, financial market “imperfections”.
Posted by Jack Strocchi on 11/29 at 11:15 AM