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Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)
The Future Fund continued to grow in the early stages of the 2021/20 financial year to stand just shy of the $200 billion mark.
In a portfolio update, the Future Fund – set up to cover future superannuation liabilities of public servants – stood at $199 billion at the end of the September quarter, delivering a 10-year return of 10.5 per cent.
This compares with a return target of 6.1 per cent.
Peter Costello, the former Liberal treasurer and now chair of the Future Fund he created, said this followed an “exceptional” 22 per cent return in 2020/21.
Investment returns have added more than $138 billion to the $60.5 billion originally contributed by the federal government when the fund was set up in 2006.
“The global economic recovery has continued although the dividend from reopening is beginning to fade,” Mr Costello said in a statement on Monday.
“While supply chain disruptions are a headwind, global economic activity is supported by strong consumer demand and the continuation of supportive fiscal and monetary policy settings.”
Domestically, he said the lockdowns in NSW and Victoria during the September quarter were likely to have detracted from growth, leaving Australia lagging other developed economies in the COVID recovery.
“Globally uncertainties around inflation, the adjustment of fiscal and monetary policy, and geopolitical tensions remain, and despite some weakening in markets during September, asset prices remain elevated,” Mr Costello said.
“Given this environment the board has taken a prudent approach to positioning the portfolio with risk levels at a neutral setting around the middle of the range we would normally expect.”