Treasurer Jim Chalmers insists Future Fund changes needed to ‘modernise’ $230 billion sovereign wealth fund

Treasurer Jim Chalmers has hit back at accusations that a planned overhaul of the $230 billion Future Fund to prioritise housing, renewable energy projects and cybersecurity infrastructure will compromise the body’s independence or force it to underwrite pet government projects.

The Federal Government announced the most consequential role change in the 18-year history of the sovereign wealth fund on Thursday, to direct it to invest in housing and the green energy transition where profitable.

The move prompted immediate accusations from the Opposition that the Albanese government was co-opting the nation’s nest egg to boost its own agenda.

Dr Chalmers immediately rebutted the suggestion, arguing there was “nothing controversial” about the proposal.

“It will mean more investment where we need it most, but without compromising the returns, which will continue to be the primary focus of the Future Fund,” he said.

“I also want to be really clear that the government remains committed to the Future Fund, its independence and to its commercial focus,” Dr Chalmers added.

The government also intends to give medium-term certainty to the fund - created in 2006 by then-treasurer Peter Costello to cover superannuation payments to public servants - by promising not to draw down on its holdings for at least eight years, until 2032-33.

“There are no changes being proposed here to the existing benchmark rate of return or the risk profile. The government will not be directing specific investments being made by the fund,” said Dr Chalmers.

“The fund and its board will continue to make its decisions about investments independently. Its primary objective will be to continue to maximise returns,” he said.

“This is about ensuring that the fund will continue to provide strong returns to the government’s balance sheet, while also supporting some of those big national priorities.”

However, shadow treasurer Angus Taylor said Dr Chalmers was attempting to raid the nation’s nest egg to fund “pet projects”, as he promised the Opposition would overturn the investment mandate if elected next year.

“The Future Fund is Australians’ money, not the Treasurer’s money, not the Prime Minister’s money, it is Australian’s money,” Mr Taylor said.

“It’s not there to invest in their pet projects, to invest in whatever they think is necessary to deal with their economic failures.”