The Future Fund - Part 2

I previously posted about Federal Labor's plans to use part of the "Future Fund" to improve telecommunications infrastructure, and provide faster Broadband to more Australian's.

I may not have been clear in my post about what the Future Fund has been set up for. It has been established to pay Public Service Pensions from 2020. You see, in the past, if you worked for a Government organisation, part of the deal was a promise of a lifetime index pension once you reach age 55, or 60. However, back when these deals were promised, average life expectancy was around 65. Today, life expectancy is around 80, and only likely to increase with advances in health care technology. Therefore, funds for these lifetime pensions must come from somewhere.

That's why the Future Fund was established. Now, critics of Kevin Rudd's announcement will say that the downside of dipping into the future fund is increased taxes in the future to pay for the public servant's pensions, however, Rudd's proposal will have the new infrastructure project pay for itself, and possibly even pay an income stream to the Future Fund.

Using Government assets to offset taxes? Makes sense to me, not the Libs though.

I'll give Rudd a chance with this one. Like I've said, recent policy changes have all been about buying the Boomer's vote. It's refreshing to have someone out there trying to buy my vote. At the end of the day a politician will always be a politician though. Peter Boyle talks about the ripoffs that these "Public Private Partnerships" that Rudd is proposing can often become. Time will tell.