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.

Future Fund to actually provide for the future

Kevin Rudd yesterday announced the plan to use $4.7 billion from the "Future Fund" to bring our Broadband network into line with the rest of the developed world if the Labor Party wins the next Federal election.

The irony of this is that the Future Fund is funded mostly from the proceeds of the sale of Telstra. Arguably, our broadband network is in such bad shape due to the botched privatisation of Telstra. A case of robbing Peter to pay Paul, of in the case of the Federal Government's plans, robbing the public to pay a few lucky public servants their lifetime pensions.

You see, The Government has conned the public into believing that the "Future Fund" is in fact investing for our future. By simply reading the name, one could be forgiven for thinking that this is the case. However, the Future Fund has been established purely to pay the defined benefit pensions that old time Public Servants are entitled to receive. Great if you are in the minority,who will benefit from lifetime guaranteed income, bad if you're the rest of us who have to save for our retirements ourselves (with the help of our employers since SCG was introduced).

I think this is a great move. Finally, the X & Y Generation will see some benefit from all of these policy changes. Benefit that will help us through our lifetimes. This also is a small step towards rectifying the huge stuff up that has been the privatisation of Telstra without first separating the retail and infrastructure arms.

Bring on faster internet… downloading of movies, games and music quicker for me. Productivity gains? Maybe not!