Australia’s Future Fund to invest in green energy, housing, infrastructure

CANBERRA, Nov. 21 (Xinhua) — The Australian government has said it will direct the country’s sovereign wealth fund, the Future Fund, to invest in the green energy transition, housing and infrastructure.
Treasurer Jim Chalmers and Minister for Finance Katy Gallagher on Thursday announced that the government will introduce a new investment mandate and statement of expectations for the independently-managed 230 billion Australian dollars (149.6 billion U.S. dollars) Future Fund.
The changes will require the fund to consider national domestic priorities, including housing supply, the net-zero emissions transition and the delivery of improved infrastructure, when making investment decisions.
The directive will reiterate that the fund’s primary objective is to maximize returns, and it will still be required to earn at 4-5 percentage points above inflation each year on average.
“The fund’s primary focus will remain on maximizing its returns, and at the same time, our changes will help it maximize its role in delivering for Australians in the future,” Chalmers and Gallagher said in a joint statement.
The Future Fund was established in 2006 with a government seeding investment of 60.5 billion Australian dollar (39.3 billion U.S. dollars). It has averaged annual returns of 8.3 percent over the last decade and has grown to 230 billion Australian dollars, approximately 10 percent of Australia’s gross domestic product.
The government also on Thursday committed to not drawing down on the fund’s capital until at least 2032-33, a six-year extension, when it would then be used for its initial purpose of helping to pay the pensions of retired public servants.
Chalmers in January appointed Greg Combet, who served as Australia’s Minister for Climate Change and Energy Efficiency from 2010 to 2013, as the chair of the fund. ■