The Future Fund was established in 2006 to strengthen Australia’s long-term financial position in response to the first Intergenerational Report by the Treasury and the government’s very strong fiscal position. Its mandate was to invest budget surpluses and proceeds of asset sales to offset its unfunded superannuation liabilities and to address pressure on future budgets from ageing of the population – then likely to arise from 2041 onwards.

The Future Fund has a clear public accountability framework, which is consistent with international best practice. For example, its long-term objective is consistent with a target return of inflation plus 5% (reduced to 4.5% by the government in 2017).

Attacks on the Future Fund without due regard for all the facts and proper context give rise to populist pleas to use the money for favourite causes — and distract debate from the issues underlying the national fiscal deterioration since the fund’s inception and what sensible policies might be considered.

This paper sets out the positive case for the Future Fund, arguing why Australia is better off having a Future Fund. It then examines and refutes the arguments against the continuation of the Future Fund and address the issue of whether the Future Fund is a sovereign wealth fund after all.