This article is from the Australian Property Journal archive
THE Albanese government has given the nation’s $230 billion sovereign wealth fund a new mandate to boost housing supply, deliver better infrastructure and support the transition to net zero.
Releasing the first statement of expectations for the Future Fund in 15 years, the government said it won’t start any drawdowns from the Fund until at least 2032–33, by when it is expected to have grown to $380 billion.
The announcement comes a few months into national cabinet’s National Housing Accord initiative, which aims to deliver 1.2 million “well-located” homes across the country over five years, and the Housing Australia Future Fund and the National Housing Accord Facility, which together aim to create 20,000 social homes and 20,000 affordable homes.
The announcement marks an escalation of the government’s focus on housing amid a national housing crisis, which has seen affordability stretched to its worst levels on record, crushing vacancy rates and high rents.
The new investment mandate will “require the fund to consider Australia’s national priorities in its investment decisions, where possible, appropriate and consistent with strong returns”.
The government said the priorities are increasing the supply of residential housing in Australia, supporting the energy transition as part of the net zero transformation of the Australian economy, and delivering improved infrastructure located in Australia including economic resilience and security infrastructure.
“The Australian economy faces major structural shifts including from the global net zero transformation, technological and demographic change, and global fragmentation,” Treasurer Jim Chalmers said.
“The fund’s primary focus will remain on maximising its returns, and at the same time, our changes will help it maximise its role in delivering for Australians in the future.”
The benchmark return rate will remain at between 4% and 5% above CPI per annum over the long-term, and there will be no change to the expected risk profile.
“The government is also confirming the Fund’s enduring role in strengthening the Commonwealth’s long‑term financial position and covering unfunded superannuation liabilities.
“The fund will provide the same strong returns to the government’s balance sheet while supporting national priorities where it can, and complementing the significant investments made by our specialist investment vehicles including the Clean Energy Finance Corporation, the National Reconstruction Fund, and Housing Australia.”
