Date posted: 30/03/2022

Federal Budget 2022-23: When will the Future Fund be raided?

Government forward estimates yet to see withdrawals from Future Fund to pay for public sector superannuation liabilities

In brief

  • Unfunded public sector superannuation liabilities are increasing

Based on the 2022-23 budget documents, unfunded Commonwealth superannuation liabilities are as follows:

Financial Year   $billion 
 2021/22   251.2
 2022/23   257.8
 2023/24   264.3
 2024/25  276.1
 2025/26   284.1

It is worth pointing out that these liabilities are increasing at a lower rate than the government assumes wages will increase over the forward estimates.

What is the Future Fund worth?  At the end of 2021 it was worth $203.5 billion.

From next year we may begin to see the government withdrawing money from the Future Fund to pay for unfunded public sector superannuation liabilities.

At this point, we have been unable to find a specific dollar figure that the government pays each year in unfunded liabilities as actual benefit payments – that is, as lump sums or pensions.

In 2017, the government announced that it would delay withdrawals from the Future Fund until at least the 2026-27 financial year.  That is, just beyond the 2022-23 Budget forward estimates.

It may be that from next year we may begin to see the government withdrawing money from the Future Fund to pay for unfunded public sector superannuation liabilities.

It is an argument for another day, but if interest rates rise considerably and the cost of government borrowings increase similarly then a future government could decide to raid the Future Fund to reduce those borrowings.

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