'I's no longer have it for the Future Fund

Imagine giving someone who thought the Future Fund was his own personal creation the responsibility of chairing it. What the fund really needs is a cultural overhaul.

The future fund was something that I conceived, I legislated it and I put every dollar of capital into it - every dollar. No other treasurer, no finance minister, nobody has put a dollar of capital into this fund except for me.
– Peter Costello, former Treasurer and Future Fund director.

With those words, Peter Costello showed clearly why he would be a disastrous chairman of the Future Fund.

The fact that he chose to go on the 7.30 Report as a director of the fund and bag the government over the appointment of David Gonski as his chairman was bad enough, but that statement rounded out a very poor effort by the former Treasurer. He really should resign from the board.

Maybe he did do everything himself and the rest of cabinet and Treasury had nothing whatsoever to do with the idea or the legislation. But imagine someone who thought and declared that the Future Fund was their own personal creation having the responsibility of chairing its board?

The only real problem with the Future Fund since it started has been that it has been too closely identified with one person – not Peter Costello, but its former chairman, David Murray. Murray is a strong and charismatic personality; he probably didn’t intend to use the fund as a vehicle for his own aggrandisement, but that’s what happened.

Australia’s sovereign wealth fund needs to develop an institutional culture, divorced from any one individual. If anyone takes the lead in public it should be the chief executive officer, Mark Burgess, and on investment matters, perhaps the chief investment officer, David Neal.

As with public companies, the chairman should remain the background, quietly guiding the governance of the organisation and acting as a sounding board for the chief executive officer. It sounds like that’s what new chairman David Gonski intends to do.

Has the process been a schemozzle, as Peter Costello claimed? Only in that David Murray’s term was extended last year, presumably because the government was distracted with the fraught politics of the time and didn’t get around to it. That should not have happened.

Asking Gonski to sound out the board members was a strange thing to do, but it doesn’t disqualify him as chairman in my view. That’s the sort of thing they would ask the chairman about, so it may have simply reflected the government’s loss of faith in Murray.

With a statutory body like the Future Fund, the minister doesn’t have to appoint a chairman from within the board and doesn’t have to consult them.

David Gonski should have simply been appointed chairman a year ago. The fact that the process dragged on is a pity, but hardly a schemozzle.

It’s a more a reflection of how the rabidly polarised state of Australian politics is gradually poisoning most parts of society. Everything is being viewed through tribal politics: fiscal policy, monetary policy, environment policy and now the governance of statutory bodies.

It’s almost enough to make a poor soul want another election.

Follow @AlanKohler on Twitter


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