The former Labor Prime Minister Paul Keating has slammed the Government’s new Future Fund, mocking it as a ‘make work’ scheme.

“It is, fundamentally, a make work scheme for a branch of the Treasury and a pretty dumb one at that,” Keating told delegates at the Association of Financial Advisers (AFA) sixtieth annual conference in Sydney this week. Keating said there was only one Future Fund and that was superannuation itself. “The idea that you have $30 billion or you sell Telstra and put the money in a fund and you go and buy Westpac or Qantas or BHP doesn’t make much sense to me,” he said. The money should instead go directly into superannuation, according to Keating, who also argues that the recent tax cuts should have been offered to consumers in the form of superannuation savings. “The Future Fund is an aside budgetary fund to nominally cover the shortfall of government superannuation,” he said. There is also the problem of whether or not the Future Fund’s investment in a particular fund or equity represents a pseudo government endorsement of that investment. “It remains to be seen what attitude the investing public takes to the Future Fund,” he said. He told the conference that he didn’t think the advisory industry had really come into its own but that it was at the ‘end of the beginning’ rather than the ‘beginning of the end’. “I agree that the industry has to move towards a fee for service charged on time rather than a quantum of funds under advice,” he said. Reminding delegates of his 1995 budget pledge to increase superannuation from 9 per cent to 15 per cent he said the Howard Government had missed an opportunity to add an extra $400 to $500 billion to the nation’s retirement savings by rescinding on Labor’s proposal after its election. His original proposal for an additional 6 per cent would have consisted of a 1 per cent contribution from the government matched by a 1 per cent co-contribution by employees, accruing over a three year period.

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