The Future Fund says it’s ready for a world of higher inflation as it reported a modestly negative return over the financial year.
between returns generated by pension funds and sovereign funds can be fraught given tax considerations, liquidity requirements and mandates.Advertisement
“We do have to think about mechanisms to make sure that the central bank is held to account if it’s got a target for 2 to 3 per cent inflation. It should be held to account and if it doesn’t deliver. There should be some consequences.“The guidance was wrong. That was the point. It’s okay to give guidance if it actually guides you but if it takes you down the wrong path, you’re in trouble.
“If we had gone with the March private [market] numbers - publicly traded numbers - we would have presented a plus 2.4 per cent [financial year return] So that’s a three and a half percent delta [difference] or $7 billion.”“We think that lending in Australia on a floating rate is attractive in the world that we’ve been talking about. We don’t have to worry about currency effects and Australian interest rates will track Australian inflation to some extent.
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