NSW invests $3b in ‘world-first’ future fund
The NSW government has invested $3 billion for future generations with at least half of any interest earned to be returned to community programs
In a world-first initiative, the NSW government will set aside billions of dollars for the state’s next generations that will also pay for community projects chosen by locals.
The NSW Generations Fund, announced in Tuesday’s budget, will start with an initial $3 billion investment and be topped up progressively. At least half of any interest invested in the fund will be returned to community projects.
Treasurer Dominic Perrottet said the sovereign fund is the first of its kind in the world and will be used to pay down debts as well as provide a budget for infrastructure.
“We owe it to our children to prepare for the challenges they will face in the decades to come, not saddle them with debt,” Perrottet said.
NSW residents over the age of 16 will be able to nominate and then vote online for projects worth $20,000 to $200,000. This will be distributed evenly across electorates.
The government will kick-start the ‘My Community Dividend’ with nearly $30 million in 2018/19, to be overseen by an advisory board with an external chairman.
While the fund was broadly welcomed among political parties, Labor levelled the move to have projects decided by voters was “farcical.”
Shadow Treasurer, Ryan Park, told reporters, “Governments are meant to be the custodians of the public finances. End the gimmicks. This suggestion should be laughed out of court.”
The government plans to invest its remaining interest in WestConnex in the fund once it sells off 51 per cent of the company. Proceeds from this sale are being earmarked for the final two stages of the NSW Generations Fund project.
“Governments don’t always have the best solutions, particularly on smaller projects that make a difference to people’s lives,” Perrottet said.
The fund will be managed by NSW Treasury Corporation.
The state posted a $3.9 billion surplus in 2017/2018 but that is forecasted to fall to $1.4 billion next financial year.