The announcement by the treasurer, Jim Chalmers, that Australia’s Future Fund would be directed to invest in areas of national priority, rather than pursuing a purely commercial investment strategy, has drawn a strong reaction from Peter Costello and John Howard who established the fund in 2006. The ferocity of this reaction is a reminder of how much the world has changed since that time.
The fund was established at the high point of neoliberalism, initially using the proceeds of the privatisation of Telstra. The worship of financial markets, and the disdain for public ownership of any kind was at its peak. The guiding principle was the “efficient markets hypothesis” which, in its strongest form, states that the asset prices prevailing in financial markets are the best guide to the returns available to any investment, public or private.
