The announced funds are an exercise in dodgy budgeting and do nothing to properly tax Australia’s mining and gas companies.

Imagine if next week you predicted that you would earn 20% less than your actual salary. When you earned your actual salary, would you have just earned a windfall!? No, but that is what the LNP is saying would be the case with their new funds announced today.

Today, the Liberal and National Party announced that they will set up two news funds that will be part of the Future Fund. They are the “Future Generations Fund and the Regional Australia Future Fund”. It all sounds quite nice – who wouldn’t love future generations and regional Australia! Alas, as with the ALP government’s Housing Australia Future Fund (HAFF) the best parts of these funds are their names.

These funds, like the HAFF, use meaningless figures to make them sound big, but are purely set up to put off doing things.

Rather than spend money on vital infrastructure, health care, and education services now, these funds instead put money into an account and will only spend money once the funds earn a return on their investments.

But by the time these funds have made a return, the infrastructure needs will be much greater, and Australians will have gone without vital improvements in health, education and other services.

Even worse, both of these funds proposed by the Coalition are based on smoke and mirrors. They propose to funnel revenue windfalls from commodity receipts into the funds. But it is important to note that these are not funds based on the taxation of windfall profits by mining companies, as is the case with the Norway sovereign wealth fund.

This “windfall” revenue that will go into the new funds is just the difference between what the Treasury predicts the government will collect in tax from mining companies and what is actually collected in tax. In essence, the windfall is just the error in the budget. If Treasury were good at these predictions, then there would be no windfalls.

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