{"id":"F2024L01477","name":"Future Fund Investment Mandate Direction 2024","slug":"future-fund-investment-mandate-direction-2024","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":442641,"registerId":"F2024L01477-fast-fetch-1775957604402","compilationNumber":null,"startDate":"2026-04-12","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Future Fund Investment Mandate Direction 2024","content":"---\nmeta-content-style-type: text/css\nmeta-content-type: application/xhtml+xml; charset=utf-8\n---\n\n![Commonwealth coat of arms of Australia](image.001.jpeg)\n\n \n\nFuture Fund Investment Mandate Direction 2024\n\nWe, Jim Chalmers, Treasurer, and Katy Gallagher, Minister for Finance, make the following direction.\n\nDated   19 November 2024\n\n \n\nDr Jim Chalmers   Katy Gallagher\n\nTreasurer   Minister for Finance\n\n \n\n \n\n \n\n \n\nContents\n\nPart 1—Preliminary\n\n1  Name \n\n2  Commencement\n\n3  Authority\n\n4  Schedules\n\n5  Objects of this instrument\n\n6  Definitions\n\nPart 2—Directions\n\n7  Investments in financial assets only\n\n8  Maximise return\n\n9  National priorities\n\n10  Benchmark return\n\n11  Limits on holdings in certain companies\n\n12  Board must consider impacts of investment strategy\n\n13  Corporate governance\n\nSchedule 1—Repeals\n\nFuture Fund Investment Mandate Direction 2017\n\n \n\nPart 1—Preliminary\n\n \n\n1  Name\n\n  This instrument is the Future Fund Investment Mandate Direction 2024.\n\n2  Commencement\n\n (1) Each provision of this instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.\n\n \n\n- Commencement information\n- Column 1 Column 2 Column 3\n- Provisions Commencement Date/Details\n- 1. The whole of this instrument The later of:(a) the 15th day after this instrument is made; and(b) the day after this instrument is registered.\n\n\nNote: This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.\n\n (2) Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.\n\n3  Authority\n\n  This instrument is made under the Future Fund Act 2006.\n\nNote: Section 18 of the Act provides responsible Ministers may give the Board written directions about the performance of its Future Fund investment functions, to be known collectively as the Future Fund Investment Mandate.\n\n4  Schedules\n\n  Each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.\n\n5  Objects of this instrument\n\n  The objects of this instrument are to:\n\n (a) give guidance to the Board in relation to the investment strategy for the Fund; and\n\n (b) set out the Government’s expectations about how the Fund will be invested and managed by the Board; and\n\n (c) set out the Government’s expectations in relation to the policies to be pursued by the Board in relation to matters of risk and return and the allocation of the financial assets of the Fund.\n\n6  Definitions\n\nNote: Expressions have the same meaning in this instrument as in the Future Fund Act 2006 as in force from time to time—see paragraph 13(1)(b) of the Legislation Act 2003.\n\n  In this instrument:\n\nCPI means the All Groups Consumer Price Index as published by the Australian Statistician.\n\neconomic resilience and security infrastructure means infrastructure for sectors of a national economy where having some level of domestic capability is necessary for, or an efficient way to improve, the resilience and security of the economy of the nation.\n\nExample: Economic resilience and security infrastructure includes infrastructure that supports domestic supply chains that are highly concentrated, vulnerable to disruption, or require diversification, to ensure these supply chains continue to operate effectively in the event of an external shock.\n\nenergy transition means:\n\n (a) increasing the overall use of renewable and low emission energy sources; and\n\n (b) increasing the capacity and efficiency of Australia’s energy infrastructure; and\n\n (c) decreasing Australia’s overall reliance on high emission energy sources, including by developing and improving technology to achieve that objective.\n\nNote: The energy transition to net zero carbon emissions by 2050 may require the use of medium emission energy sources to decrease Australia’s overall carbon emissions during the transition period.\n\ninfrastructure includes:\n\n (a) transport infrastructure; and\n\n (b) energy infrastructure; and\n\n (c) communication infrastructure; and\n\n (d) water infrastructure; and\n\n (e) economic resilience and security infrastructure.\n\nnet zero transformation means reducing Australia’s net greenhouse gas emissions to zero by the year 2050.\n\nresidential housing means residential premises (within the meaning of the A New Tax System (Goods and Services Tax) Act 1999.\n\nthe Act means the Future Fund Act 2006.\n\nPart 2—Directions\n\n7  Investments in financial assets only\n\n  Investments by the Fund must be in financial assets only.\n\n8  Maximise return\n\n (1) In performing its Future Fund investment functions, the Board must seek to maximise the return earned on the Fund over the long term, consistent with international best practice for institutional investment.\n\n (2) However, subsection (1) does not apply to the extent that the Board would be required to act in a way that is inconsistent with any of the following:\n\n (a) the Act;\n\n (b) any other provision of this instrument (other than section 9).\n\n9  National priorities\n\n (1) In performing its Future Fund investment functions, the Board is to have regard to each of the following national priorities:\n\n (a) supporting an energy transition as part of the net zero transformation of the Australian economy;\n\n (b) increasing the supply of residential housing in Australia;\n\n (c) delivering improved infrastructure located in Australia.\n\n (2) However, subsection (1) does not apply to the extent that the Board would be required to act in a way that is inconsistent with any of the following:\n\n (a) the Act;\n\n (b) any other provision of this instrument.\n\n10  Benchmark return\n\n (1) In performing its Future Fund investment functions, the Board must seek to achieve an average return of at least the CPI +4 to +5 per cent per annum over the long term as the benchmark rate of return for the Fund.\n\n (2) In targeting the benchmark rate of return for the Fund, the Board must determine an acceptable, but not excessive, level of risk for the Fund measured in terms such as the probability of losses occurring in a particular year.\n\n11  Limits on holdings in certain companies\n\n  The Board must establish a policy which provides a limit on the holdings that the Fund may have in any company to which section 21 or 84C of the Act applies.\n\n12  Board must consider impacts of investment strategy\n\n  In performing its Future Fund investment functions, the Board must act in a way that:\n\n (a) minimises the potential of causing any abnormal change to the volatility or efficient operation of Australia’s financial markets; and\n\n (b) is unlikely to have a negative impact on the Government’s reputation in Australian and international financial markets.\n\n13  Corporate governance\n\n  In performing its Future Fund investment functions, the Board must have regard to international best practice for institutional investment when determining its approach to corporate governance principles, including in relation to its voting policy for investments of the Fund.\n\nSchedule 1—Repeals\n\nFuture Fund Investment Mandate Direction 2017\n\n1  The whole of the instrument\n\nRepeal the instrument.\n","sortOrder":0}],"analysis":{"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"kimi_summary":{"content_quality":"ok","complexity_score":3,"scope_assessment":{"changed":false,"description":"The legislation maintains its original purpose of providing investment mandate directions to the Future Fund Board. The 2024 update introduces new 'national priorities' (energy transition, housing, infrastructure) not present in the 2017 version, but these are explicitly subordinate to the return-maximisation objective. This represents an evolution within the original scope rather than scope creep — the instrument remains focused on investment guidance rather than expanding into new regulatory territory."},"complexity_factors":["Short document (13 substantive sections plus definitions)","Only 6 defined terms, most with plain English explanations","Simple structure: preliminary matters, then numbered directions","Limited cross-referencing (primarily to the Future Fund Act 2006)","Clear hierarchy of obligations: maximising returns is primary, national priorities are secondary and explicitly subordinate","No nested exceptions beyond the standard 'however' clauses in sections 8(2) and 9(2)","Straightforward repeal of previous instrument in Schedule 1"],"plain_english_summary":"This direction from the Treasurer updates how the Future Fund must be invested: the Board must invest only in financial assets, seek to maximise long‑term returns (targeting CPI +4–5% p.a.), and follow global best practice in governance and voting. It also requires consideration of national priorities — the energy transition, housing supply and infrastructure — but those priorities cannot override the Fund’s duty to maximise returns and comply with the Act."},"flash_summary":{"complexity_score":6,"scope_assessment":{"changed":true,"description":"This instrument repeals the Future Fund Investment Mandate Direction 2017 and replaces the mandate in force. The new Direction expressly requires investments be financial assets only, sets an explicit long‑term benchmark (CPI +4–5%), introduces specific national priorities (energy transition, residential housing, Australian infrastructure), requires limits on holdings in certain companies, and adds market‑impact and governance expectations, thereby changing the operational scope the Board must apply."},"complexity_factors":["Interaction with the Future Fund Act: the Direction operates under statutory authority and contains carve-outs where the Act or other parts of the instrument prevail.","Multiple, potentially competing objectives: maximise long‑term return versus having regard to national priorities (energy transition, housing, domestic infrastructure).","Qualitative and discretionary standards: phrases like “have regard to”, “acceptable but not excessive” risk, and “international best practice” require judgment and policy development.","Benchmark setting and risk calibration: CPI +4–5% p.a. over the long term demands governance, modelling and decisions about acceptable downside probability.","Broad, somewhat vague definitions: terms such as “energy transition”, “economic resilience and security infrastructure” and “infrastructure” are expansive and require interpretation when applied.","Operational constraints: prohibition on non‑financial asset investments and a requirement to set limits on holdings in companies covered by sections 21 or 84C of the Act create implementation tasks.","Market‑impact and reputational constraints: duty to minimise abnormal market volatility and avoid reputational harm adds a macro‑prudential consideration to portfolio decisions.","Corporate governance expectations: obligations to follow best practice and determine voting policy introduce stewardship and engagement workload.","Transition risk: the instrument repeals the 2017 mandate, requiring the Board to update policies and procedures to align with new priorities and limits."],"plain_english_summary":"This Direction tells the Future Fund Board how to invest the Fund: invest only in financial assets, seek to maximise long‑term returns consistent with institutional best practice, and target an average benchmark return of CPI +4–5% per annum. It also requires limits on holdings in certain companies and expects international best practice corporate governance.\n\nThe Treasurer and Minister for Finance set the mandate; the Board must balance that return target with national priorities (energy transition, more residential housing, and Australian infrastructure), and avoid actions that unduly disrupt markets or harm government reputation."}},"importantCases":[],"_links":{"self":"/api/acts/future-fund-investment-mandate-direction-2024","history":"/api/acts/future-fund-investment-mandate-direction-2024/history","analysis":"/api/acts/future-fund-investment-mandate-direction-2024/analysis","conflicts":"/api/acts/future-fund-investment-mandate-direction-2024/conflicts","importantCases":"/api/acts/future-fund-investment-mandate-direction-2024/important-cases","documents":"/api/acts/future-fund-investment-mandate-direction-2024/documents"}}