The Aboriginal and Torres Strait Islander Land and Sea Future Fund (ATSILSFF) was established on 1 February 2019 by the Aboriginal and Torres Strait Islander Land and Sea Future Fund Act 2018 (ATSILSFF Act). It will support the making of annual and discretionary additional payments to the Indigenous Land and Sea Corporation (ILSC). The purpose of the ILSC is to assist Aboriginal persons and Torres Strait Islanders to acquire and manage land, water and water-related rights so as to attain economic, environmental, social or cultural benefits.
Legislation
The ATSILSFF Act gives effect to the following:
- Investment Mandate: the responsible Ministers are required to issue at least one investment mandate to the Future Fund Board of Guardians (Future Fund Board).
- Crediting amounts to the ATSILSFF: the responsible Ministers can make credits to the ATSILSFF Special Account.
- Debiting amounts from the ATSILSFF: The ATSILSFF Special Account can be debited for two main purposes: to transfer amounts to the ILSC Funding Special Account so that annual payments can be made to the ILSC, and to transfer amounts to the ILSC Funding Special Account so that discretionary additional payments can be made to the ILSC.
Investment Mandate
The responsible Ministers must give the Future Fund Board at least one written direction about the performance of ATSILSFF investment functions. Before formally issuing an investment mandate direction, the responsible Ministers must invite the Future Fund Board to make a submission on the draft investment mandate. Should there be a submission, it is tabled together with the investment mandate in both Houses of the Parliament.
The responsible Ministers must also invite the Indigenous Affairs Minister to make a submission on the draft investment mandate. Prior to making a submission, the Indigenous Affairs Minister must invite, and then consider any submission received from the ILSC Board.
The Aboriginal and Torres Strait Islander Land and Sea Future Fund Investment Mandate Direction 2019 was issued on 19 February 2019. It requires the Future Fund Board to adopt a benchmark return of the Consumer Price Index + 2.0 to 3.0 per cent per annum, net of investment fees over the long term.
In targeting this benchmark return, the Future Fund Board must determine an acceptable but not excessive level of risk for the fund, including having regard to the plausible capital loss from investment returns over the forward three-year period. The Government acknowledges that targeting the long-term benchmark return implies accepting the risk of capital losses, in adverse markets, that may be 15-20 per cent of the portfolio over a three-year period.
- Aboriginal and Torres Strait Islander Land and Sea Future Fund Investment Mandate Direction 2019
- Explanatory Statement
Investment Performance and Financials
The Future Fund Board publicly discloses investment returns in its quarterly portfolio updates .
Financials since inception to 31 December 2022
| $'millions1 | |
|---|---|
|
Total Credits |
2,008 |
|
(Plus) Net Actual Earnings2 |
266 |
|
(Equals) Total Credits and Earnings |
2,273 |
|
(Less) Debits (Payments)3 |
223 |
|
(Equals) Balance |
2,050 |
1. Data may not sum due to rounding.
2. Earnings are net of investment and administration fees incurred by the Future Fund Board.
3. This amount represents payments made under the Aboriginal and Torres Strait Islander Land and Sea Future Fund Act 2018, to support the making of annual and discretionary additional payments to the Indigenous Land and Sea Corporation (ILSC).
Quarterly performance result to 31 December 2022
| Nominal Return | Benchmark Rate1 | |
|---|---|---|
|
1 Year |
-2.3 |
9.8 |
|
From inception2 |
3.7 |
5.9 |
Notes:
1. The quoted benchmark rate of return follows the relevant investment mandate direction.
2. Inception was 1 October 2019.
Investment performance
| Year | Nominal Returns (Per cent) |
Benchmark Rate1 (Per cent) |
Total Balance of Fund as at 30 June ($ 'millions)2 |
|---|---|---|---|
|
2019-203 |
-1.3 |
0.6 |
1,953 |
|
2020-21 |
13.9 |
5.8 |
2,163 |
| 2021-22 | -0.2 | 8.1 | 2,103 |
Notes:
1. The quoted benchmark rate of return follows the relevant investment mandate direction.
2. Closing balances are sourced from Finance's annual financial statements.
3. Since inception (1 October 2019).
Transfers (Credits) to the Aboriginal and Torres Strait Islander Land and Sea Future Fund
On 1 February 2019, $2,008 million in financial assets was transferred from the former Aboriginal and Torres Strait Islander Land Account to the ATSILSFF.
Annual Payments (Debits) from the Aboriginal and Torres Strait Islander Land and Sea Future Fund
| Financial Year | Debit ($m) |
|---|---|
| 2018-191 | 53.3 |
| 2019-20 | 54.1 |
| 2020-21 | 54.8 |
| 2021-22 | 55.7 |
| 2022-232 | 58.2 |
1. The 2018-19 payment was made by the by Department of the Prime Minister and Cabinet from the Aboriginal and Torres Strait Islander Land Account.
2. As of 31 December 2022.