Future Drought Fund Investment Mandate Direction 2019 (Cth)

Future Drought Fund Investment Mandate Direction 2019

We, JOSH FRYDENBERG, Treasurer, and MATHIAS HUBERT PAUL CORMANN, Minister for Finance, give this Direction under section 41(1) of the Future Drought Fund Act 2019.

Dated 15th November 2019

JOSH FRYDENBERG MATHIAS HUBERT PAUL CORMANN Treasurer Minister for Finance

Contents Part 1 Preliminary 1 Name 2 Commencement 3 Authority 4 Definitions Part 2 Direction 5 Object 6 Benchmark return and acceptable level of risk 7 Board must consider impacts from its investment strategy 8 Corporate governance 9 Reporting

Part 1 Preliminary

1 Name This Direction is the Future Drought Fund Investment Mandate Direction 2019.

2 Commencement This Direction commences on the 15th day after it is given to the Board. Note 1: Section 42 (disallowance) of the Legislation Act 2003 does not apply to the direction—see regulations made for the purposes of paragraph 44(2)(b) of that Act. Note 2: Part 4 of Chapter 3 (sunsetting) of the Legislation Act 2003 does not apply to the direction—see regulations made for the purposes of paragraph 54(2)(b) of that Act.

3 Authority This Direction is made under the Future Drought Fund Act 2019.

4 Definitions In this Direction: Act means the Future Drought Fund Act 2019. Board means the Future Fund Board of Guardians established by section 34 of the Future Fund Act 2006. Consumer Price Index means the All Groups Consumer Price Index number, being the weighted average of the 8 capital cities, published by the Australian Bureau of Statistics. Fund means the Future Drought Fund established by the Act. Future Fund Act means the Future Fund Act 2006. Responsible Ministers has the same meaning as in the Act.

Part 2 Direction

5 Object (1) The object of this Direction is to give guidance to the Board in relation to its investment strategy for the Fund. (2) The Board must seek to maximise the return earned on the Fund over the long term, consistent with international best practice for institutional investment, pursuant to section 42 of the Act, and subject to its obligations under the Act and any directions given by the Responsible Ministers under subsection 41(1) of the Act. (3) This Direction is given under subsection 41(1) of the Act to articulate the Government's expectations for how the Fund will be invested and managed by the Board. This sets out matters of risk and return for the Fund.