Short answer is “No”. There is a longer answer too.
I have written previously on the future fund.
The Future Fund is a complex beast because it combines two ideas, one good and one bad. Some form of compulsory savings vehicle is, on balance, a good idea.* Not because bureaucrats know better than private individuals how their own money should be spent, but because it reduces the temptation to operate Ponzi schemes – this is the situation where old investors are paid from contributions by new investors. This sort of scheme is common in public finances around the world and will become an ever-increasing burden on future taxpayers.
But the Future Fund is a sovereign wealth fund. On balance this is a bad idea. True, many countries have such things and appear to prosper. Yet they create temptation for governments to engage in wasteful spending. Government has a ‘have money will spend’ approach to public finance. We have seen this in Australia since the early 2000s and more so since 2007.
The Future Fund was established by the Howard government to provide for superannuation for Commonwealth bureaucrats. The Commonwealth, like the states and territories, had been an irresponsible employer. It had provided its employees with super entitlements, but had not funded those entitlements. In other words, it had been running a Ponzi scheme.
By making provision for Commonwealth superannuation liabilities before the burden became too large the then federal government was being responsible. Yet, at the same time, it set up a huge pot of money that could be raided by future governments and to that extent was being irresponsible. Perhaps it should rather have cut taxes. So the Future Fund is a mixed blessing depending on which aspects you want to emphasise.
So turning to Andrew’s question – the money in the Future Fund must be replaced by future taxation if it is used for purposes other than paying out superannuation claims. At the same time debt has to be paid out of future taxation too. So the burden of excessive government spending doesn’t change if the Future Fund is raided. The incentives politicians face, however, will change. Raiding the Future Fund will introduce a new source of fiscal illusion into our public finances and reduce the discipline that politicians face in their spending behaviour. That means more wasteful expenditure.
* I realise this is a very controversial view in our circles. The issue revolves around coercion. Right now I’m being coerced to provide for my own retirement. Something I’d do anyway. But I also know that other people would not. They are being coerced to provide for their retirement. If the government could commit to never coercing me to provide for other people’s retirement in addition to my own then compulsory super would be entirely unjustifiable. But as it stands it will reduce, on balance, the amount of coercion I will experience.