Muswellbrook Shire Council has added another asset to the Future Fund.
The Future Fund was established six years ago in a bid to ensure that some of the benefits of thermal coal mining and thermal coal power generation industries are passed on to future generations by investing in revenues associated with coal mining to generate a permanent dividend.
Last week, Council added a commercial building in Canberra to its Future Fund portfolio. The building, tenanted by one of the country’s premier childcare providers, went under the hammer at auction for $7.8 million.
The net return on the building is approximately 6%.
Now that Council has made that purchase, the cash operating result of the Future Fund will grow to $3.4 million. Council has confirmed that the purchase is made entirely from within the Future Fund and the purchase does not impact Council’s General Fund, programs or services.
Council anticipates that the cash operating surplus of the Fund will grow to $7 million by the 2025/26 financial year.
In the shorter term, Council said the Fund sponsors projects and initiatives to create jobs and improve education and training outcomes in the local community. The Fund has also restored a number of heritage buildings in the Shire including Loxton House, Weidman Cottage and Campbells Corner. It has consolidated carparking in the Muswellbrook Town Centre, improved the quality of the commercial building stock – including accessibility. It has also provided education infrastructure – including buildings for the University of Newcastle, the Town Centre campus of TAFE, a purpose-built space for the Conservatorium of Music and a residential student accommodation facility.
“The Fund Committee is delighted with the addition of this new commercial building to the portfolio. It’s a low risk investment with a long-term National tenant in an essential service industry. The purchase will also help diversify the assets in the Fund,” said Chair of the fund John Flood OAM.
Deputy Mayor Rod Scholes said when the mining starts to drop off the Future Fund will be there to provide funding for the region.
"We're a bit too Muswellbrook -centric. We own a lot of assets in the one marketplace and that's never a good investment policy. SO the whole idea is too with all the investments is that they make a very good return with the money we put into them," he said.
"The whole idea again, is that we'll have income coming into the Shire well into the Future to supplement the mining money that disappears as the coal industry starts to shrink."
"I think its a very strong policy."