Fund board didn't back Costello: Murray

16 Mar 2012, 5:27 pm   -   Source: AAP
Mr Costello established the $90 billion sovereign wealth fund towards the end of his 11 years as federal treasurer and he now sits on its board. (AAP)

Mr Costello established the $90 billion sovereign wealth fund towards the end of his 11 years as federal treasurer and he now sits on its board. (AAP)

Outgoing Future Fund chairman David Murray says no recommendation was made about who should replace him.

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Outgoing Future Fund chairman David Murray has confirmed that no recommendation was made by members of its board for his replacement, ending speculation that they had wanted former Liberal treasurer Peter Costello for the job.

In a statement welcoming the appointment of businessman David Gonski as the new chairman, Mr Murray said he had advised the federal government not to release a memorandum about the process of the engagement, as it contained material that was provided in confidence.

"However, in light of recent comments, I think it is important to confirm that the memorandum contained no recommendations," said Mr Murray, who will step down as chairman on April 2.

"It summarised the views of individual members of the board but did not recommend a particular candidate based on these views."

Mr Murray said Mr Gonski is very highly regarded as an experienced chairman with substantial involvement in business, law and investment banking and an extensive background in corporate governance.

The government announced Mr Gonski's appointment this week for a five-year term, even though he was involved in putting together the board's thoughts in the memorandum.

Media reports had suggested that the board had wanted Mr Costello as chairman, sparking accusations from the opposition that the decision to overlook the former Howard government minister was based on politics.

Mr Costello was treasurer when the now $90 billion Future Fund was set up in 2006 to cover public servants' superannuation liabilities, which are expected to mount to $140 billion by 2020.

He now sits on its board.

Opposition assistant treasury spokesman Mathias Cormann said it was never suggested that Mr Gonski had made a written recommendation on who should be appointed as the next chair.

"What we have asked - and what (Finance Minister Penny) Wong has never ever denied - is whether Mr Gonski made a verbal recommendation to the minister, her office or the department that Peter Costello was the most qualified person on the Future Fund board to be appointed as its next chair," Senator Cormann said in a statement.

Speaking before the release of Mr Murray's statement, Opposition Leader Tony Abbott said while Mr Gonski was "well qualified" to chair the board, the government had mishandled his appointment.

"He wasn't the recommended candidate. Peter Costello was. He was rejected because they're obsessed with political management," Mr Abbott told the Nine Network.

On Thursday night, Mr Costello said the government had damaged the fund's reputation with the "shemozzle" surrounding Mr Gonski's appointment.

Mr Costello denied that his comments were sour grapes for missing out on the plum posting.

Treasurer Wayne Swan was not surprised Mr Costello thought he was the best person to head the board.

"He's always had tickets on himself," Mr Swan told reporters in Canberra.

Australian Greens Leader Bob Brown had no problem with that.

"But when you supplant the interests of Australian people with self-interest as Peter Costello has done, that's a worry," he told reporters in Canberra.

In a letter published on Friday in The Australian, former Liberal finance minister Nick Minchin said it would have been "most unwise" to appoint Mr Costello.

"The fund must be, and be seen to be, independent, professional, completely above politics and entirely apolitical," the former senator wrote.

"Appointing a former politician - even one of the stature of Costello - as chairman, would therefore be most unwise, something Costello himself would understand better than anyone."

Mr Costello on Thursday told ABC Television: "The Future Fund was something I conceived. I legislated it and I put every dollar of capital into it.

"No other treasurer, no finance minister, nobody has put a dollar of capital into this fund, except me."

Labor senator Doug Cameron described Mr Costello's appearance as a "petulant, childish performance".

"I just thought any chance this guy ever had of getting a leadership position in business has gone," Senator Cameron told reporters in Canberra.

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