Former treasurer Peter Costello warns some businesses will not survive the shutdown

Former treasurer Peter Costello has warned some businesses will not emerge from the other side of the Covid-19 shutdown.

Costello is now chairman of sovereign wealth fund Future Fund, which has seen $6 billion wiped off its balance sheet in March by the pandemic driven downturn.

The $162 billon fund has booked a negative return for the year to date following a massive slide in equity markets due to the coronavirus crisis.

“Obviously Australia has done well in containing Covid-19 and there’s a glimmer of hope with some states starting to lift restrictions,” Costello said.

“Every day counts but the medical situation is the priority, but the sooner Australia can get back to work the better it’s going to be.”

Costello said the damage inflicted on both the local and global economies would result in some businesses going under.

“There are some businesses that will not re-emerge on the upside of this downturn,” he said. “Some will emerge stronger. Some will not emerge at all.”

Costello also said he was in favour of letting people access their superannuation early if they needed to.

“If you’re out of work and you have no money, I think it’s a fair thing to be able to draw down on your superannuation,” he said. “It’s no consolation to say, ‘Keep the money there, you’ll have more in 40 years time’. You might not make it to retirement if you can’t get yourself through this enormous dislocation.

“Always remember that the money in these funds is not owned by the funds [but by a] person. And if they have a real need for it, then they have every right to access it.”

Sheridan Randall, 30^th April 2020