The government of the Australian state of New South Wales set up a sovereign wealth fund, seeded with A$3 billion ($2.3 billion), as a means of improving long-term management of public debt.
The state budget for the fiscal year starting July 1 said the NSW Generations Fund will "guard against intergenerational budgetary pressures and keep debt sustainable for the long term."
The fund will be managed by the New South Wales Treasury Corp., the state government's financial arm, which oversaw A$84 billion of state assets as of June 30, 2017.
Dominic Perrottet, the state treasurer as well as its minister for industrial relations, in a statement called the NSW Generations Fund a "game-changing reform," with both long-term rewards in better management of state debt and more immediate payoffs in the form of a program funneling a portion of annual investment returns for projects — proposed and voted on by citizens — to make their neighborhoods "better places to live."
An NSW news release said the fund will grow "through investment returns and future contributions."
A spokeswoman for the treasurer didn't immediately clarify whether the fund's investments would be driven solely by prospective financial returns or take considerations into account such as the development of the state's economy.