The federal government is keen to appoint an outsider to head up the massive Future Fund amid a drive for renewal at the sovereign wealth fund.
It is understood the government favours looking beyond the current Future Fund Board of Guardians for a candidate to succeed current chair Peter Costello, whose term ends in February.
Mr Costello, who as long-serving treasurer in the Howard government helped set up the fund, advised the government in September that he would not seek a third term as chair after 10 years in the role.
There has been speculation that former treasurer Wayne Swan and former finance minister Lindsay Tanner may be among those considered for the prestigious position.
The sovereign wealth fund was established in 2006 with $60.5 billion from the sale of Telstra as a way to help the government meet its unfunded superannuation obligations. It has since grown to reach $206.1 billion as at June 30.
There have been calls for the fund to be liquidated to pay down government debt or finance other priorities such as renewable energy or public housing, but Mr Costello has pushed back against these suggestions and there is no indication the government is considering such ideas.
Treasurer Jim Chalmers said the future fund was "an incredibly important institution" that has helped improve the government's financial position.
"It does help us meet some of the Commonwealth's liabilities," Dr Chalmers said. "It has been performing relatively well over time. That's a good thing. We appreciate that. We're grateful for that."
An analysis commissioned by the fund found that liquidating it to reduce government debt would cost the public $200 billion over 10 years because the investment gains foregone would exceed the reduction in interest payments.
Announcing Mr Costello's impending departure, Dr Chalmers said that the fund had achieved an average annual rate of return of 8.8 per cent in the past decade.
In a sign that the government is not planning to wind the fund up, former Macquarie Group chief executive Mary Reemst has just been appointed to the board for a five-year term.
The terms of two other board members - former treasury secretary John Fraser and businessman John Poynton - are due to expire in coming months and Dr Chalmers has flagged it will be seeking to make fresh appointments.
"The government will ... carefully consider any future board vacancies as an opportunity to refresh and renew the Future Fund's leadership," the treasurer said.
The recent and looming departures mean four out of seven board positions at the fund will be turned over in the space of five months, giving the government a rare chance to reshape the organisation's trajectory.
Plans to overhaul the leadership at the fund follow personnel and structural changes made by the government at other key economic institutions including Reserve Bank of Australia reforms and the appointment of a new RBA governor, Michelle Bullock, and the recruitment of Danielle Wood to head the Productivity Commission.
The government said it would initiate a "formal, merit-based recruitment process" to select a new chair and has invited members of the public to register their interest in vacancies at the future fund and other organisations.
Mr Costello, who has been at the fund since late 2009, became chair in 2014 following the early departure of David Gonski from the role.
In August, Mr Costello argued against winding up the fund, warning that "you only get to spend the Future Fund once. After that it is gone".
The former treasurer described the fund as a "once in a century asset. If you spend it now you won't be able to do it in 2040 or 2050 or 2060," he said.
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