Nation-building Funds

The Nation-building Funds (NBF) were established on 1 January 2009 by the Nation-building Funds Act 2008 External Site(NBF Act). The purpose of the NBF was to provide financing to critical areas of infrastructure, including through;

  • the Building Australia Fund (BAF), which supported the creation or development of infrastructure in the areas of transport, communications, eligible national broadband network matters, energy and water; and
  • the Education Investment Fund (EIF), which facilitated the creation or development of infrastructure in the areas of higher education, research, vocational education and training, and other eligible education.

The NBF previously included the Health and Hospitals Fund (HHF). The HHF was closed on 29 October 2015 and the uncommitted balance of the HHF was transferred to the Medical Research Future Fund.

The BAF was closed on 1 September 2019 and its uncommitted funds (approximately $4 billion) were transferred to the Future Drought Fund. The Future Drought Fund was established by the Future Drought Fund Act 2019 on 1 September 2019.

On 17 October 2019, the Parliament passed legislation that will close the EIF and transfer its uncommitted funds (approximately $4 billion) to the Emergency Response Fund upon establishment. The legislation will commence on a date to be fixed by Proclamation.


The NBF Act gives effect to the following:

  • Investment Mandate: the responsible Ministers are required to issue an Investment Mandate (detailed below).
  • Crediting amounts to the NBF: the responsible Ministers may make credits to the NBF. For information on the credits, refer to the Investment Performance and Financials webpage.
  • Debiting amounts from the NBF: the Finance Minister, can authorise disbursements (debits) from the NBF, on the recommendation of the relevant portfolio Minister. For a list of commitments, refer to the projects page.

Investment Mandates

The responsible Ministers provided the Future Fund Board of Guardians (Future Fund Board) with strategic investment guidance through a written direction for each of the NBF. These directions are provided through legislative instruments that are not subject to disallowance.

The Building Australia Fund Investment Mandate Directions 2009 and the Education Investment Fund Investment Mandate Directions 2009 were issued on 14 July 2009. The investment mandates direct the Future Fund Board to adopt a benchmark return of the “Australian three-month bank bill swap rate +0.3 per cent per annum, calculated on a rolling 12-month basis (net of fees)”. In targeting this benchmark return, the Board must minimise the probability of capital losses over a 12-month horizon.

The cash and assets of the BAF were transferred to the Future Drought Fund on 1 September 2019. Until an investment mandate is issued for the Future Drought Fund, the Future Fund Board is investing the Future Drought Fund in line with the BAF investment mandate.

Contact information on this page: Funds and Superannuation Branch

Last updated: 21 October 2019