Economists want the Albanese government to shut down the Future Fund and sell its $250 billion in assets to tackle national debt. 

The suggestion comes from a paper covering a range of concerns that the Future Fund's potential returns might not suffice to justify its existence.

The author of this proposal, Dimitri Burshtein from the Centre for Independent Studies, suggests that by liquidating the Future Fund, along with subsidiary funds amounting to $47 billion, the Albanese government could significantly slash Australia's $896 billion gross debt by over 25 per cent. 

Additionally, this move could save up to $10 billion annually in interest payments.

Initially established in 2006 by then Treasurer Peter Costello, the Future Fund's primary objective was to address unfunded pension liabilities for public servants. 

The fund received an initial funding of $60 billion from budget surpluses of the Howard government and the proceeds of Telstra's privatisation. 

Subsequent subsidiary funds, formed after 2014, were fueled by government debt and catered to areas like the National Disability Insurance Scheme, medical research, and drought preparedness.

Mr Burshtein says maintaining a $250 billion fund collection is illogical when the federal government's net debt is in a positive position. 

He points out that the Future Funds rely on borrowings, making it necessary for them to generate returns exceeding borrowing costs for the Commonwealth to merely break even on a cash basis.

The cost of sustaining the Future Fund and its subsidiaries stands at approximately $10 billion annually, equivalent to the interest on an extra $250 billion in government debt at a 4.1 per cent cash rate. 

Consequently, this makes the Future Fund's maintenance one of the top 20 expenses in the federal budget.

Peter Costello, the chairman of the Future Fund, rebuts this proposal, highlighting that it embodies short-term thinking that has led Australia into financial troubles previously. 

He claims that the Future Fund, as the Commonwealth's primary financial asset, is meant to safeguard the balance sheet from being entirely debt-exposed.

Treasurer Jim Chalmers has not commented on the proposal.