Alan Kohler had a fabulous column in Business Spectator this morning about the Reserve Bank super fund cranking up its risky investments in 2006-07 and probably plunging into unfunded territory with the broader market.

Since 2005, the cash allocation is down from 14% to 5%, bonds having been reduced from 17% to 7% and the Australian equities exposure has soared from 21.3% to 41.7% while the private equity/alternatives asset class is up from 6.7% to 13%.

Having more than 60% of your assets in the risky class is crazy for a super fund and the RBA scheme will be getting pounded as we suffer our 11th straight share market loss. However, the scheme is largely defined benefit so it’s us taxpayers, not the Reserve Bankers, who are carrying this risk overload.

That said, at least the RBA has a super scheme – Federal judges are owed almost $500 million in super with nothing set aside for them.

Kohler’s revelation ties in nicely with Kevin Rudd’s speech in Perth this morning lifting the targeted budget surplus from 1% of GDP to 1.5% – a whopping $18 billion a year based on our $1.2 trillion economy.

Previous supposedly tough talk about finding an additional $10 billion in cuts over four years was small beer on federal outlays that are forecast to be more than $1 trillion over that period and $235.6 billion this financial year alone.

Suddenly demanding an extra $6 billion surplus every year is real action that once again highlights the fiscally recklessness of the Howard years.

Kevin Rudd is absolutely right to focus on the question of savings at all levels because as a nation we’ve become addicted to debt, which is why we’re being swept up in this global credit crunch.

Unfunded federal superannuation is part of this problem – there’s still about $50 billion of it. The Reserve Bank super fund was one of the only meaningful federal schemes that was fully funded but Kohler is now claiming it too might have slipped into deficit, further weakening the Federal budget.

Note 14 from the 2006-07 RBA annual report claims its super funds have $796 million in assets and $607 million in liabilities and that prudent steps were taken to ensure it remained fully funded when the salary contribution was lifted from 15% to 18.3% in January last year.

If Kevin Rudd introduces some honest accounting policies – such as funding all super schemes directly so that net liabilities do not rise by another dollar – he’ll be looking for a lot more than $6 billion a year the way the markets are going.

He could start by axing Reserve Bank dividends until we’ve built up some decent foreign reserves too.

Disclosure: Stephen Mayne has no interest in Business Spectator. His only investments are tiny exposures to almost 600 stocks and 100% of www.maynereport.com.