Former ACTU leader and climate change minister Greg Combet is the new head of Australia’s sovereign wealth fund.

Treasurer Jim Chalmers confirmed Mr Combet’s five-year term as chair of the Future Fund.

The appointment follows the resignation of former chair and federal Liberal treasurer Peter Costello, after 14 years on the Future Fund board.

“Greg Combet has extensive experience in investment and superannuation as well as government and the climate and energy transformation in particular,” Dr Chalmers told reporters in Canberra on Monday.

“What we’ve been able to do here is ensure that we can renew and refresh a really important economic institution with an appointment of this calibre.”

Treasurer Jim Chalmers says the former Labor MP is a high-calibre appointment. (Mick Tsikas/AAP PHOTOS)

Mr Combet was climate change minister under former prime minister Julia Gillard.

He was also a member of the executive board of the national COVID-19 co-ordination commission.

It’s expected he will take up the position of Future Fund chair in mid 2024 after finishing his time as chair of the Net Zero Economy Agency.

The government has also appointed non-executive Macquarie director Nicola Wakefield Evans to the Future Fund board, along with Commonwealth Bank Officers Superannuation Corporation chair Rosemary Vilgan.

Former Macquarie banker Mary Reemst will serve as the acting chair from February 4 until Mr Combet starts.

Shadow treasurer Angus Taylor praised Mr Costello’s tenure, while calling for the fund’s work to continue, unchanged.

“The Future Fund plays a vital role in the Australian economy, and it is crucial that its mandate is not changed or altered,” he said.

“The Future Fund’s investment mandate has been very clear – to invest for the long-term benefit of the country. It must not become a slush fund for Labor’s ideological pursuits or the treasurer’s thought bubbles.”

The Future Fund was set up in 2006 to strengthen the nation’s long-term financial position and cover public sector superannuation liabilities.

The fund manages money on behalf of the federal government to strengthen the long-term financial position, as well as handle larger projects that are expected to grow over time.

The Future Fund oversees six other wealth funds, including a $22.3 billion medical research fund, a $4.4 billion disaster ready fund and a $16.9 billion disability care fund.

It also oversees the $10 billion Housing Australia Future Fund, which was set up by the Labor government in 2023 to deal with housing supply.

Its portfolio has grown steadily since its inception and is now worth more than $200 billion.

It has delivered an average annual return of 8.8 per cent per annum over the past decade.