"Almost half that wealth is just the value of their stocks"
So if you were given $50 billion in stocks today, you wouldn't actually be any richer than you were yesterday?
It is political suicide over in the West. When they proposed the mining tax a few years back the propaganda wheels produced by these mining giants went into overdrive.
Ads on every television and radio station 24 hours a day saying the state economy will be destroyed is very effective.
A lot of people don't realise that Australia does have a sovereign wealth fund that was started 15 years ago, called the future fund: https://www.futurefund.gov.au/.
It isn't $1,339 billion dollars but considering it has only been around for less than 2 decades, $200 billion is nothing to sneeze at.
Technically there a multiple sovereign wealth funds that the Future Fund Management Agency is responsible for. The big one is indeed the Future Fund though. Worth highlighting that the Future Fund was mostly funded from the sale of Telstra and they have not received any additional contributions since then (nor any withdrawals) so that 200bn is all portfolio growth - a great example of the power of compounding. On that point, it started investing at the most fortuitous time, that being post the nadir of the GFC. If they started investing one or two years earlier, it’s unlikely it would be 200bn today.
Yeah but FF exists to pay for Australia’s federal pension liabilities.
As a future recipient of an extremely generous military superannuation scheme, I’m happy it exists. But it’s not really a sovereign wealth fund.
Think of it as a guarantee that Australia won’t default on pension debt.
That’s what the Norwegian sov wealth fund is for. It’s officially called the Government Pension Fund.
The use of proceeds doesn’t determine whether a fund is or isn’t a sov wealth fund.
>FF exists to pay for Australia’s federal pension liabilities
That's exactly what the Norway Fund does.
*This could have been Australia* is a bit of a dishonest title, as total Superannuation is quite a bit larger than the Norway Fund, and it's individual, giving people more control of how funds are invested
You don't need a massive sovereign wealth fund (which Australia does have, though) when your citizens are the second richest in the world due to a great Superannuation system
It’s not a sovereign wealth fund. It’s to pay for the liabilities of public service pension plans which were unfunded and still is only partially funded by the future fund. I.e the liabilities for public service pensions still exceeds the total value of the fund.
Go read up on it. Other things have been added to it like the medical research future fund, but the bulk of it - 200 billion worth of assets are entirely allocated to fund the pension liabilities of public servants. The rest of the fund is a fraction of the total assets and were only recently added more as a token to claim they’re doing something but not really. It’s like setting up a trust fund for your kids and chucking in $50 to tell your kids you’ve got a ‘fund’ for their future.
Happy for you to share your definition. And if it includes terms like ‘surplus’ not that none of the money is surplus. It’s to offset liabilities that are currently unfunded. The money to establish the fund also wasn’t ’surplus’. It was generated by the sale of public assets and could have been used to pay down debt but was instead allocated to offset pension liabilities. And we still have a growing debt problem as well.
[Sovereign Wealth Fund (SWF) Definition](https://www.investopedia.com/terms/s/sovereign_wealth_fund.asp)
"The funding for a SWF can come from a variety of sources. Popular sources are surplus reserves from state-owned natural resource revenues, trade surpluses, bank reserves that may accumulate from budgeting excesses, foreign currency operations, **money from privatizations**, and governmental transfer payments."
Future Fund was funded from a combination of gov't surpluses and the Telstra privatisation. The latter being the largest component, to be sure.
Your point on debt is irrelevant too. Norway has more debt per capita than Australia; they could use the Oil Fund to pay their outstanding debt times over but instead it is there to offset future pension liabilities. Does this sound familiar?
It is not a SWF as it is understood by many to be for the benefit of all its citizens. When it was first established it was 100% entirely to fund pension liabilities of the public service. In the last 5 years they threw a few extra dollars for specific things like medical research. Again, just a marketing exercise. If you buy into this, you’re buying into marketing like I said.
Alright mate. Every participant in the institutional investing community, both here and abroad, classify or designate it as a SWF but I guess they’ve all just bought into the marketing. Some punter on Reddit knows what it really is.
We could still start a proper sovereign wealth fund if we wanted to.
Those in power are too captured by corporate self interest and persuaded by lobbying though.
I think the major point is that we have a tremendous wealth of natural resourses that we allow to be extracted for very little by foreign companies. Sure we get indirect benefit from mining employment etc but we could be taking much more - it's not like mining companies can just go elsewhere when the stuff is in our soil.
Our sovereign wealth fund is headed up by a climate change denier last time I checked
Edit: Peter Costello has taken over but is not much better than the old codger he replaced
We also have $1.5 trillion in superannuation - that's average Australians and worth more than the entire ASX and growing.
Sure, more judicious use of proceeds from resource extraction would be awesome but we are way ahead of most countries - even China.
This is completely irrelevant and should never be used in a comparison with Government funds again. Superannuation is our money. The government has absolutely no right to touch it. Discussion like this is why im glad most of my investments are outside of super, I have 35 plus years till I cant use it and I've noticed comments like yours becoming far more frequent lately.
Jeez. Get out of bed on wrong side as frankly that is a pretty OTT response.... Besides your histrionics you're not entirely wrong, but you're missing a lot...
1. Superannuation is a pool of money that is mum and dad savings as you well know. It is then invested into shares, debt, infrastructure, private equity, etc. I.e. if we wanted, this could be allocated more to infrastructure or healthcare - those settings are set by the prudential regulator. The same could be said about bank deposits. Those savings help finance our economy.
2. The future funds of most countries are to finance unfunded pension liabilities in the future. Thanks to Australian super, we only have an unfunded public sector pension liability which is what our $200b future fund is for...
3. Unlike most countries we are very well positioned for the future.. we have enormous levels of economy wide savings. They're majoritively private sector savings but we know that governments are pretty shit at allocating capital efficiently.
4. What's the real difference between private sector and public sector savings? Not much. Government savings are excess of tax revenue over expenditure. Personal savings are excess revenue over tax. Personally I'd prefer the government to return my money and I save it than they do... and those savings are then either directly invested into shares or indirectly into infrastructure.
What you are hinting at is a retroactive tax. Super is my money that I have been forced to invest for my entire working life, I decide where I want my money invested. Its entire purpose is to make me more money so I can self fund my retirement. I pay tax to fund healthcare, social support, education, and what ever else. So if the government started using our super like you have described then all super actually ended up being was a very large sneaky tax increase. Would you be happy if they announced a 10% tax increase tomorrow? what if they also said they were starting it from 20 years ago so you now owe us x amount of money? that's what your talking about but they are also getting the compounding growth too.
I would much prefer them to tax mining profits more, its a profit so they can afford it.
I'm not proposing super be used by the government at all. It's our money. What it can do is fund government projects and it already does under PPP - private public partnerships and it will fund 3rd party private investments (e.g. corporate debt). Future funds aren't a slush fund - even in Norway. They do the same thing as our super funds - invest. That's all these big funds do. Sovereign Wealth Funds and Super aren't government expenditure pools here or in Norway.
That’s just completely not true. You are comparing apples and water. Completely separate thing. One is the private wealth of citizens invested through years of work and weekly sacrifice. The other is the profit from selling resources which a very small amount of people actually worked to extract, which if they didn’t tax would never even be seen by Norway’s citizens unless they were share holders.
There are zero reasons why can’t have super and a sovereign wealth fund. trillions of reasons why they should never be spoken of in the same context.
And don’t be so sensitive to a bunch of words you’re reading on reddit. I’m not offended or emotional in my replies you’re just interpreting it that way.
I think we absolutely could. It would have to be a long term project however. Something like a fee per tonne of minerals extracted, starting in 2030 at a low rate but steadily ramping up over time.
This way new projects would be able to factor it into their economics, and existing operations would have time to adjust.
The industry would still fight tooth an nail to stop it however. The
Norwegians were smart to introduce it from the very beginning.
The concerning thing is that some politicians and wannabe's think we could do a Chavez and take the whole lot by legislative fiat & failing that, force....and think that there wouldn't be any consequences.
As someone who has worked at an Australian sovereign wealth fund, blame labour and the AFR.
Every time we get money to invest on behalf of the public the communists act like any form of investing is gambling
Respectfully I don’t really care about your opinion. The public thinks we should have a fund that could be used to pay for government services and infrastructure but act like any attempt to fund such a fund is misappropriation by corrupt politicians.
There is no nonsense. The public wants an investment fund but doesn’t want to provide the money to set it up. Who knows where they think they money is going to come from
Lol I’d love to hear how “labour” (sic) have stopped anything.
There is more than one Australian sovereign wealth fund?
I’m keen to hear more about this?
Why do you think Gough Whitlam was deposed?
He was going to renationalise the minerals industry and that ruffled a lot of feathers.
If he'd been successful, the sovereign wealth fund would make Norway's look like a dollarmites account.
IMO, you can't compare super to a sovereign fund...
One is investments for an individual in lieu of income from your employer. The other is the royalties from a business being reinvested for the sake of the countries long term wealth once the expensive stuff in the ground runs out.
>IMO, you can't compare super to a sovereign fund
The way I get the implication of this post is something like:
>Australia wasted their opportunity to become wealthy/have an investment fund.
This isn't true, Australia is one of the wealthiest countries ever, but it is held privately, and is very well spread among the people.
If you want to play the game of not being able to compare, you also can't compare a countries **Oil Wealth fund** to a country with not that much oil.
Fair enough.
I interpreted this post to mean, "Why Australia hasn't been able to take advantage of their natural resources to ensure the country will always be wealthy".
Super = needing constant industry growth to feed wages and employment to grow.
Royalty fund = Having investment money to ensure new industries can be developed, R+D funded, infrastructure built.
You can compare countries that extract resources and sell them though. Things like percentages exist you know, which means that if one country taxes a resource profit at 50% and the comparative country is only taxing them at 15% you have to ask why?
On what basis are you suggesting oil is orders of magnitude more lucrative than other resources? Margins? Volume? IRR? Australian iron ore is incredibly lucrative on all these measures. It's high margin, we produce metric shittons of the stuff, and the companies that produce it earn outstanding returns on capital.
A supermajority of the world's oil is controlled by a globe-spanning cartel that exists solely to jack up prices via strangling supply. Saudi Arabia and Russia, for example, produce a quarter of the world's oil and have production costs of $9/bbl and $15/bbl respectively. Despite this, they lead a cartel that seeks to keep oil prices 5-10x higher.
Oil producers that aren't members of the cartel indirectly benefit from these artificially inflated prices. It's the main reason why the supermajors are against crackdowns on OPEC. No such cartel exists for other minerals.
Norwegian citizens still rank highly in terms of wealth AND have a sovereign wealth fund. It is possible to have a rich citizenry and rich government. It’s not one or the other.
Who said that we can't have both? I agree. Australia is one of the countries with rich citizens and government.
Australia has more private wealth and a smaller sovereign wealth fund compared with Norway.
We just have more slated in the private side and more overall (Though partially a per capita thing).
Compared with what?
Compared with all the countries around today, and every country in history, yes it is pretty well spread.
Compared to the perfect utopia in your head, no Australia is Hell by comparison and we should euthanize the population to end the suffering.
You do know where a significant percentage of Super investments go, right? Into buildings and roads and REITs that fund hospitals and airports and distribution centres and ports and just about any and every piece of infrastructure you can think of. It doesn't just get held to the side in a bank account waiting for that particular person to retire so it can be paid out
Yep it does. And it is being done to make sure MY retirement is good.
It is not being done to make sure the future of AUSTRALIA is good.
They are two very different goals. Just because there is some overlap doesn't mean it is the same thing.
For instance, would my super invest in the development of a new industry that was developed off the back of government R+D spend when there is low chance of future profitability, probably not. Would a government fund do this, probably.
This is what defines the difference between the two concepts.
Due to the magnitude of money held in super funds, all super funds have significant positions ($ wise, not % wise - but several percent of 2tn is a lot) in domestic and international venture capital and private equity funds. This materially outstrips government led investment in the sector
Super means less spent in government pensions. It helps to make sure people don't waste their money which is important in an undisciplined nation like ours where people refuse to save. Super is an excellent scheme.
Not arguing that super isn't worth it and a valid tool.
My point is what we are missing with not taking advantage of the natural wealth we have that will run out eventually.
It's not a one or the other scenario... you can have both.
This is all ideology, these folks are responding to "Hey we could of not been in a Trill of national debt by taxing fossil fuels"
with "But we have a super annexation scheme" - WTF does this have to do with taxing fossil fuels?
Ironically a large portion of that super is invested in the very mining companies people here are saying we should’ve invested in…
IMO super is the preferable strategy.
Australia did not "give away" our natural resources, we sold them for market rates and got a very good deal. Australia is one of the richest countries in the world. Not only is it one of the richest countries in the world, it is pretty well spread as well. [Australia is near or at the top of median wealth charts, and if you look at the ratio of median average, it is among the highest.](https://en.wikipedia.org/wiki/List_of_countries_by_wealth_per_adult#By_country)
You know how we have free trade with Japan?
Why is it that Japan has a higher IMPORT TAX on our LNG than the royalties we earn??? We did get sold out here.
Not that I think the government would allocate any extra revenue well anyways. WE did have an awesome sovereign fund, it was call the National Welfare Fund, look it up. It got absorbed into general revenue....
Very few governments do well... How is it that USA (richest nation on earth), UK, Aus, Japan etc etc have massive government debts? It's pathetic. They should all have zero debt...
As usual, follow the money: It's gone to lucrative private contracts (usually tied up to family and friends by government MP's) and interest payments to bankers (which again... follow the politicians many of them come from and return to banking.... You guys all get excited about the few investment homes the pollies own, that's nothing compared to the income they earn from the employment/consulting post politics).
Anyways... I got no interest in living in Europe... that place is a tinder box of racial, sexual and economic woes and unrest.
We gave it away 100%.
The margins can be insanely high in the companies favour.
No matter which way you slice it, Australian got a poor deal for our resources.
If Australia was less profitable to do business, businesses would have gone to Africa or (insert one of many mineral rich countries) for resource extraction.
Seeing how the Simandou saga in Guinea has been tracking (mired in bribery and corruption, massive cost overruns and 10 years and ongoing overdue) business will grumble and gnash their teeth if royalties were raised here, but they won't be leaving in a hurry. 60% of the world's iron ore comes out of Australia, that isn't changing soon.
Australia *still* has over a quarter of the worlds crude iron ore. By comparison South Africa has around half a percent of the worlds iron or reserves (roughly 12th highest as a country). Outside of the top 10 countries with the highest reserves there is only about 10% of crude iron ore to go around. If that was wholely located in Africa it stilll couldn't compete with Australia alone in potential tonnage, yet alone economic reality.
In terms of production Australia extract over a third of the iron in the world, while South Africa comes in 6th with around 3%. Once again if Africa as a whole was to establish mines and form a conglomerate iron tycoon it would more than likely still be of benifit to buy from Australia due to political/social/economic stability.
Nope, the mines here are some times so profitable you could slap a 90% super profit tax on those babies and there would be multiple companies and venture groups just salivating to take over if the existing companies wanted to divest.
For Iron ore there is litteraly no where else to go to replicate the same volume, our costs are also the lowest in the world and not by a small margin.
We are also the best juristiciton in the world to do buisness, there is a nice large high grade Iron ore deposit in Africa that has been sitting for multiple decades because its almost imposible to develop there.
Frankly, the govertnments job was to get the best deal possible for our products and they have failed miserably.
Dude, the reason African Iron deposits aren't mined is because they do have a tendency to add a 90% super profits tax afterwards, investors know this, you are making an argument to not change Australia's approach.
What you are describing is sovergen risk and is far more than just adding taxes, it is also confiscating assets etc.
There are massive problems of all sorts, its not just taxes.
If companies decdied they wanted to divest their assets I could pick up my phone right now and call an extreamly high net worth individual I spent several years reporting to and he would buy as many of those assets as he could get because even with such a tax their margins they will have margins higher than other mines he operates.
What you are repeating is just propoganda.
This is exactly what I have been saying for years. The only reason we don't tax our resources more is because lobbyist have infiltrated the government (mates rates). I guarantee if you started the tax at 100% and dropped 1% a day it wouldn't make a week until someone jumped on it. There are a lot of companies out their operating with thiner margins than that. Frankly its laughable that the media has convinced people if the current corporations exit the mines the country will collapse.
Tightest work force in history... and the mining sector only employs 1% of the workforce...
Trust me, Holden/ford/toyota leaving didn't collapse the place... losing mining wouldn't be the end of the world: It wouldn't be ideal, but it wouldn't be the end of the world.
Hell, we could just sell houses to each other with ever rising credit loans to get us through /s
I worked for a company that decided to invest in Africa and to end all their Australian exploration.
They no longer exist.
For Iron ore porduction, costs in Africa are twice as high, soveriegn risk, lack of infrastructure and development.
Not to mention they don't have sufficent resources to meet demand, Africa produces barely 1/7th of our volume and litteraly can't make much more.
This is what the oil companies said when Norway was going to put their 79% royalty on them...and then Norway implemented it at 79%...and the oil companies did not leave.
It is clear that you don’t understand how it works. Norway sold their oil and put the money in a fund for growth. Australia sold its natural resources and metals and invested that money into infrastructure projects around the country. We didn’t lose or wasted any money as implied by some. Yes, we could have reinvested that money back in the stock market and other markets like the Norwegian fund did but we invested a huge some of money back into people.
Norway may run out of oil soon but we won’t run out of iron and other metals anytime soon.
Lol, no way we invested all that money in infrastructure. If that was the case why are they selling off roads and making us pay tolls and privatising ports and other critical infrastructure? They are making private companies pay for it and the charge is for it.
Because the need is more than the supply. Governments invested that money into something. Whether it is infrastructure, health, education, defence or community services like aged care or childcare etc.
All the toll roads are put in place by the state government so it’s the government of the day kind of thing. And it’s most visible in sydney and not so much in other metropolitan cities in Australia.
I do also remember Joe Hockey or someone did start a government fund with about $100 billion I believe. I do wonder what the status of that fund is.
It is always good to save money for future like Norway did but not all countries can afford that luxury. I think we have more pressing need to spend the money now on lagging infrastructure, health and education.
Thankyou! Glad there's still some common sense around here.
Our super funds are so large, they are now distorting our account surplus (not trade surplus).
If people wanna get real serious about it though... Google Australian National Welfare fund... Oh yeah, that baby was on it's way, until the boomers allowed the government to absorb that into general revenue....
Downvotes in bound no doubt.
I understand it is funded through proceeds of extractive industries (oil) to capture benefits for citizens. Australia doesn't have any comparable method to ensure Australians actually secure a long-term benefit from things you can dig up once and never again.
If you count all employers as part of an extractive industry (labour), then that's *exactly* what Australia is doing. Anyone providing any form of permanent employment has to pony up an extra 10.5% of the employee's pay to a 'distributed wealth fund'.
I'd argue that the Australian approach is better given how labour is a much better resource to bank on than oil when it comes to the purpose of making sure people who sold their labour have secure pensions.
Firstly, super is not a distributed wealth fund, assets are held for specific individual beneficiaries.
Secondly, the point I was making was not to compare pension/super systems but to compare mineral resource taxation mechanisms - Norway captures a lot of the proceeds of sovereign assets while Australia captures almost nothing. And Super is not a version of this - super is calculated based on salary whereas resource rents are taxed on some combination of volumes, revenue or profits.
This gives us 2 Australias.
One group of older millionaires, people who own houses in capital cities, self-funded retirees.
Another group of employed people who cant get a rental, let alone have enough savings to buy a house.
Australia is a fool we give away ore, coal and gas and other minerals. Australia could be the wealthiest country in the world. Unfortunately that's not the case
We are the second wealthiest country in the world
It just happens to be owned privately by its citizens. I know it annoys you that some people have dared to succeed in their own right.
About 80% of our trade balance is directly against shit we pull out of the ground. We basically don't manufacture anything post-1950s here - so... pretty much every aspect of our modern life is directly due to this primary production - so I'd say it's worked out pretty great for us.
[If only they tried it](https://www.allenovery.com/en-gb/global/news-and-insights/publications/australian-government-repeals-controversial-super-profits-mining-tax) ...
….it’s sad that Rex Connors attempt to Nationalise Australia’s mineral and energy wealth in the 1970’s was blown up by poor political strategy and outrage from the conservative media and business…private businesses still would have operated the mines and made profits but there would have been better financial returns to the country for the resources…
While no one is immune to criticism, there is a clear pattern of decisions over generations that have caused this situation. And we must do better. But any attempt to discuss it is quickly dominated by angry monkeys throwing their own excrement at each other. The contrast with aviation is crazy. Flying has become amazingly reliable due to the development of an open, necessarily honest system of investigation and culture change. We've tolerated the opposite situation in a vastly more important area of life: running our frikkin country.
PH is just insane. So much wealth yet there's basically 1 restaurant? It's extremely disappointing. I'm ok with it just being a work site, but a lot of people live there now and it can't keep getting run like this.
Port Headland could be huge if anyone wanted to live there. It's still a very remote location in an inhospitable area of the country surrounded by a lot of nothing. It could be like Vegas if Vegas was a 10 hour drive from the next city
Ok, first, my comment was trying to convey that given the population and resources of Norway, it's more likely a "sovereign fund" here would not really have sustained the entire population like it does in Norway, merely perhaps WA.
The other thing is
"Out of hydrocarbon and ore"...really? "Out of"? 🧐
I was reading about Musk needed lots more lithium & nickel for his Tesla batteries. Australia will supply the minerals, Musk will do all the value adding & make most of the profit.
This is a false comparison. This is comparing the extraction of a countries natural resources for the benefit of the country, rather then the benefit of the shareholders. Its about a responsible Government negotiating mineral rights that best benefits the country, rather than their lobbyists.
We should be negotiating from 100% down rather then from 0% up. I mean if someone comes to you and says I can sell your (insert what ever here) for heaps and we can split the money most people say 50:50 or 70:30. The actual owner is always the one receiving the greatest benefit which scales with amount of work required by the other party.
I don't believe this is true. They reached about 50% of NEW car sales in Norway being electric in the last year or so, maybe Oslo has higher rates of electric car sales, but highly unlikely it's 90% of the cars on the road are electric.
The real stats would already be impressive, no need to exaggerate.
Not sure why EV is such a big agenda atm. No harm in running mixed propulsion until things have advanced enough and to meet one’s requirements.
Not everyone has access to fast charging or power infrastructure that can fast charge. There are circumstances where there literally isn’t any grid or weight plays a pivotal role such as heavy commercial transport or aviation.
Then the affordability and false financial and environmental economy of changing an already running ICE vehicle, especially if hardly used.
That's not the point. Given the statistic, Norway would have just been fine withe their oil. Still they made ways to change the system. They changed their laws to give incentives in buying EVs such as free toll, parking concessions and even changing their laws that residential and commercial structures must include EV charging stations because they get it that people would rather want to charge their cars at home or while at work. They are also shaping their cities encouraging the use of bikes and making more walkable laneways. The point is, they could have just as easily lived off their oil, but they choose to look forward and plan accordingly. And yes, Middle East is fast adopting renewables for their own use even if they are literally swimming in oil.
Bottom line. Where will government get its funding from? Our population to geographic size (hence infrastructure) makes it super expensive and actually not economical. Are you suggesting we up the tax rate for an avg. income earner to ensure the people with enough money can afford an EV? Sorry that’s bollocks on many different angles - and I love EVs. You are effectively penalising light use, lower income earners with existing vehicles.
Every extractive operation in Australia should be at least 51% government owned. And none of this tax avoidance corporate structures.
Don’t know why this is so hard…..
Just make it simple. You extract this amount of gas/iron ore whatever you pay $x. Adjusted to global prices.
And reserve gas for domestic use sold at no more than $x….
Why is this so hard?
Counterpoint, government may do things less efficiently, because they are driven by politics. They may open a mine in a financially unviable area to create local jobs .
We have 20T worth of reources according to the link below. Norway doesn't even make the list of top countries of natural resources
https://www.statista.com/statistics/748223/leading-countries-based-on-natural-resource-value/
That is misleading because it is not the total amount that matters, but how easy it is to obtain.
It is like when people say that an asteroid has trillions of values of minerals. Sure, but we currently can't access it so it is worth shit.
The world isn't so simple that you can just pick a single measure and use that to see whether a country is doing well or poorly.
The things that affect how natural resources will benefit a country are:
* **public policy**
* resource type
* resource amount
* resource availability
* culture
* technology level
* skills level
* capital
* foreign investment
* location of country
* etc. (you get my point)
What the poster of this topic is trying to do is act like the **only thing** that matters is public policy. As if we just taxed it more then we would have 1 trillion extra. Life is not that simple. There are 100s of other factors that can, and have affected how the resource sector works.
from wiki
"In 2011, Norway was the eighth largest crude oil exporter in the world (at 78 Mt), and the 9th largest exporter of refined oil (at 86 Mt). It was also the world's third largest natural gas exporter (at 99 bcm), having significant gas reserves in the North Sea.\[2\]\[3\] Norway also possesses some of the world's largest potentially exploitable coal reserves (located under the Norwegian continental shelf) on earth.\[4\] More recently (2017), the Norwegian government has ranked 3rd worldwide as the largest exporter of natural gas, just behind Russia and Qatar.
"
Sure. But the value for the past fifty years of exports is much smaller.
I mean I agree with the general point, but Norway did also luck out in a very major way.
Dude, your tone is not particularly fun to chat with.
You think Aussie has since the seventies exported a higher dollar value than Norway via natural resources. Good luck with that, provide a source yourself.
Total superannuation assets totalled $3.4 trillion.
People privately owning assets is vastly better than government owning a fund.
The government fund has big issues being they are in control of how it is invested and how it is spent. You may never see a dime or benefit from the government fund.
You can control how your super is invested and how it is eventually spent.
And yes they are comparable because Norway would have to tax people or companies to have a budget surplus to save for a government fund in there first place.
Instead of taxing people to create a government fund, Australia forces people to create their own fund, which they can contribute more to.
Australia wins
Also Norway has one of the highest private debt to income.
Instead of the government taking on debt, the citizens are.
Government should be spending so citizens can save not vice versa
Despite Norway having 1.5x Australia’s gdp per capita, Australians have twice the median and mean wealth per adult and wealth equality is higher in Australia too
Oil funds are good, but like from a economic perspective what are they doing with the money. Like a gov should be investing in infrastructure etc.
Sure it makes it easier to get more debt. But its just cash. If its not improving life/economic output. What is the point.
Yep.... No one believes we even had one.
Then when you say the boomers allowed it to be absorbed into general revenue...
Oh the burn, I can feel the flames already...
and the down votes...
We actually have 248 billion if you add up all of our funds:
https://www.futurefund.gov.au/-/media/future-fund---documents/portfolio-updates/portfolio-update-to-31-march-2022.ashx?la=en&hash=65242A8C7C39D951001A2DBC3C52C3B3D92907FB
Table 11: Funds under management at 31 March 2022
Value $bn
Future Fund
Medical Research Future Fund
ATSILS Fund
Future Drought Fund
Emergency Response Fund
DisabilityCare Australia Fund
TOTAL
201.0 22.1 2.1 4.6 4.6 14.5 = 248.9
What exactly do we have to show for our resource wealth apart from an inflated currency (which kills manufacturing) and a few tradies with Maloos and jet skis? It seems the Middle East gets a lot more out of their resource wealth even with their Princes pocketing a good chunk
Another way of looking at it: There are 10 people in the world who alone have as much wealth as Norway's entire oil fund
I’m happy someone said this as it was my first thought too. How good is it that a whole country has nearly as much savings as 10 people!
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"Almost half that wealth is just the value of their stocks" So if you were given $50 billion in stocks today, you wouldn't actually be any richer than you were yesterday?
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Paper wealth
It still can be
It is political suicide over in the West. When they proposed the mining tax a few years back the propaganda wheels produced by these mining giants went into overdrive. Ads on every television and radio station 24 hours a day saying the state economy will be destroyed is very effective.
WA seems to be doing alright. http://www.dmp.wa.gov.au/Minerals/Royalties-1544.aspx
Pretty sure they’re one of the only states with a surplus right?
Yeah, due to all the mining royalties :D
A lot of people don't realise that Australia does have a sovereign wealth fund that was started 15 years ago, called the future fund: https://www.futurefund.gov.au/. It isn't $1,339 billion dollars but considering it has only been around for less than 2 decades, $200 billion is nothing to sneeze at.
Technically there a multiple sovereign wealth funds that the Future Fund Management Agency is responsible for. The big one is indeed the Future Fund though. Worth highlighting that the Future Fund was mostly funded from the sale of Telstra and they have not received any additional contributions since then (nor any withdrawals) so that 200bn is all portfolio growth - a great example of the power of compounding. On that point, it started investing at the most fortuitous time, that being post the nadir of the GFC. If they started investing one or two years earlier, it’s unlikely it would be 200bn today.
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Are you a super fund CIO?
Yeah but FF exists to pay for Australia’s federal pension liabilities. As a future recipient of an extremely generous military superannuation scheme, I’m happy it exists. But it’s not really a sovereign wealth fund. Think of it as a guarantee that Australia won’t default on pension debt.
That’s what the Norwegian sov wealth fund is for. It’s officially called the Government Pension Fund. The use of proceeds doesn’t determine whether a fund is or isn’t a sov wealth fund.
>FF exists to pay for Australia’s federal pension liabilities That's exactly what the Norway Fund does. *This could have been Australia* is a bit of a dishonest title, as total Superannuation is quite a bit larger than the Norway Fund, and it's individual, giving people more control of how funds are invested You don't need a massive sovereign wealth fund (which Australia does have, though) when your citizens are the second richest in the world due to a great Superannuation system
Well said, but IMO that defence super scheme isn't generous mate. It's barely adequate compensation and collective thanks.
Valid - I was a pilot, so the view is good from the top of the tree. But yeah, 4-6 years as a digger you’re not getting much out of them.
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...that are called defined benefit pensions...
stop being a pedant, you are wrong.
It's a pathetic shadow of what it could have been though
It’s not a sovereign wealth fund. It’s to pay for the liabilities of public service pension plans which were unfunded and still is only partially funded by the future fund. I.e the liabilities for public service pensions still exceeds the total value of the fund.
It absolutely is a sovereign wealth fund.
Go read up on it. Other things have been added to it like the medical research future fund, but the bulk of it - 200 billion worth of assets are entirely allocated to fund the pension liabilities of public servants. The rest of the fund is a fraction of the total assets and were only recently added more as a token to claim they’re doing something but not really. It’s like setting up a trust fund for your kids and chucking in $50 to tell your kids you’ve got a ‘fund’ for their future.
Ok but how is it not a sovereign wealth fund? Perhaps go read up what a SWF is. Spoiler: it’s got nothing to do with what the proceeds are used for.
Happy for you to share your definition. And if it includes terms like ‘surplus’ not that none of the money is surplus. It’s to offset liabilities that are currently unfunded. The money to establish the fund also wasn’t ’surplus’. It was generated by the sale of public assets and could have been used to pay down debt but was instead allocated to offset pension liabilities. And we still have a growing debt problem as well.
[Sovereign Wealth Fund (SWF) Definition](https://www.investopedia.com/terms/s/sovereign_wealth_fund.asp) "The funding for a SWF can come from a variety of sources. Popular sources are surplus reserves from state-owned natural resource revenues, trade surpluses, bank reserves that may accumulate from budgeting excesses, foreign currency operations, **money from privatizations**, and governmental transfer payments." Future Fund was funded from a combination of gov't surpluses and the Telstra privatisation. The latter being the largest component, to be sure. Your point on debt is irrelevant too. Norway has more debt per capita than Australia; they could use the Oil Fund to pay their outstanding debt times over but instead it is there to offset future pension liabilities. Does this sound familiar?
It is not a SWF as it is understood by many to be for the benefit of all its citizens. When it was first established it was 100% entirely to fund pension liabilities of the public service. In the last 5 years they threw a few extra dollars for specific things like medical research. Again, just a marketing exercise. If you buy into this, you’re buying into marketing like I said.
Alright mate. Every participant in the institutional investing community, both here and abroad, classify or designate it as a SWF but I guess they’ve all just bought into the marketing. Some punter on Reddit knows what it really is.
Set up by ex treasurer Peter Costello, who now happens to be the Chairman.
We could still start a proper sovereign wealth fund if we wanted to. Those in power are too captured by corporate self interest and persuaded by lobbying though.
We do have a sovereign wealth fund: https://www.reddit.com/r/AusFinance/comments/woki7y/comment/ikboq4q/
I find it much more likely that remorse is correct, he wouldn’t comment on something without supporting his claim
I think the major point is that we have a tremendous wealth of natural resourses that we allow to be extracted for very little by foreign companies. Sure we get indirect benefit from mining employment etc but we could be taking much more - it's not like mining companies can just go elsewhere when the stuff is in our soil.
Our sovereign wealth fund is headed up by a climate change denier last time I checked Edit: Peter Costello has taken over but is not much better than the old codger he replaced
It’s not the same.
We also have $1.5 trillion in superannuation - that's average Australians and worth more than the entire ASX and growing. Sure, more judicious use of proceeds from resource extraction would be awesome but we are way ahead of most countries - even China.
This is completely irrelevant and should never be used in a comparison with Government funds again. Superannuation is our money. The government has absolutely no right to touch it. Discussion like this is why im glad most of my investments are outside of super, I have 35 plus years till I cant use it and I've noticed comments like yours becoming far more frequent lately.
Jeez. Get out of bed on wrong side as frankly that is a pretty OTT response.... Besides your histrionics you're not entirely wrong, but you're missing a lot... 1. Superannuation is a pool of money that is mum and dad savings as you well know. It is then invested into shares, debt, infrastructure, private equity, etc. I.e. if we wanted, this could be allocated more to infrastructure or healthcare - those settings are set by the prudential regulator. The same could be said about bank deposits. Those savings help finance our economy. 2. The future funds of most countries are to finance unfunded pension liabilities in the future. Thanks to Australian super, we only have an unfunded public sector pension liability which is what our $200b future fund is for... 3. Unlike most countries we are very well positioned for the future.. we have enormous levels of economy wide savings. They're majoritively private sector savings but we know that governments are pretty shit at allocating capital efficiently. 4. What's the real difference between private sector and public sector savings? Not much. Government savings are excess of tax revenue over expenditure. Personal savings are excess revenue over tax. Personally I'd prefer the government to return my money and I save it than they do... and those savings are then either directly invested into shares or indirectly into infrastructure.
What you are hinting at is a retroactive tax. Super is my money that I have been forced to invest for my entire working life, I decide where I want my money invested. Its entire purpose is to make me more money so I can self fund my retirement. I pay tax to fund healthcare, social support, education, and what ever else. So if the government started using our super like you have described then all super actually ended up being was a very large sneaky tax increase. Would you be happy if they announced a 10% tax increase tomorrow? what if they also said they were starting it from 20 years ago so you now owe us x amount of money? that's what your talking about but they are also getting the compounding growth too. I would much prefer them to tax mining profits more, its a profit so they can afford it.
I'm not proposing super be used by the government at all. It's our money. What it can do is fund government projects and it already does under PPP - private public partnerships and it will fund 3rd party private investments (e.g. corporate debt). Future funds aren't a slush fund - even in Norway. They do the same thing as our super funds - invest. That's all these big funds do. Sovereign Wealth Funds and Super aren't government expenditure pools here or in Norway.
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That’s just completely not true. You are comparing apples and water. Completely separate thing. One is the private wealth of citizens invested through years of work and weekly sacrifice. The other is the profit from selling resources which a very small amount of people actually worked to extract, which if they didn’t tax would never even be seen by Norway’s citizens unless they were share holders. There are zero reasons why can’t have super and a sovereign wealth fund. trillions of reasons why they should never be spoken of in the same context. And don’t be so sensitive to a bunch of words you’re reading on reddit. I’m not offended or emotional in my replies you’re just interpreting it that way.
Not the same.
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Can you explain what each are used for?
I think we absolutely could. It would have to be a long term project however. Something like a fee per tonne of minerals extracted, starting in 2030 at a low rate but steadily ramping up over time. This way new projects would be able to factor it into their economics, and existing operations would have time to adjust. The industry would still fight tooth an nail to stop it however. The Norwegians were smart to introduce it from the very beginning. The concerning thing is that some politicians and wannabe's think we could do a Chavez and take the whole lot by legislative fiat & failing that, force....and think that there wouldn't be any consequences.
As someone who has worked at an Australian sovereign wealth fund, blame labour and the AFR. Every time we get money to invest on behalf of the public the communists act like any form of investing is gambling
Respectfully, I don’t think you know what “communism” means
Respectfully I don’t really care about your opinion. The public thinks we should have a fund that could be used to pay for government services and infrastructure but act like any attempt to fund such a fund is misappropriation by corrupt politicians.
Which is all fine and well…but you still don’t know what communism is.
Cool story. I still don’t care
Good for you buddy, you keep talking your nonsense 👍
There is no nonsense. The public wants an investment fund but doesn’t want to provide the money to set it up. Who knows where they think they money is going to come from
Lol I’d love to hear how “labour” (sic) have stopped anything. There is more than one Australian sovereign wealth fund? I’m keen to hear more about this?
Why do you think Gough Whitlam was deposed? He was going to renationalise the minerals industry and that ruffled a lot of feathers. If he'd been successful, the sovereign wealth fund would make Norway's look like a dollarmites account.
Unfortunately Rex Connor was the most inept person to try and implement a mineral/energy resources nationalisation plan…
[Australia has way more than that.](https://i.imgur.com/BnxZn2O.png)
IMO, you can't compare super to a sovereign fund... One is investments for an individual in lieu of income from your employer. The other is the royalties from a business being reinvested for the sake of the countries long term wealth once the expensive stuff in the ground runs out.
>IMO, you can't compare super to a sovereign fund The way I get the implication of this post is something like: >Australia wasted their opportunity to become wealthy/have an investment fund. This isn't true, Australia is one of the wealthiest countries ever, but it is held privately, and is very well spread among the people. If you want to play the game of not being able to compare, you also can't compare a countries **Oil Wealth fund** to a country with not that much oil.
Fair enough. I interpreted this post to mean, "Why Australia hasn't been able to take advantage of their natural resources to ensure the country will always be wealthy". Super = needing constant industry growth to feed wages and employment to grow. Royalty fund = Having investment money to ensure new industries can be developed, R+D funded, infrastructure built.
No way, boomers converting super to LandCruisers will totally build generational wealth.
For Toyota dealers
You can compare countries that extract resources and sell them though. Things like percentages exist you know, which means that if one country taxes a resource profit at 50% and the comparative country is only taxing them at 15% you have to ask why?
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On what basis are you suggesting oil is orders of magnitude more lucrative than other resources? Margins? Volume? IRR? Australian iron ore is incredibly lucrative on all these measures. It's high margin, we produce metric shittons of the stuff, and the companies that produce it earn outstanding returns on capital.
A supermajority of the world's oil is controlled by a globe-spanning cartel that exists solely to jack up prices via strangling supply. Saudi Arabia and Russia, for example, produce a quarter of the world's oil and have production costs of $9/bbl and $15/bbl respectively. Despite this, they lead a cartel that seeks to keep oil prices 5-10x higher. Oil producers that aren't members of the cartel indirectly benefit from these artificially inflated prices. It's the main reason why the supermajors are against crackdowns on OPEC. No such cartel exists for other minerals.
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None of these questions are relevant to your original statement.
That would explain why they make more money but not why the percentage they get is far greater then what we get.
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Norwegian citizens still rank highly in terms of wealth AND have a sovereign wealth fund. It is possible to have a rich citizenry and rich government. It’s not one or the other.
Who said that we can't have both? I agree. Australia is one of the countries with rich citizens and government. Australia has more private wealth and a smaller sovereign wealth fund compared with Norway. We just have more slated in the private side and more overall (Though partially a per capita thing).
Is it that well spread though? Rich people got a lot of it, middle people got some of it, and poor people got almost none of it.
Compared with what? Compared with all the countries around today, and every country in history, yes it is pretty well spread. Compared to the perfect utopia in your head, no Australia is Hell by comparison and we should euthanize the population to end the suffering.
You do know where a significant percentage of Super investments go, right? Into buildings and roads and REITs that fund hospitals and airports and distribution centres and ports and just about any and every piece of infrastructure you can think of. It doesn't just get held to the side in a bank account waiting for that particular person to retire so it can be paid out
Yep it does. And it is being done to make sure MY retirement is good. It is not being done to make sure the future of AUSTRALIA is good. They are two very different goals. Just because there is some overlap doesn't mean it is the same thing. For instance, would my super invest in the development of a new industry that was developed off the back of government R+D spend when there is low chance of future profitability, probably not. Would a government fund do this, probably. This is what defines the difference between the two concepts.
Due to the magnitude of money held in super funds, all super funds have significant positions ($ wise, not % wise - but several percent of 2tn is a lot) in domestic and international venture capital and private equity funds. This materially outstrips government led investment in the sector
Exactly. Well said.
Super means less spent in government pensions. It helps to make sure people don't waste their money which is important in an undisciplined nation like ours where people refuse to save. Super is an excellent scheme.
Not arguing that super isn't worth it and a valid tool. My point is what we are missing with not taking advantage of the natural wealth we have that will run out eventually. It's not a one or the other scenario... you can have both.
This is all ideology, these folks are responding to "Hey we could of not been in a Trill of national debt by taxing fossil fuels" with "But we have a super annexation scheme" - WTF does this have to do with taxing fossil fuels?
Ironically a large portion of that super is invested in the very mining companies people here are saying we should’ve invested in… IMO super is the preferable strategy.
And an even larger portion of those profits go directly overseas never to return any value to Australia.
85% of them :)
Now imagine Australia had all that super and hadn’t given away the countries natural resources.
Australia did not "give away" our natural resources, we sold them for market rates and got a very good deal. Australia is one of the richest countries in the world. Not only is it one of the richest countries in the world, it is pretty well spread as well. [Australia is near or at the top of median wealth charts, and if you look at the ratio of median average, it is among the highest.](https://en.wikipedia.org/wiki/List_of_countries_by_wealth_per_adult#By_country)
You know how we have free trade with Japan? Why is it that Japan has a higher IMPORT TAX on our LNG than the royalties we earn??? We did get sold out here. Not that I think the government would allocate any extra revenue well anyways. WE did have an awesome sovereign fund, it was call the National Welfare Fund, look it up. It got absorbed into general revenue.... Very few governments do well... How is it that USA (richest nation on earth), UK, Aus, Japan etc etc have massive government debts? It's pathetic. They should all have zero debt... As usual, follow the money: It's gone to lucrative private contracts (usually tied up to family and friends by government MP's) and interest payments to bankers (which again... follow the politicians many of them come from and return to banking.... You guys all get excited about the few investment homes the pollies own, that's nothing compared to the income they earn from the employment/consulting post politics). Anyways... I got no interest in living in Europe... that place is a tinder box of racial, sexual and economic woes and unrest.
We gave it away 100%. The margins can be insanely high in the companies favour. No matter which way you slice it, Australian got a poor deal for our resources.
If Australia was less profitable to do business, businesses would have gone to Africa or (insert one of many mineral rich countries) for resource extraction.
Seeing how the Simandou saga in Guinea has been tracking (mired in bribery and corruption, massive cost overruns and 10 years and ongoing overdue) business will grumble and gnash their teeth if royalties were raised here, but they won't be leaving in a hurry. 60% of the world's iron ore comes out of Australia, that isn't changing soon.
Australia *still* has over a quarter of the worlds crude iron ore. By comparison South Africa has around half a percent of the worlds iron or reserves (roughly 12th highest as a country). Outside of the top 10 countries with the highest reserves there is only about 10% of crude iron ore to go around. If that was wholely located in Africa it stilll couldn't compete with Australia alone in potential tonnage, yet alone economic reality. In terms of production Australia extract over a third of the iron in the world, while South Africa comes in 6th with around 3%. Once again if Africa as a whole was to establish mines and form a conglomerate iron tycoon it would more than likely still be of benifit to buy from Australia due to political/social/economic stability.
Nope, the mines here are some times so profitable you could slap a 90% super profit tax on those babies and there would be multiple companies and venture groups just salivating to take over if the existing companies wanted to divest. For Iron ore there is litteraly no where else to go to replicate the same volume, our costs are also the lowest in the world and not by a small margin. We are also the best juristiciton in the world to do buisness, there is a nice large high grade Iron ore deposit in Africa that has been sitting for multiple decades because its almost imposible to develop there. Frankly, the govertnments job was to get the best deal possible for our products and they have failed miserably.
It costs Fortescue $14.9 to get a ton of iron ore out of the ground and sell it for $143. There's room for some super profits tax
But the news told me if we tax them anymore then they will collapse and destroy our economy.
Dude, the reason African Iron deposits aren't mined is because they do have a tendency to add a 90% super profits tax afterwards, investors know this, you are making an argument to not change Australia's approach.
What you are describing is sovergen risk and is far more than just adding taxes, it is also confiscating assets etc. There are massive problems of all sorts, its not just taxes. If companies decdied they wanted to divest their assets I could pick up my phone right now and call an extreamly high net worth individual I spent several years reporting to and he would buy as many of those assets as he could get because even with such a tax their margins they will have margins higher than other mines he operates. What you are repeating is just propoganda.
This is exactly what I have been saying for years. The only reason we don't tax our resources more is because lobbyist have infiltrated the government (mates rates). I guarantee if you started the tax at 100% and dropped 1% a day it wouldn't make a week until someone jumped on it. There are a lot of companies out their operating with thiner margins than that. Frankly its laughable that the media has convinced people if the current corporations exit the mines the country will collapse.
Tightest work force in history... and the mining sector only employs 1% of the workforce... Trust me, Holden/ford/toyota leaving didn't collapse the place... losing mining wouldn't be the end of the world: It wouldn't be ideal, but it wouldn't be the end of the world. Hell, we could just sell houses to each other with ever rising credit loans to get us through /s
Tell you friend about the ore deposits in Africa that are selling well under margin, see how long he stays laughing at you.
I worked for a company that decided to invest in Africa and to end all their Australian exploration. They no longer exist. For Iron ore porduction, costs in Africa are twice as high, soveriegn risk, lack of infrastructure and development. Not to mention they don't have sufficent resources to meet demand, Africa produces barely 1/7th of our volume and litteraly can't make much more.
This is what the oil companies said when Norway was going to put their 79% royalty on them...and then Norway implemented it at 79%...and the oil companies did not leave.
It is clear that you don’t understand how it works. Norway sold their oil and put the money in a fund for growth. Australia sold its natural resources and metals and invested that money into infrastructure projects around the country. We didn’t lose or wasted any money as implied by some. Yes, we could have reinvested that money back in the stock market and other markets like the Norwegian fund did but we invested a huge some of money back into people. Norway may run out of oil soon but we won’t run out of iron and other metals anytime soon.
Lol, no way we invested all that money in infrastructure. If that was the case why are they selling off roads and making us pay tolls and privatising ports and other critical infrastructure? They are making private companies pay for it and the charge is for it.
Because the need is more than the supply. Governments invested that money into something. Whether it is infrastructure, health, education, defence or community services like aged care or childcare etc. All the toll roads are put in place by the state government so it’s the government of the day kind of thing. And it’s most visible in sydney and not so much in other metropolitan cities in Australia. I do also remember Joe Hockey or someone did start a government fund with about $100 billion I believe. I do wonder what the status of that fund is. It is always good to save money for future like Norway did but not all countries can afford that luxury. I think we have more pressing need to spend the money now on lagging infrastructure, health and education.
Hahaha nice graph
Thankyou! Glad there's still some common sense around here. Our super funds are so large, they are now distorting our account surplus (not trade surplus). If people wanna get real serious about it though... Google Australian National Welfare fund... Oh yeah, that baby was on it's way, until the boomers allowed the government to absorb that into general revenue.... Downvotes in bound no doubt.
Thank you! Norway's sovereign fund is their government-managed super, IIRC.
I understand it is funded through proceeds of extractive industries (oil) to capture benefits for citizens. Australia doesn't have any comparable method to ensure Australians actually secure a long-term benefit from things you can dig up once and never again.
If you count all employers as part of an extractive industry (labour), then that's *exactly* what Australia is doing. Anyone providing any form of permanent employment has to pony up an extra 10.5% of the employee's pay to a 'distributed wealth fund'. I'd argue that the Australian approach is better given how labour is a much better resource to bank on than oil when it comes to the purpose of making sure people who sold their labour have secure pensions.
Firstly, super is not a distributed wealth fund, assets are held for specific individual beneficiaries. Secondly, the point I was making was not to compare pension/super systems but to compare mineral resource taxation mechanisms - Norway captures a lot of the proceeds of sovereign assets while Australia captures almost nothing. And Super is not a version of this - super is calculated based on salary whereas resource rents are taxed on some combination of volumes, revenue or profits.
This gives us 2 Australias. One group of older millionaires, people who own houses in capital cities, self-funded retirees. Another group of employed people who cant get a rental, let alone have enough savings to buy a house.
Australia is a fool we give away ore, coal and gas and other minerals. Australia could be the wealthiest country in the world. Unfortunately that's not the case
We are the second wealthiest country in the world It just happens to be owned privately by its citizens. I know it annoys you that some people have dared to succeed in their own right.
🙄 pretty sure Australians own the resources not individuals or companies
About 80% of our trade balance is directly against shit we pull out of the ground. We basically don't manufacture anything post-1950s here - so... pretty much every aspect of our modern life is directly due to this primary production - so I'd say it's worked out pretty great for us.
[If only they tried it](https://www.allenovery.com/en-gb/global/news-and-insights/publications/australian-government-repeals-controversial-super-profits-mining-tax) ...
This should be Australia*
….it’s sad that Rex Connors attempt to Nationalise Australia’s mineral and energy wealth in the 1970’s was blown up by poor political strategy and outrage from the conservative media and business…private businesses still would have operated the mines and made profits but there would have been better financial returns to the country for the resources…
While no one is immune to criticism, there is a clear pattern of decisions over generations that have caused this situation. And we must do better. But any attempt to discuss it is quickly dominated by angry monkeys throwing their own excrement at each other. The contrast with aviation is crazy. Flying has become amazingly reliable due to the development of an open, necessarily honest system of investigation and culture change. We've tolerated the opposite situation in a vastly more important area of life: running our frikkin country.
We gave away our riches for peanuts, and continue to do so.
Australia is just another corporation
>This could have been *West* Australia Fixed it for you.
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PH is just insane. So much wealth yet there's basically 1 restaurant? It's extremely disappointing. I'm ok with it just being a work site, but a lot of people live there now and it can't keep getting run like this.
Port Headland could be huge if anyone wanted to live there. It's still a very remote location in an inhospitable area of the country surrounded by a lot of nothing. It could be like Vegas if Vegas was a 10 hour drive from the next city
The heck is Dahua? Da hoo ha? Or Doha
The great sovereign country of Western Australia. All the Westies will be singing a different tune when you're all out of hydrocarbons and ore
Ok, first, my comment was trying to convey that given the population and resources of Norway, it's more likely a "sovereign fund" here would not really have sustained the entire population like it does in Norway, merely perhaps WA. The other thing is "Out of hydrocarbon and ore"...really? "Out of"? 🧐
Only if we nationalised our mining industry like planned under labour
I was reading about Musk needed lots more lithium & nickel for his Tesla batteries. Australia will supply the minerals, Musk will do all the value adding & make most of the profit.
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This is a false comparison. This is comparing the extraction of a countries natural resources for the benefit of the country, rather then the benefit of the shareholders. Its about a responsible Government negotiating mineral rights that best benefits the country, rather than their lobbyists. We should be negotiating from 100% down rather then from 0% up. I mean if someone comes to you and says I can sell your (insert what ever here) for heaps and we can split the money most people say 50:50 or 70:30. The actual owner is always the one receiving the greatest benefit which scales with amount of work required by the other party.
And yet 90% of Oslo's vehicles are electric.
I don't believe this is true. They reached about 50% of NEW car sales in Norway being electric in the last year or so, maybe Oslo has higher rates of electric car sales, but highly unlikely it's 90% of the cars on the road are electric. The real stats would already be impressive, no need to exaggerate.
92% of Norway's power is sourced from hydro, 6.5% wind. Electricity is so cheap, why would you not go EV?
Not sure why EV is such a big agenda atm. No harm in running mixed propulsion until things have advanced enough and to meet one’s requirements. Not everyone has access to fast charging or power infrastructure that can fast charge. There are circumstances where there literally isn’t any grid or weight plays a pivotal role such as heavy commercial transport or aviation. Then the affordability and false financial and environmental economy of changing an already running ICE vehicle, especially if hardly used.
That's not the point. Given the statistic, Norway would have just been fine withe their oil. Still they made ways to change the system. They changed their laws to give incentives in buying EVs such as free toll, parking concessions and even changing their laws that residential and commercial structures must include EV charging stations because they get it that people would rather want to charge their cars at home or while at work. They are also shaping their cities encouraging the use of bikes and making more walkable laneways. The point is, they could have just as easily lived off their oil, but they choose to look forward and plan accordingly. And yes, Middle East is fast adopting renewables for their own use even if they are literally swimming in oil.
Bottom line. Where will government get its funding from? Our population to geographic size (hence infrastructure) makes it super expensive and actually not economical. Are you suggesting we up the tax rate for an avg. income earner to ensure the people with enough money can afford an EV? Sorry that’s bollocks on many different angles - and I love EVs. You are effectively penalising light use, lower income earners with existing vehicles.
You have the Arnault family listed, what about the Rothschild family and the Rockefeller family. They have billions.
I think it's a big disingenuous to have a family listed as one entity on a chart that does show all individual entries.
Every extractive operation in Australia should be at least 51% government owned. And none of this tax avoidance corporate structures. Don’t know why this is so hard….. Just make it simple. You extract this amount of gas/iron ore whatever you pay $x. Adjusted to global prices. And reserve gas for domestic use sold at no more than $x…. Why is this so hard?
by 51% government owned, do you mean that the australian governement will fund 51% of all new projects?
Counterpoint, government may do things less efficiently, because they are driven by politics. They may open a mine in a financially unviable area to create local jobs .
I don't think Australia ever had the same natural resources as the North sea oil. Even the UK's share was significantly smaller.
We have 20T worth of reources according to the link below. Norway doesn't even make the list of top countries of natural resources https://www.statista.com/statistics/748223/leading-countries-based-on-natural-resource-value/
That is misleading because it is not the total amount that matters, but how easy it is to obtain. It is like when people say that an asteroid has trillions of values of minerals. Sure, but we currently can't access it so it is worth shit.
Well you find a better stat then
The world isn't so simple that you can just pick a single measure and use that to see whether a country is doing well or poorly. The things that affect how natural resources will benefit a country are: * **public policy** * resource type * resource amount * resource availability * culture * technology level * skills level * capital * foreign investment * location of country * etc. (you get my point) What the poster of this topic is trying to do is act like the **only thing** that matters is public policy. As if we just taxed it more then we would have 1 trillion extra. Life is not that simple. There are 100s of other factors that can, and have affected how the resource sector works.
That seems incorrect, norway has been producing millions of barrels of oil per day for 50yrs
from wiki "In 2011, Norway was the eighth largest crude oil exporter in the world (at 78 Mt), and the 9th largest exporter of refined oil (at 86 Mt). It was also the world's third largest natural gas exporter (at 99 bcm), having significant gas reserves in the North Sea.\[2\]\[3\] Norway also possesses some of the world's largest potentially exploitable coal reserves (located under the Norwegian continental shelf) on earth.\[4\] More recently (2017), the Norwegian government has ranked 3rd worldwide as the largest exporter of natural gas, just behind Russia and Qatar. "
Yes we export less oil and more of other things.
Sure. But the value for the past fifty years of exports is much smaller. I mean I agree with the general point, but Norway did also luck out in a very major way.
> the value for the past fifty years of exports is much smaller. Source please
Dude, your tone is not particularly fun to chat with. You think Aussie has since the seventies exported a higher dollar value than Norway via natural resources. Good luck with that, provide a source yourself.
Total superannuation assets totalled $3.4 trillion. People privately owning assets is vastly better than government owning a fund. The government fund has big issues being they are in control of how it is invested and how it is spent. You may never see a dime or benefit from the government fund. You can control how your super is invested and how it is eventually spent. And yes they are comparable because Norway would have to tax people or companies to have a budget surplus to save for a government fund in there first place. Instead of taxing people to create a government fund, Australia forces people to create their own fund, which they can contribute more to. Australia wins Also Norway has one of the highest private debt to income. Instead of the government taking on debt, the citizens are. Government should be spending so citizens can save not vice versa Despite Norway having 1.5x Australia’s gdp per capita, Australians have twice the median and mean wealth per adult and wealth equality is higher in Australia too
Oil funds are good, but like from a economic perspective what are they doing with the money. Like a gov should be investing in infrastructure etc. Sure it makes it easier to get more debt. But its just cash. If its not improving life/economic output. What is the point.
https://evolution-institute.org/projects/norway/
could've been... if we hadn't had kids
You mean the National Welfare Fund? Oh wait we don't talk about that.
Yep.... No one believes we even had one. Then when you say the boomers allowed it to be absorbed into general revenue... Oh the burn, I can feel the flames already... and the down votes...
What does it do for the Norwegians?
https://evolution-institute.org/projects/norway/
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We actually have 248 billion if you add up all of our funds: https://www.futurefund.gov.au/-/media/future-fund---documents/portfolio-updates/portfolio-update-to-31-march-2022.ashx?la=en&hash=65242A8C7C39D951001A2DBC3C52C3B3D92907FB Table 11: Funds under management at 31 March 2022 Value $bn Future Fund Medical Research Future Fund ATSILS Fund Future Drought Fund Emergency Response Fund DisabilityCare Australia Fund TOTAL 201.0 22.1 2.1 4.6 4.6 14.5 = 248.9
Steve Ballmer is worth $90bn? Fark ouffffff….
What exactly do we have to show for our resource wealth apart from an inflated currency (which kills manufacturing) and a few tradies with Maloos and jet skis? It seems the Middle East gets a lot more out of their resource wealth even with their Princes pocketing a good chunk
The pedant in me is annoyed that the entire Arnault family counts as one person for the purposes of this graph.