I am not sure that comparing only sovereign wealth funds per capita tells the whole story. For instance Australia has a lot more private wealth saved up than Norway. At a lower GINI coefficient as well! I am also not sure that the major resource exports like iron ore and coal have the same ability to extract cartel rent extraction of oil, which is a lot more concentrated in the world.
https://en.wikipedia.org/wiki/List_of_countries_by_wealth_pe...
Wealth per capita $USD 2021:
Country Median Mean
Australia 238k 484k
Norway 118k 276k
The Australian compulsory super-annuation scheme has made Australian long term pension sustainability much better than the rest of the world. How much of the wealth that could have gone into a sovereign fund has gone into private savings instead? I don't know if Norway or Australia did better.
Is doing well be a bar against doing better? The wealthy have no hangups about taking profit so why should the rest of us?
Mining activity is 10% of Australia's GDP. Mineral land rights in Australia are property of the government so why do overseas and private-domestic operators get to make all the profit? When Norway's example shows us that a publicly funded and owned industry was possible!
- Fees are 20x larger as a proportion of AUM ($30 billion a year, nearly as much as the military budget, and 2x what the country spends on electricity)
- The assets are overwhelmingly owned by people who are already rich (Norway's SWF shares the wealth equally)
- Super has totally failed to prevent retirement poverty (elderly single women are the most impoverished demographic in Australia).
Norway has a 1.4 trillion dollars in oil wealth. In Australia individuals save for their own retirement. Comparing these two retirement funding mechanisms on the basis of how much individuals benefit and transaction cost per AUM isn't sensible.
Obviously being given free oil money is better than needing to save.
I don't understand your point at all. Both are very similar pools of assets. Why is it inappropriate to compare management costs and distributional outcomes between the two?
> I don't understand your point at all. Both are very similar pools of assets.
OK, let me explain it. Yes, the assets owned by both funds are financial assets that are comparable. They both own bonds and corporate shares, etc. But the issue is not what assets are in the funds.
When you are given lots of money, this reduces poverty much more than when an individual gets a tax break on saving their own money. Norway has trillions in oil reserves to support a small population. I am not sure why I need to explain this, but having a trillion dollar windfall reduces poverty much more effectively than subsidizing the savings of each individual.
Moreover, when you save each pay period you have to make lots of small little asset purchases, as opposed to making huge purchases in a SWF fund in which the money comes from selling oil, so transaction costs are higher in a 401K style system than when you are sitting on an ocean of free oil.
> When you are given lots of money, this reduces poverty much more than when an individual gets a tax break on saving their own money.
That is what I am saying - If the $3 trillion in super were shared equally, poverty would be a lot lower. Keating himself says that he could have set the system up this way, but didn't because he wanted it to be a privatized system of individual ownership.
> Norway has trillions in oil reserves to support a small population.
Norway has $1 trillion in retirement savings to support a small population. Australia has $3 trillion in retirement savings to support a small population. What's the difference? Why does what asset class the money originally came from matter?
> I am not sure why I need to explain this, but having a trillion dollar windfall reduces poverty much more effectively than subsidizing the savings of each individual.
Once again, both countries have trillions in assets, that can be distributed in many possible ways. You can either distribute them equally and reduce inequality (Norway), or individually and make it worse (Australia).
> Moreover, when you save each pay period you have to make lots of small little asset purchases, as opposed to making huge purchases in a SWF fund in which the money comes from selling oil, so transaction costs are higher in a 401K style system than when you are sitting on an ocean of free oil.
That is not how super funds work (they don't make small asset purchases each time you make a deposit, they run a combined asset pool and just keep track of your allocation) and not why super fees are high. They are high because there are so many small funds which spend money advertising against each other and duplicating admin costs, instead of simply having one big fund like Norway does.
Australia has an even bigger tragedy in this area: The superannuation system, which could have been a sovereign wealth fund 3x the size of Norway's, but instead was set up as individual accounts that privatize wealth instead of make it public, and amplify inequality instead of reduce it.
I think it's meant to convey grief that Australia has allowed itself to be exploited by foreign miners, and waste the wealth that its natural resources could have generated.
Australia like Britain, did not use Oil royalties to establish abiding sovereign funds to persist after the oil ran out. Instead, the royalty stream has been used to draw down debt, and to replace taxation as an income stream in the present, but oftentimes has led to wasted spend on vanity projects, or on build out of infrastructure purely for extractive industry (mining, oil, gas) which in turn is hoped to generate revenue, but alas, not until a very long time in the future. Displaced costs in forward income estimates, much as in the movie industry, mean some mines and oilwells basically never pay tax, but generate collossal revenue which disappears into company consolidated debt. Its a huge rort of the model. There are royalties, but they are 'subverted' out of the picture.
"its scotland's oil" was about Maggie Thatcher, and how the revenue was spent. Now scotland has independent tax raising powers, the border with england for sea resources was carefully restruck to favour england (look on a map to the boundaries, they aren't what you might think)
Australia has soverign wealth funds. Just, not made with revenue from this kind of industry. This kind of industry dominates the political landscape and has impeded the uptake of solar and wind, and replacement of coal for power generation. I don't mean silently: this is a quite overt distortion, active, such that major corporates actually have withdrawn from the australian mining and minerals council because its like the NRA, single-issue distorting of the polity.
In the early 2000s an Australian labor government tried to raise a tax analogous to a petrol royalties and revenue tax, and was pretty much de-elected by sectional interests on the strength of industry opposition. (the PRRT exists. the MRRT was voted down)
Mining employs around 40,000 people in a nation of 25 million. Solar and Wind and Tourism would probably employ more people. But, the voting effects of mining establish a lock on our senate (and sometimes, lower house) which make it next to impossible to see change. The industry is running the government, at one remove.
I don't believe for a minute Norway is all peaches and cream, but it probably has a better sense of cohesion around its role in the world, and the benefits of the sovereign fund, and future money, and de-carbonising the economy. Norway was an extremely poor, -to the extent of massive nutritional death in winter-poor economy. It's moved the dial to a different place, and done it quite carefully, economically speaking. (Norwegian settlers in the USA and Canada came because of a potato famine)
We're envious. (well, the Australians who don't derive income directly from mining, oil or gas)
> Now scotland has independent tax raising powers, the border with england for sea resources was carefully restruck to favour england
The maritime border used to be a straight east-west line despite the east coast of England being curved. In 1999 it was changed so that it followed established international maritime border conventions regarding distances from the mainland[0].
You believe the change was motivated purely by geographical norms? It was legal on geographical grounds but was obviously motivated on assets and revenue.
I don't believe anything without evidence. It seems like a reasonable piece of tidying up that settles the legal juristiction of vessels in those waters but I look forward to seeing the evidence that it was a spiteful landgrab (watergrab?) so I can adjust my beliefs.
On balance, the maritime border appears to me to have been restruck to be fair.
Here's closing remarks from the SNP on a parliamentary debate, that shows the predominant driving factor was fisheries, and (if you read the rest of the debate) suggests a lot of confusion about what was being discussed and why): https://www.theyworkforyou.com/sp/?id=2000-04-26.9.0#g58.1
What are you talking about? Australia hasn't had a recession in decades. Australia has done well with all the resources it stole from the aborigines. Most people living in australia has never experienced an economic downturn.
While you're absolutely correct that Australia hasn't had a recession in that time, this hides the fact that there have been periods when GDP _per-capita_ has declined. Or to put it another way: Australia's recessions have been hidden by immigration-driven growth.
Of course, immigration-driven growth is great! But for people on the ground, what matters is GDP per capita, not total GDP.
Australia hasn't had a recession since the early 90s and you are complaining?
The point that was being attempted was this: Yes, Australia has done well. But it could have done much better if it didn't squander its mineral wealth and hadn't removed an actually-beneficial-to-society mining tax.
Just look at Norway as the example of how much better we could have done.
In turn, we wouldn't be lumbered with egregious mining billionaires like Clive Palmer and Gina Rinehart, who - among other monstrosities - heavily back climate-disruption denial.