Last weekend, Bill Shorten (Assistant to the Treasurer) stated that he does not support the creation of a Sovereign health Fund for Australia.
Firstly I searched on Wikipedia to come up with a definition of a Sovereign Wealth Fund and here is the result:
“A sovereign wealth fund (SWF) is a state-owned investment fund composed of financial assets such as stocks, bonds, property, precious metals or other financial instruments. There are two types of funds: saving funds and stabilization funds. Stabilization
SWFs are created to reduce the volatility of government revenues, to counter the boom-bust cycles' adverse effect on government spending and the national economy. Savings SWFs build up savings for future generations.”
Australia is currently enjoying is highest level of national income for decades courtesy of the mining boom. Some in the Reserve Bank and many leading business people are calling for Australia to establish a Sovereign Wealth Fund to save some of the money that the country is making from its resources boom while commodity prices are high and put it aside for the time when the commodity boom subsides.
Put simply the idea of a Sovereign Wealth Fund is putting money aside for a rainy day as the old cliché goes. Instead it seems that the current Government wants to spend additional revenue earned during the boom times and assume that the commodities boom and current income will last forever. I fear that when the resources boom subsides, that Australia will have little to show for it.
What is even more disturbing is that Bill Shorten was quoted as saying that he didn’t think Australia needed a Sovereign Wealth Fund as we already have one in the form of Superannuation. With all due respect, Bill’s statement here is rubbish. Last time I looked at my superannuation statement I didn’t see any reference to my savings being used to reduce the volatility of government revenue.
While clearly criticising the ALP’s view on a Sovereign Wealth Fund here, it must be remembered that I also publicly criticised the Coalition’s stance on Banking policy last year. The purpose of this article is to encourage Australian’s to support a sensible and
informed debate on important issues such as the establishment of a Sovereign Wealth Fund rather than tolerate the daily rhetoric of trash that is currently coming from Canberra.
The views in this article are my own personal opinions, produced for the interests of the future well being of Australia and do not reflect the views of the dealer group.