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Tuesday, 28 February 2012
Page: 2157

Mr HUSIC (ChifleyGovernment Whip) (16:20): The member for Aston is normally rather mild and reserved, but the member for Mayo has him all riled up and he has decided that he is going to go out there with both fists swinging on this idea. Amazingly, I think we will find that a number of us have views about whether a sovereign wealth fund should be should be established. I am always happy to examine ideas but in moving down that path I also want to make sure that, particularly where we have to make choices over government spending and where we best direct that spending, we are using funds in the best possible way and seeing whether there are alternatives.

Certainly the whole notion of a sovereign wealth fund, to put it into context, has come about as a result of where we are at with the mining boom and people being concerned, and obviously we are just as concerned within government, that once you extract those minerals that is it. They can be extracted only once and exported only once, and the value generated can occur only once. From our perspective, I can certainly understand conceptually that we would want to maximise that benefit for the country not just for now but into the future, as well as looking at what might be done to ease some of the economic impacts felt elsewhere as a result of the mining boom.

A sovereign wealth fund is not a new concept. It has been around since the 1950s, and there are a variety of different funds that exist in terms of the scope or the way in which they were established. They are either stabilisation funds, savings funds or development funds. People have pointed to the Future Fund. I understood that the purpose of the Future Fund was largely in relation to ensuring that the Commonwealth could meet its liabilities with respect to superannuation for Commonwealth public servants. The Future Fund was never set up in a way to deal with the scope that the member for Melbourne has highlighted, which is to help ensure that we maximise the benefits of the mining boom or to ameliorate some of the impacts of the mining boom on the economy.

From my perspective, we have a form of sovereign wealth fund in place right now. If conceptually people are concerned about maximising the value of the resources boom to the Australian economy, we have taken a step this year, which was opposed bitterly by the coalition—that is, to put in place the minerals resource rent tax. Look at the money that will be gained and what we are looking to do with it. For example, through the revenue generated through the MRRT we are looking to boost superannuation funds. We are looking to ensure that we can propel future investment by adding to the national pool of savings through what we are doing with the MRRT flowing through to superannuation. It is not us as a government necessarily picking and choosing what shares we will expend government revenue on, rather the superannuation funds themselves will do that on behalf of their members. That is what we are seeking to do. We are seeking to ensure, for example, that small business will benefit through what we are doing with the MRRT by ensuring that they are able to write off assets to the value of $6½ thousand, and by helping them we will ensure that we can boost employment prospects for the economic health of those small businesses, 96 per cent of which I understand form the backbone of Australian business today. My particular concern, and this has also been expressed rather forcefully by the member for Mayo and backed up by the member for Aston, is that if we are looking in terms, for example, of stabilising the currency for economic purposes with a concern for what that will do to manufacturing—and I have spoken in this place and elsewhere of my concerns about that—the amount of money required would be huge. We have heard the member for Aston highlight that $4 trillion is traded in the Australian dollar on any given day. It would be of very serious concern, then, if we were to say that we would defer decisions on education, health and other infrastructure because we wanted to put that money into a sovereign wealth fund.

I do not doubt that, from his perspective, the member for Melbourne is motivated by economic concerns about this matter. But if we are to make choices about how we spend this money we do need to think carefully about how we do it and whether or not the money that we invest reaches the intended objective.