Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I move:

That the Senate:

(a) notes that:

(i) the current resources boom is generating enormous wealth from which all Australians should reap the benefits,

(ii) a sovereign wealth fund could help fund the needs of future generations, as well as seeking to improve budget measures in the immediate budget cycle,

(iii) approximately 36 countries have sovereign wealth funds which currently manage more than $4.2 trillion worth of assets globally, and

(iv) a recent statement by the International Monetary Fund called on Australia to establish a sovereign wealth fund to protect the economy from shock falls in commodity prices and 'save revenue to ensure a more equal distribution of its benefits across generations and reduce long-term fiscal vulnerabilities from an ageing population and rising health care costs';

(b) orders that there be laid on the table, no later than 20 September 2011, a report by the Productivity Commission on the development of a sovereign wealth fund for Australia; and

(c) requests that the Productivity Commission in preparing its report consider options for the establishment of a sovereign wealth fund in Australia, including:

(i) regulatory framework,

(ii) how funds are invested and managed,

(iii) funding mechanisms,

(iv) transparency and accountability,

(v) governance structure,

(vi) how capital and returns should be utilised, and

(vii) any other related matters.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Mr Deputy President, I seek leave to make a brief statement.

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Leave is granted for two minutes.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I thank the Senate. The coalition will not be supporting this motion, for two reasons. Firstly, the time to set up a sovereign wealth fund is when the budget is in surplus and at least government net debt has been paid off. That is exactly what the Howard government did—what John Howard and Peter Costello did—back in 2006. They paid off $96 billion worth of Labor debt. Then, after delivering successive surpluses, they set up the Future Fund. The Future Fund was exactly that—a sovereign wealth fund. It is true to say that this government has been blessed with the best terms of trade in 140 years. The budget should be in surplus. The budget should be in a much stronger position. Instead we are looking at $107 billion of government net debt—and the government has asked the parliament to raise the debt ceiling by another $50 billion to $250 billion. We are looking at the second highest deficit this financial year. So, unless the Greens are suggesting that the government should borrow in order to invest in a sovereign wealth fund, this is really not the time to go down that path. That would be Greenonomics rather than economics, if we went down that path.

Secondly, there are some unresolved issues about the Senate's authority to order the Productivity Commission to deliver certain reports. In November last year, the Senate passed an order requiring the Productivity Commission to deliver a report on the anticompetitive, closed shop arrangements that are currently in place in relation to the selection of default superannuation funds under modern awards; we were seeking to implement Labor Party policy. The Senate ordered the Productivity Commission to deliver a report, with a more open, transparent and competitive process recommended around the selection of default superannuation funds on the modern awards which has still not been delivered— (Time expired)

Question put:

That the motion (Senator Brown's) be agreed to.

The Senate divided. [16:18]

(The Deputy President: Senator Ferguson)

Question negatived.