A news item this week reminded me of a letter to the editor I wrote to a business magazine, it must be ten years ago now. I had just heard about the Petroleum Fund of Norway (renamed in 2006 to the Government Pension Fund Global) and I wanted a similar fund for Australia.
After all, the circumstances between Norway and Australia are remarkably similar. The only difference is the quality of the foresight of the respective parliamentary representatives.
When oil was discovered in Norwegian waters of the North Sea, the Norwegian government could see that this windfall resource would not last forever. So in 1990 they decided to divert revenue from taxes and licenses earned from the resource into a special fund for investment, so that future generations of Norwegians could benefit from the wealth. There was the additional goal of avoiding a dangerous imbalance to the Norwegian economy that might be caused by oil price fluctuations.
Today, 20 years later, that fund is estimated to be worth $570 billion. It now owns 2% of all European stocks and is currently busy diversifying into real estate and the rest of the world.
The news item I heard this week that sparked my memory was an announcement that the CSIRO, Australia’s legendary (and shockingly underfunded) scientific research organisation, is about to undertake research on…wait for it… how to extract iron from the poorer grade iron ore which is all that will soon be left now that our highest grade iron ore has been dug up and sold off.
Why are the Norwegians so smart and we aren’t? There are fewer than 5 million of them, too!
I keep telling people in my training programs and conference workshops how much there is to learn from other cultures. We should be moving our gaze from the USA to the Nordic countries of Europe. That’s where the great ideas are playing out. And they are countries much more in our social democratic tradition than the Americans who have never even held the concept of a civil society.
It’s not too late! I can see a great use for that mining profits tax which is having so much trouble getting traction. Lets build up The Australian Sovereign Wealth Fund so that the CSIRO never has to go begging, and all unversity education is free, as it was for me in the 1960′s.