THE Greens will put a sovereign wealth fund back on the political agenda in the new year by formally moving for the fund to be established and asking the Productivity Commission to investigate the best method for Australia.
Greens MP Adam Bandt will introduce a private member's bill when Parliament resumes to test support for a sovereign wealth fund among major party MPs. Senior Liberal Malcolm Turnbull and John Howard's former chief of staff, Senator Arthur Sinodinos, publicly indicated support this year.
Sovereign wealth funds, which are common among resource-rich countries, are a national savings fund that uses income from a boom, or in some cases surpluses, to save for the future when resources run out. Funds have been used to restrain the value of domestic currency to assist local industry dealing with a high dollar.
There are at least 36 countries that have sovereign wealth funds including Norway, several oil-rich Arab states, Chile, Korea and China.
Mr Bandt is hopeful a Labor or Coalition MP will second the bill because it will have a better chance of success.
"We are squandering a once in a lifetime opportunity to set the country up for the future," Mr Bandt said.
"We are selling off our resources without setting any aside for a rainy day or a post-mining economy."
His bill resolves that Australia establish a sovereign wealth fund and calls on the Treasurer to ask the Productivity Commission to investigate.
Mr Bandt said there were a variety of ways to run a fund so a Productivity Commission report, to be handed back no later than October 26, was needed to ascertain which method was best for Australia.
The report, Mr Bandt proposes, should detail how the fund should be established the fund's revenue and expenditure and the fund's objects and governance structures.
Former economics professor and current Labor MP Andrew Leigh said the real question was not about creating a sovereign wealth fund but what you put in it. "Anyone who favours a sovereign wealth fund has to tell us which spending programs they plan to cut or which taxes they will increase," Dr Leigh said.
Treasurer Wayne Swan has argued against a fund because Australia supports savings through superannuation.
In April, the International Monetary Fund urged Australia to establish a sovereign wealth fund to ensure the country did not waste the mining boom.
Earlier that month, Mr Turnbull backed the creation of a sovereign wealth fund, suggesting that if done correctly, a national savings fund could become a matter of real national pride.
Liberal recruit Senator Sinodinos used his maiden speech to Parliament last month to outline his support.
"When it is affordable, we should contemplate a new sovereign wealth fund modelled on those employed by Singapore and [South] Korea," he told the Senate in late November. "It could acquire stakes in individual companies to increase our exposure to the newly growing emerging markets and economies to reinforce our influence in the global economy and thereby strengthen our national security."