IMF urges Aust not to waste boom
BOTH the International Monetary Fund (IMF) and the Greens have pushed for the mining boom's windfall to government income to be saved for future generations and to protect the country from fiscal woes.
The IMF's Asia and Pacific Regional Economic Outlook report recommends that Australia should make more long term use of the benefits of higher commodity prices.
"For economies benefiting from higher commodity prices, such as Australia and New Zealand, some of the boost to government revenues could be saved in order to ensure a more equal distribution of its benefits across generations and reduce long-term fiscal vulnerabilities from an aging population and rising health care costs," the report said.
The report also warns that advanced Asian economies would need to consolidate their incomes and spending in order to "respond effectively to future shocks."
The Greens are calling the IMF's report an endorsement of their policies.
"Whilst governments are intent on spending the spoils, the Greens will continue to pursue it in the coming year in Parliament," Acting Greens Leader Christine Milne said today, referring to their call for a sovereign wealth fund.
"A sovereign fund is the gift that keeps on giving, allowing Australia to begin vital nation-building. John Howard and Peter Costello squandered the 'rivers of gold' and 'manna from heaven' in the mid-2000s with tax cuts in spite of the need to oil-proof and climate-proof the nation.
"If Australia is to build vital national infrastructure, such as high-speed rail between its capital cities and fast, efficient light rail within all its cities, this is a heaven-sent opportunity," Senator Milne said.
The Australian also reports that documents gained through Freedom of Information laws suggest that both the Treasury and Reserve Bank are also considering the establishment of a sovereign wealth fund.