Replicating a Norwegian-style sovereign wealth fund to capture some of the spoils of the resources boom is not a sensible strategy, considering the differences between the two economies, a Treasury adviser has said.
"If Australia were to seek to emulate the Norwegian example, governments would need to target much higher budget surpluses than have been contemplated to date," Treasury macroecnomic policy division senior adviser Phil Garton said in a report on Friday.
"In order to save the same proportion of the increase in national income from the terms of trade as was achieved in Norway, Australian governments would have had to achieve budget surpluses averaging over 4 per cent of GDP (gross domestic product) over the past 8 years," Garton said.
Some critics have argued that the establishment of a sovereign wealth fund would help to relieve the pressures on export sectors of the economy stemming from the high Australian dollar and save some of the profits of the resources boom for future years.
But Garton said Australia captures a much smaller share of the increased national income associated with resource booms, while investment levels in the resource sector to expand capacity were also much higher than in Norway leaving less room for savings.
But Treasury did stipulate that the report reflected the view's of Garton and not necessarily those of the department itself.
