A good national prosperity strategy won’t just replace one industry with another; it will restore confidence across middle Australia along the way
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Norway, where both of my daughters were born, was not an exceptionally prosperous nation before 1969. That changed when they struck oil in the North Sea that year. In Norway, each child is now born with a national inheritance that individually runs into the hundreds of thousands of dollars, and collectively now stands at over US$2tn dollars. This is thanks to a far-sighted government decision to establish a sovereign wealth fund (colloquially known as “the oil fund”) that now controls the equivalent of 1.5% of all shares in the world’s listed companies.
Norway turned luck into an investment strategy. Australia – as Donald Horne would perhaps have said – relied on simply being the “lucky country”. Or perhaps more accurately, as the British economist Richard Auty has put it, we have succumbed to what he calls “the resource curse”, meaning we allowed the resource industry to crowd out others, becoming too reliant on it along the way.