Western Australia moves forward on sovereign fund plans

Barnett told the state parliament this week that details of the fund would be announced in the May budget. "The Liberal-National government is committed to ensuring future generations of West Australians have a legacy from this historic period of development, built predominantly on the significant but finite resources available to us at present," he said.

The vehicle will be comparable to the existing A$73 billion ($78 billion) Future Fund set up at national level in 2006 to help the government meet public pension liabilities. It also bears similarities to the sovereign wealth funds set up in the Middle East, which invest some of the proceeds arising from oil sales.

Western Australia ranks fourth in Australia by population but is the wealthiest state in terms of natural resources, accounting for 46% of national exports, of which 73% go to China. The mining boom has transformed the state's economy, with unemployment close to zero and billions of dollars of projects underway.

The state has already sought to leverage its mineral wealth, last year raising the royalties on a number of locally mined minerals and charging BHP Billiton and Rio Tinto a one-off fee of A$350 million in order to relax rules regarding a joint venture that was ultimately abandoned.

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• Topics
• Australasia
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