It's a story of two resource-rich countries with two very different ways of harnessing the wealth they are blessed with. By 2021 Australia will eclipse the Persian Gulf state of Qatar to become the world's biggest exporter of liquefied natural gas.
In that year, when both countries are forecast to pump and ship roughly 100 billion cubic metres of LNG each, Qatar's government will receive $26.6 billion in royalties from the multinational companies exploiting its offshore gasfields. According to Treasury estimates, Australia will receive just $800 million for the same volume of gas leaving its shores.
Qatar levels a 35 per cent tax rate on companies in the petroleum sector. On average, the Arab state receives about 23.5 per cent of the value of export revenues and is using that wealth to subsidise the diversification of its industry.
http://www.smh.com.au/federal-politics/ ... ryaoi.html
Australia has been blessed with an abundance of natural resources, so it is very worrying to see them squandered in such a way. The Australian government is putting through plenty of spending cuts at the moment, so the money is needed however the government doesn't seem enthusiastic about collecting it.
In my opinion this highlights some massive cultural differences in the way that resource rich nations preserve mineral or petrochemical wealth for future generations....or don't. In Norway, the money earned from oil/gas resources is given to one of the national sovereign wealth funds to invest around the world. This has been very successful and helps to maintain budget and currency stability. In the UAE oil wealth is also given to the nation's sovereign wealth fund, though much more of it is spend on domestic investment projects. Over the last decade or two Dubai in particular (but also Abh Dhabi and the other Emirates) has successfully used much of this money to diversify their economy. Immense construction projects around Dubai and in Emiriti companies has build an economy that isn't dependent on oil. - very wise since the oil has since run out. In Saudi Arabia the oil wealth is greater but its management leaves much to be desired. Much of it goes directly to the royal family, efforts to diversify the economy and to westernise are limited and generally unsuccessful. Not all Saudis even have access to running water. Because the government's budget is dependant on oil revenue, oil price changes can suddenly shift the books from surplus to deficit. In ultra neoliberal New Zealand the royalties charged on oil/gas is only 20% once a project is profitable with no provisions for making sure this wealth is saved for future generations.
It is relevant to point out that many of Australia's offshore natural gas facilities have been built recently and their owners need to recover the cost of construction (not cheap in middle of nowhere places like Barrow Island) however the disparity between what the Australian government earns and what the Qatari government does is nevertheless extraordinary. The only thing worse than being poor is being poor and knowing that you were once rich. Naru gives us a great example of how not to manage a national windfall. Thoughts?