Public Mining and Gas for National Wealth and Fiscal Sovereignty Act
Open for ReviewExecutive Summary
The Resource Wealth Paradox
Australia is extraordinarily resource-rich yet lacks mechanisms to convert finite resource extraction into permanent national wealth.
Current System Problems:
- Privatized Extraction: Resource wealth flows primarily to private shareholders, often offshore
- No Sovereign Wealth Fund: Unlike Norway, Australia has no mechanism to convert resource revenue into permanent wealth
- Boom-Bust Cycles: Resource revenue volatility creates fiscal instability without buffer mechanisms
- Infrastructure Funding Gap: Resource profits don't reliably fund nation-building infrastructure
- Fiscal Dependency: Reliance on immigration-driven GDP growth and corporate taxation to fund public services
Public Ownership + Market Competition Framework
Strategic minerals and gas reserves remain publicly owned, while leveraging competitive tendering and private enterprise to maximize efficiency, revenue, and long-term national wealth.
Core Model:
- Public Ownership: Strategic resources (lithium, gas, critical minerals) remain state-owned assets
- Competitive Tendering: Private firms bid for time-limited extraction contracts
- Market Efficiency: Multiple firms operate in different regions/sectors, preserving competition
- Revenue Split: Proceeds allocated to public spending + Sovereign Wealth Fund + regional development
- Complete Transparency: All contracts, bids, revenues published on public dashboard
This is pro-competition, anti-corruption, wealth-building infrastructure.
Not Nationalization. Not Privatization.
Traditional Debate:
- ❌ Full Nationalization = State monopoly, inefficiency, corruption risk
- ❌ Full Privatization = Wealth extraction, no permanent national benefit
This Framework:
- ✅ Public ownership (wealth stays in Australia)
- ✅ Private operation (competitive efficiency)
- ✅ Market-based pricing (no state monopoly distortion)
- ✅ Transparent governance (prevents corruption)
- ✅ Sovereign Wealth Fund (permanent intergenerational wealth)
Framework Components
1. Public Ownership Model
Strategic Resources Remain State-Owned:
- Critical minerals (lithium, cobalt, rare earths)
- Natural gas reserves
- Strategic extraction sites
State Role: Asset owner and regulator, NOT operator
Private Sector Role: Extraction, refining, distribution through competitive contracts
Key Principle: Public ownership does not replace private enterprise—it ensures wealth retention while preserving market competition.
2. Competitive Tendering System
Extraction Rights:
- Auctioned through transparent, competitive bidding
- Time-limited contracts (e.g., 10-20 years)
- Periodic re-tendering to maintain competition
- Multiple firms operating in different regions/sectors
Market-Based Sales:
- Resources sold at market prices (no state monopoly pricing)
- Competitive tenders ensure efficiency and price discovery
- Private firms rewarded for efficiency and innovation
This preserves market dynamics while capturing public value.
3. Revenue Allocation Framework
Three-Way Split:
A. Public Spending Fund (40-50%)
- National infrastructure (water, energy, transport)
- Healthcare capacity expansion
- Education and skills development
- Counter-cyclical buffer during downturns
B. Sovereign Wealth Fund (40-50%)
- Globally diversified investments (Norway model)
- Long-term wealth preservation
- Intergenerational asset building
- Fiscal stabilization during commodity price volatility
C. Regional Development Fund (5-10%)
- Communities affected by extraction operations
- Local infrastructure and services
- Economic transition support
- Environmental remediation
Exact percentages determined by legislation, reviewed periodically.
4. Transparency and Governance
Real-Time Public Dashboard:
- All extraction contracts published
- Competitive bidding results visible
- Revenue flows tracked publicly
- Fund allocations disclosed
- Environmental compliance data
Independent Audits:
- Third-party auditors review operations
- Fund allocation verification
- Compliance monitoring
- Annual public reporting
Regulatory Oversight:
- Statutory body ensures competition compliance
- Environmental standards enforcement
- Financial integrity verification
- Anti-corruption mechanisms
Citizen Engagement:
- Advisory boards with community representation
- Digital platforms for participatory oversight
- Public comment periods on major contracts
5. Avoiding the Resource Curse
Transparency First: Real-time reporting prevents corruption and rent-seeking behavior
Sterilization Mechanism: Fixed percentage to SWF prevents "Dutch Disease" (resource revenue inflating currency and harming other industries)
Counter-Cyclical Buffer: SWF smooths public spending against commodity price volatility
Diversification Mandate: SWF invests globally, reducing domestic over-reliance on resource sectors
Competitive Operations: Private sector tendering ensures efficiency, preventing state monopoly bloat
6. Sovereign Wealth Fund Structure
Investment Mandate:
- Global diversification (Norway Future Fund model)
- Ethical investment guidelines
- Long-term return focus (30+ year horizon)
- Risk-adjusted portfolio management
Withdrawal Rules:
- Maximum annual withdrawal limit (e.g., 4% of fund value)
- Only during verified fiscal emergencies or infrastructure needs
- Parliamentary approval required for non-routine withdrawals
- Replenishment obligation after emergency draws
Governance:
- Independent board (cross-party appointments)
- Professional fund management
- Quarterly performance reporting
- Annual public accountability hearings
Economic and Fiscal Implications
Fiscal Sovereignty
Predictable revenue flows reduce dependence on:
- Immigration-driven GDP growth for tax base
- Corporate taxation volatility
- Debt-financed infrastructure
Resource wealth directly funds public investment and builds permanent national assets.
Market Efficiency Preserved
Competitive tendering ensures:
- Private sector innovation and efficiency
- Multiple firms competing
- Market-based pricing
- No state monopoly distortions
Private enterprise benefits through contract opportunities, employment, industry growth.
Intergenerational Wealth
Sovereign Wealth Fund converts finite resources into permanent wealth:
- Norway's fund: $1.4 trillion from North Sea oil
- Australia potential: Significant given resource endowment
- Fiscal resilience during economic downturns
- Future generations inherit wealth, not just debt
Regional Development
Extraction communities receive direct benefits:
- Infrastructure investment
- Economic diversification support
- Environmental remediation funding
- Transition assistance when operations end
Pilot Implementation and Scaling
Phase 1: Pathfinder Project - Critical Minerals
Strategic Focus: Lithium, cobalt, rare earths (high value, national security relevance)
Pilot Objectives:
- Test competitive tendering framework
- Establish transparency dashboard
- Validate revenue allocation mechanisms
- Build initial SWF corpus
- Demonstrate proof-of-concept
Timeline: 2-3 years to operational maturity
Phase 2: Regional Gas Operations
Expand to natural gas reserves in select regions
Test model at larger scale with established commodity
Evaluate revenue stability and fund performance
Phase 3: National Scaling
After pilot validation:
- Expand to additional strategic minerals
- Scale competitive tendering nationally
- Grow SWF to material size
- Evaluate public trust and economic benefits
Data-Driven Monitoring
Track:
- Extraction efficiency vs private-only baseline
- Revenue capture vs current royalty system
- Environmental impact metrics
- SWF growth and returns
- Regional economic benefits
- Public trust indicators
Adjust framework based on evidence and outcomes.
Legal and Constitutional Considerations
Constitutional Basis
Section 51(xx): Corporations power (regulating resource corporations)
Section 51(i): Trade and commerce power (resource export regulation)
Section 51(xxxix): Incidental power (SWF management)
Section 61: Executive power (asset ownership and management)
State cooperation: Minerals primarily state jurisdiction, requires cooperative federalism framework
Competition Law Compliance
Competitive, transparent contracting ensures:
- No undue restriction on private enterprise
- Multiple firms can participate
- Market-based pricing preserved
- ACCC oversight of competitive processes
International Trade Obligations
Framework maintains compliance with:
- WTO commitments (transparent, non-discriminatory tendering)
- Free trade agreements (market access preserved)
- Investment treaties (fair treatment of foreign investors)
Public ownership of subsoil resources is standard globally and trade-compliant.
Anti-Corruption Safeguards
Statutory mechanisms prevent:
- Political interference in contract awards
- Bureaucratic capture by industry
- Rent-seeking behavior
- Opaque revenue diversion
Independent oversight, transparent processes, criminal penalties for violations.
Expert Review Needed
This framework requires review from multiple perspectives:
Constitutional Lawyers:
- Verify Commonwealth/State jurisdiction issues
- Assess cooperative federalism mechanisms
- Review acquisition of property provisions
- Evaluate regulatory power scope
Economists:
- Model revenue projections and SWF growth
- Assess Dutch Disease prevention mechanisms
- Evaluate competitive tendering efficiency
- Review optimal revenue allocation splits
Resource Industry Experts:
- Assess operational feasibility
- Evaluate contract term appropriateness
- Review technical extraction considerations
- Identify unintended market consequences
Governance Specialists:
- Review anti-corruption mechanisms
- Assess transparency framework adequacy
- Evaluate citizen engagement design
- Identify capture prevention gaps
Environmental Groups:
- Review environmental safeguards
- Assess remediation funding adequacy
- Evaluate sustainability requirements
- Identify ecological protection gaps
All Australians:
- Should our resources build permanent wealth or just generate temporary revenue?
- Is competitive private operation compatible with public ownership?
- What transparency level is appropriate?
- How should revenue be split between spending and saving?
How to Contribute
💬 Discuss on GitHub (Recommended)
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- Comment on specific provisions
- Identify implementation challenges
- Suggest improvements
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Email: resources@openpolicyaustralia.org
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International Precedents
Norway - Government Pension Fund Global
Model: State ownership of North Sea oil + private operation + massive SWF
Results: $1.4 trillion fund, world's largest SWF, fiscal stability, intergenerational wealth
Key Lesson: Public ownership + market efficiency + transparent governance = sustainable wealth
Saudi Arabia - Aramco Model Evolution
Historical: Full state ownership and operation
Modern: Partial privatization with state majority ownership
Lesson: Hybrid models can work, but Norway's full public ownership + competitive private operation shows stronger public wealth capture
Alaska - Permanent Fund
Model: Oil revenue allocated to investment fund, annual dividend to citizens
Results: $80+ billion fund, direct citizen benefits
Lesson: Resource wealth can be distributed directly or invested for growth—framework supports both approaches
Botswana - Diamond Revenue Management
Model: Joint venture with De Beers, transparent revenue management
Results: Transformed from poorest to middle-income country, avoided resource curse
Lesson: Transparency and institutional quality matter more than ownership structure alone
Why This Framework Matters
For Fiscal Independence
Resource revenue creates alternative to relying on immigration-driven GDP growth or excessive corporate taxation. Nation-building can be funded from national wealth, not debt.
For Future Generations
Finite resources converted to permanent wealth. Our children inherit a sovereign wealth fund, not just extracted holes in the ground.
For Economic Resilience
Sovereign Wealth Fund provides buffer against economic downturns, commodity price volatility, and fiscal shocks. Counter-cyclical capacity strengthens national stability.
For Market Efficiency
Competitive tendering preserves private sector innovation and efficiency. Public ownership doesn't mean state monopoly—it means wealth retention while maintaining market dynamics.
Public Domain Resource Management Framework
This framework is freely available for use by any political party, policy organization, or government.
The goal is converting finite resources into permanent national wealth while preserving competitive markets.
Use, modify, improve. Credit optional. Results matter.