On Sovereign Risk

Various recent comments to the effect that putative changes mooted concerning Australia’s current mix of revenue arrangements with respect to the Mining sector grossly threaten its Sovereign Risk standing strike me as hyperbolic and potentially misinformed. Over at least the past couple of centuries, Australian governments have had access to a remarkable pool of economic advice precisely calibrated to minimise investment uncertainty. This advice has generally been heeded by successive governments of disparate political complexion which, combined with other factors conducive to civil tranquility (take Australia’s consistently high ranking in the UN’s Human Development Index, for instance) have left it in a position whereby relative complacency on the question of Sovereign Risk therein seems prudent.

Mutatis mutandis, Australia isn’t entirely immune from Sovereign Risk concerns. Given that the above conditions of relatively high civil tranquility with governments being amenable to sage counsel while keeping an eye on constraints of commonsense emerged under its current system of government, it would seem that proposals to alter said system of government ought partly be assessed on whether such proposal/s are conducive to maintaining that enviable cocktail of conditions described above.

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1 Comment

Filed under Economics, Political, Rudd

One response to “On Sovereign Risk

  1. Mind you, though, I’m not too keen on the proposed “RSPT” as on presently conceived terms it seems to inordinately exacerbate the cyclicality of revenue-collection.

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