The group of economic experts recommend setting up two oil funds to keep the money flowing when revenues fall.
At the heart of their report is a long-term fund into which oil and gas revenues are paid.
The idea is that, as North Sea reserves are finite, they should be used to build up a permanent cash legacy for future generations.
Over the years an investment portfolio would be created, which in itself would generate income.
Other countries have such funds. In Norway it is based on oil; in Chile on copper.
The Fiscal Commission Working Group’s idea is a short-term “stabilisation fund” to buffer the Scottish budget from year-on-year fluctuations in oil and gas revenues.
A proportion of tax receipts would be siphoned off into the fund when returns were good and withdrawn when payments were low to cover government income.
The report warns about the need to monitor spending in the early years.
“The establishment of a stabilisation fund requires a commitment to limit the potential level of current consumption, in favour of accumulating a stock of liquid assets.
“This can be particularly challenging in periods where the public finances are subject to other pressures.
“Likewise, the creation of a savings fund necessarily implies a prolonged commitment to limit current consumption in favour of investment.”
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