The national Future Fund’s decision to divest its $222 million tobacco investments exposes the Liberal Party and Tasmania’s Upper House over tobacco funds, says Tom Baxter, UTAS corporate governance lecturer and Greens Legislative Council candidate for Nelson.
The Future Fund’s chairman, David Gonski, yesterday announced that the fund would exclude $222 million worth of tobacco investment from its portfolio.
The National Heart Foundation then urged all governments to ensure no public funds are invested in tobacco companies. This is already policy in New South Wales, South Australia and the ACT.
The Tasmanian Greens will move in Parliament for the Retirement Benefits Fund (RBF) to also drop its $27 million investment of public sector super in tobacco companies.
“I challenge the state Liberals and all Upper House candidates to support the Greens’ move, as I will if elected,” said Mr Baxter, an RBF member.
“That will make clear Parliament’s support for socially responsible investment of public sector super, providing clear guidance for the RBA board.
“In divesting its $222 million tobacco portfolio, the Future Fund is following good governance practices. So should the RBF divest the $27 million it has in overseas tobacco companies.
“We should stop supporting killer companies with public funds, as urged by the National Heart Foundation and to catch up with other states.
“So all political parties and MLCs should support the Greens’ move, but will they?” Mr Baxter said.
Three weeks ago, Liberal MP Matthew Groom tried to justify his party’s sole acceptance of tobacco company donations by pointing to RBF tobacco investments. These include British American Tobacco, Imperial Tobacco, Japan Tobacco, Philip Morris and the Swedish Match Company, according to a document released under Right to Information laws.
“The Liberal Party should stop taking tobacco donations,” Mr Baxter said.
“It’s blood money with a cancerous effect on public health.
“If the Liberals remain addicted to tobacco donations, then the Upper House should pass legislation it rejected last year to prevent this. Establishing such a level political playing field is the only sure way to prevent big tobacco buying influence.”
In his announcement yesterday the Future Fund’s chairman, David Gonski, pointed to the insidious effects of tobacco:
“The board noted tobacco’s very particular characteristics including its damaging health effects, addictive properties and that there is no safe level of consumption,” Mr Gonski said in a statement.
“In doing so the board also considered its investment policies and approach to environmental, social and governance issues.”
“ESG issues are a crucial component of modern corporate governance,” Mr Baxter said. “All the more so for a public sector fund such as the RBF.”
Australia is a signatory to the World Health Organisation Framework Convention on Tobacco Control, which recommends governments have no financial interest in tobacco.
Disclosure: Mr Baxter has a small amount of superannuation with the RBF from his time serving as a board member of the Guardianship and Administration Board.
David Gonski, Future Fund excludes tobacco producers (PDF 45.3 KB) 28 February 2013: www.futurefund.gov.au.
Maurice Swanson, Heart Foundation tobacco control spokesperson, Heart Foundation ‘extremely pleased’ to see end to Future Fund tobacco investments 28 February 2013.