- by Anna Pha
- The Guardian
- Issue #2128
Photo: Michael Coghlan – flickr.com (CC BY-SA 2.0)
Treasurer Jim Chalmers stirred the Coalition pot when he announced changes to the Future Fund (FF) with its current nest egg of more than $230 billion. Opposition leader Peter Dutton accused him of being “political.” How dare Chalmers interfere in the work of the government’s ‘independent’ sovereign fund!
The FF webpage reads: “The Future Fund is Australia’s sovereign wealth fund. Our purpose is to invest for the benefit of future generations of Australians. Established in 2006 [by former Coalition Treasurer Peter Costello] to strengthen the Commonwealth’s long-term financial position, today the Future Fund is the country’s single-largest financial asset. As a sovereign wealth fund we manage money on behalf of the Australian Federal Government.”
Since its formation the FF has expanded, now managing 6 separate funds – the Future Fund, the Medical Research Future Fund, the Disability Care Australia Fund, the Aboriginal and Torres Strait Islander Land and Sea Future Fund, the Future Drought Fund, the Disaster Ready Fund, and the Housing Australia Future Fund.
“The new Investment Mandate will require the fund to consider Australia’s national priorities in its investment decisions, where possible, appropriate and consistent with strong returns,” says Chalmers. These national priorities are:
- Increasing the supply of residential housing in Australia.
- Supporting the energy transition as part of the net zero transformation of the Australian economy.
- Delivering improved infrastructure including economic resilience and security infrastructure.
“This will mean more investment where we need it most but not at the expense of returns,” Chalmers said.
The FF claims to “Do the right thing,” and “Focus on what matters.”
It says in its 2023-24 annual report, “As a large global asset owner with a long-term perspective, we understand … the integration of environmental, social and governance (ESG) factors into our investment decision-making … .”
“The United Nations Framework Convention on Climate Change (UNFCCC) has identified that human activities, particularly the burning of fossil fuels, deforestation, and various industrial processes, have significantly increased the concentration of greenhouse gases in the atmosphere,” the FF says in its 2023-24 annual report. (emphasis added)
It even goes as far as acknowledging such considerations as environmental protection, biodiversity, ecosystems, water, and circular economy, and waste.
HOW RIGHT?
So how does the FF “Do the right thing”?
When it comes to climate change, analysis by Michael West Media (MWM) reveals that the FF is a top 10 shareholder in three of Australia’s worst climate wreckers – Woodside Energy, Santos, and Whitehaven Coal – with a total of more than $1 billion of shares in these companies.
The FF has increased its share holdings in these three companies between December 2023 and June 2024. In addition, MWM’s analysis also reveals that the FF has failed to support a single climate-related shareholder proposal at these three companies since 2021.
Furthermore, the FF currently holds more than half a billion dollars’ worth of shares in weapons manufacturers and war-related companies.
ABC analysis shows the total market value of the fund’s shareholdings in those 30 companies rose between October 2023, and June 2024. It is not clear to what extent that was due to company profits rising or an increase in investments in those war machines.
Its investments include $1.33 million in Elbit, Israel’s largest weapons manufacturer, a rise of 172.25 per cent in the past year. The value of its holdings in the last year in BAE Systems rose 87.5 per cent alone.
The Australian government is investing $917 million in Elbit whose weapons are being used in Israel’s genocide of Palestinians, and attacks on Lebanon and other countries.
MWM questions whether the FF is putting Australia’s sovereign wealth fund at legal risk of contributing to genocide.
When Chalmers includes Australia’s “security” as part of the infrastructure mandate, what does he mean? Is it further investments in the military industrial complex?
The FF should immediately withdraw investments from fossil fuel and military industries. They are not doing “the right thing” by humanity.
In June this year Greg Combet was appointed chairman of the Future Fund Board of Trustees. Prior to this he served as chair of the Australian Government Net Zero Economy Agency, overseeing the economic transformation from fossil fuels to renewable energy and net zero emissions. He is a former secretary of the ACTU, and has previously held the positions of Parliamentary Secretary for Defence Procurement and Minister for Climate Change in Labor governments.
Watch this space, as they say, to see which way he takes the board: fossil fuel and military investments or a just transition to renewables and socially responsible investments.
Future Fund military investments:
- Airbus SE
- BAE Systems
- Boeing Co
- Elbit Systems
- General Dynamics
- Honeywell International
- Lockheed Martin
- Northrop Grumman Corp
A number of these corporations produce nuclear weapons.
Source ABC
