Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Deregulation, Senator Wong. It was reported in March this year that amongst its portfolio of investments the Future Fund held sizeable stakes in several tobacco companies. These investments included $46 million in British American Tobacco, $36 million in Philip Morris International and holdings in several other companies. Can the minister advise whether this is still the case and the current size of the Future Fund's investment in the tobacco industry?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I think the senator is referring to some figures which were released earlier this year by the Future Fund. It is probably useful to preface the answer to that question with a brief recognition of the relationship between the government and the fund. The fund is independent. The government has provided the Board of Guardians of the fund with an investment mandate, but the fund is provided under the legislation and as a matter of practice with autonomy in relation to its choice of investments.

The public policy reason for that is clearly this: we do not think it is a sensible proposition—and this is, I think, a bipartisan position—for politicians to be directing investments or the investment strategy of an entity such as the Future Fund. I recognise that at times that causes some concern, and some issues have been raised publicly, but I think the bigger and more important public policy objective is to ensure there is an appropriate independence and arms-length relationship between the government and the Board of Guardians, which is charged with managing the investment.

I think the figures to which you refer were released under FOI by the Future Fund. I do not have up-to-date information on where investments are at any one time. In fact, that would change quite regularly in accordance with the investment decisions made by the fund from day to day, week to week or month to month. So holdings in any particular area may change.

Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

Mr President, I have a further question. In May this year the Future Fund dumped its holdings in several companies involved in the manufacture of cluster munitions. At that time a spokesperson for the fund said that they would monitor the portfolio and assess whether further exclusions became necessary or whether current exclusions could be removed. Can the minister advise whether the fund could consider a similar process for divesting itself of tobacco stocks?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

In relation to the first part of the question, there was a divestment of holdings in companies engaged in the production of cluster munitions. I am advised by the fund that their policy is not to invest in activities that contravene Australian law or international conventions to which Australia is a signatory. Consistent with that policy, the board decided not to invest in companies identified as having activities in contravention of the Convention on Cluster Munitions or the mine ban treaty. But I would say to the senator that it is not easy in practice to engage in a divestment of anything that anybody thinks is problematic. I appreciate the point he is making in raising this. (Time expired)

Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

Mr President, my second supplementary question is: how does the government then reconcile its strong stance against tobacco, including its courageous plain-packaging legislation, with this massive investment in the very same industry?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I think I have explained that to the senator. We have a very clear view about the way in which we believe the governance of the fund should be undertaken. We do not believe the fund should be managed by politicians making directions about investment strategies. It is in the interests not only of Australian taxpayers now but of taxpayers in the years to come for the investment strategy to be undertaken by the fund autonomously in accordance with its investment mandate.

I thank the senator for his recognition of the work the government has done, particularly the Minister for Health and Ageing, in relation to tobacco—certainly more than any previous government has done. I understand his concerns, but what I would say to him, respectfully, is that there are more sensible ways in terms of public policy to deal with tobacco companies than for politicians to get engaged in a process whereby we tell the Future Fund where and how to invest. Whilst I have some sympathy for his views in many— (Time expired)