Jane Hume (Victoria, Liberal Party, Shadow Minister for the Public Service) Share this | Link to this | Hansard source

My question is to the Minister for Finance, Senator Gallagher. The announcement this morning that the government will break bipartisan consensus on the Future Fund and direct it to invest in the government's political agenda is gravely concerning. Former chair of the Future Fund David Murray said that this change will lead to boondoggle budgeting. Why is the Albanese government robbing Australia's sovereign wealth fund to prop up Labor's priorities, which just so happen to align with the policy areas in which you are failing?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

It does seem that this change to the investment mandate has really exercised those opposite. A statement of expectations that hadn't been updated in 15 years and a new investment mandate—

Opposition Senators:

Opposition senators interjecting—

Sue Lines (President) Share this | Link to this | Hansard source

Order! Minister Gallagher, please resume your seat. Order!

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

I don't agree with the comments from Mr Murray. I would say that it is, to me, astounding that the opposition does not believe that housing is an important national priority. They see that as something partisan. It says, 'increasing the supply of residential housing in Australia'. That's not very political. I would have thought that is something that you would believe is a national priority. It says, 'supporting the energy transition'. Well, maybe. We know you don't believe in climate science. We know you don't believe in net zero, so—perhaps. And it says, 'delivering improved infrastructure including economic resilience and security infrastructure'. We've included those as areas for the Future Fund to consider in its investment decision.

Of course, as our leader has explained, there are no changes to the rate of return. We do expect the Future Fund to maximise return, but where they are making decisions, and those decisions between opportunities for the Future Fund are similar, we believe that it is responsible to consider those national priorities. It's as simple as that. That's all that's changed—nothing else. (Time expired)

Sue Lines (President) Share this | Link to this | Hansard source

Senator Hume, first supplementary?

Jane Hume (Victoria, Liberal Party, Shadow Minister for the Public Service) Share this | Link to this | Hansard source

By politicising the Future Fund and its investment activities, Labor has opened up the door to putting any political agenda into the fund's investment mandate. Will the government rule out directing the Future Fund to divest from any asset classes or investments?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

As you can see, the decision today is about areas where the Future Fund is making investments. I strongly don't believe, as you have put it, that this is politicisation of the Future Fund. What a load of rubbish! Something that was established two decades ago can never ever be changed under any circumstances—how ridiculous is that? Why have an investment mandate? Why have a statement of expectations? Why do they exist? They exist so that shareholders can update, if they choose, and provide further advice or information.

Simon Birmingham (SA, Liberal Party, Shadow Minister for Foreign Affairs) Share this | Link to this | Hansard source

A point of order on direct relevance: Senator Hume's question was specifically about divestment. Senator Gallagher has come nowhere close to questions of where the government would direct them to divest.

Sue Lines (President) Share this | Link to this | Hansard source

The question also included politicising the fund. I'll remind the minister of the narrowness of the question, but I do believe she's being relevant.

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

I answered it. The changes that have been outlined in the investment mandate and the statement of expectations are about where the Future Fund is considering investments. They are not about divestment; that is not covered in any way in the changes that have been made to date. (Time expired)

Sue Lines (President) Share this | Link to this | Hansard source

Senator Hume, second supplementary?

Jane Hume (Victoria, Liberal Party, Shadow Minister for the Public Service) Share this | Link to this | Hansard source

If the Future Fund does not invest in Labor's political policies following your interference, can the government rule out further direction to the Future Fund to force them to invest in your priorities?

Sue Lines (President) Share this | Link to this | Hansard source

Minister Wong?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

President, we—

Opposition senators interjecting—

I think she's perfectly capable of it.

Honourable senators interjecting—

Sue Lines (President) Share this | Link to this | Hansard source

Order! I've got the minister on her feet. Minister Wong.

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

Generally I don't ask you to rule on hypothetical questions, but that was an entirely hypothetical question. From the beginning it goes 'if'—then a set of propositions, neither of which are factual. So I would say to you: it actually does infringe the standing order.

Simon Birmingham (SA, Liberal Party, Shadow Minister for Foreign Affairs) Share this | Link to this | Hansard source

On the point of order, the question goes to the intent of government policy, as has been announced in the last 24 hours, and the consequences if that intent of the government policy is not actually achieved. It's perfectly reasonable to be asking the government and the minister a question about the consequences if their publicly stated intentions are not met.

Sue Lines (President) Share this | Link to this | Hansard source

I am advised that the Clerk believes the question to be in order because it does talk about the broad consequences of the fund.

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

I think it is important, because there were so many ifs in that, to be really clear about what the government has announced today. The government remains committed to the Future Fund's independence and its commercial focus. There are no changes being proposed here to the existing benchmark rate of return or the risk profile. The government will not be directing specific investments being made by the fund. The fund and its board will continue to make decisions about investments independently, and its primary objective will be to maximise returns.

Barbara Pocock (SA, Australian Greens) Share this | Link to this | Hansard source

My question is to the Minister for Finance, Senator Gallagher. Unlike those opposite, I think it's good to see the government nudging the Future Fund investment mandate towards public good—public money for public good. However, nothing is being done to get investment out of destructive industries. Private investment funds increasingly face member criticism for making investments in fossil fuel companies that contradict their own net zero targets. Our $230 billion sovereign fund invests billions in Australia's biggest fossil fuel companies. The science is clear: we cannot keep expanding coal and gas if we want to keep global warming below 1.5 degrees. The Future Fund has a clearly stated purpose to invest for the benefit of future generations. Minister, when will your government direct the Future Fund to stop investing in fossil fuels, which are wrecking the future of our kids?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

I thank Senator Pocock for the question. That is not any part of the changes that we have made through the investment mandate or the statement of expectations. We are not including any changes about restrictions further than what exist now in relation to investments in the Future Fund. We believe that the independence of the Future Fund should be maintained and that the board needs to make those decisions based on investment advice, including the rates of return. They obviously have a responsibility to report, and we've made some changes there to increase reporting about particular investments in a way that provides more information to the public. I would say that the Future Fund is one of Australia's biggest investors in renewable energy already. We believe that setting out these new areas for the Future Fund Board of Guardians to consider when they're making decisions is an important change to the current arrangements and will strengthen the role and future of the Future Fund.

Sue Lines (President) Share this | Link to this | Hansard source

Senator Pocock, first supplementary?

Barbara Pocock (SA, Australian Greens) Share this | Link to this | Hansard source

Investment exclusions are not new for the Future Fund. It is not sector neutral. In 2013, under pressure from the Greens, the Future Fund made the decision not to invest in tobacco, because of the harm it causes. It doesn't invest in cluster munitions, and thank heavens for that. Coal and gas are the tobacco of today. Your government is pushing the fund to invest in social goods, housing, renewables and infrastructure. Why stop there? We need to stop bad investments too. How can you justify not directing the fund to divest from fossil fuels? (Time expired)

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

The Future Fund, as Senator Pocock outlined, has an exclusions list under its ESG risk management policy, but investment decisions of the Future Fund are made by the Future Fund Board of Guardians independently from government in accordance with the fund's investment mandate. Under the Future Fund Act 2006, the responsible ministers must not give directions to the Future Fund to invest in a particular financial asset. We are not making any changes to that. Our focus has been on increased transparency and information about the investments the Future Fund has, increased reporting against that ESG framework and now providing three national areas of priority for the Future Fund to consider when they are making their investments, being mindful that no change has been made to the rate of return or risk profile for the Future Fund.

Sue Lines (President) Share this | Link to this | Hansard source

Senator Pocock, second supplementary?

Barbara Pocock (SA, Australian Greens) Share this | Link to this | Hansard source

Minister, in 2023 your government signed up to the Glasgow statement which requires you to 'end new direct public support for the international unabated fossil fuel energy sector within one year'. Instead, the Future Fund has increased, by 11 per cent in just six months, its investment in Santos, Woodside and Whitehaven, three of Australia's biggest fossil fuel companies. Minister, will the government honour this agreement you've signed and end new Future Fund investments in fossil fuels, which are growing?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

Well, yes, and we do not direct the Future Fund in the investment decisions it makes. It is an independent board of guardians that makes those decisions. We provide some guidance, through the investment mandate and the statement of expectations, which has been modestly amended—despite the hysteria from those opposite—to include housing, the energy transition and the resilience of our national infrastructure as priority areas for the fund to consider. How outrageous is that!