Greens to push for Future Fund bar on tobacco investment

Australia’s Greens will ask lawmakers today to vote to stop the government, which plans some of the world’s toughest anti-smoking laws, from investing in tobacco companies as part of a civil servants’ retirement fund.

Greens senator Rachel Siewert will put a motion to the Senate to stop the government’s Future Fund – established in 2006 to cover pension costs of retiring lawmakers, judges and public servants – investing in tobacco.

The motion, listed on the Senate’s website, calls on the government to “review and revise investment criteria as a matter of urgency to ensure the Future Fund is invested into ethical enterprises that are consistent with the health and well-being of the nation and not in tobacco.”

The Future Fund held $147.7 million worth of shares in 14 tobacco companies including British American Tobacco as of December 31, 2010.

The portfolio holdings in manufacturers of tobacco and cigarette producers were obtained by Bloomberg News through an Australian Freedom of Information Act request.

Australia raised tobacco taxes by 25 per cent last year and says it will become the first nation to ban brand names on cigarette packaging to deter smokers. Former Prime Minister Kevin Rudd last April pledged the government would spend $85 million on an anti-smoking advertising campaign, saying “cigarettes are not cool.”

Tobacco companies

The Future Fund’s holdings as of December 31 include $46.4 million in London-based British American Tobacco, $36.5 million in New York-based Philip Morris International Inc. and $26.1 million in Lorillard Inc.

The details were contained in a document received from the Future Fund on March 10 after a freedom of information request by Bloomberg News. Its investment in tobacco companies represents 0.5 per cent of its holdings in equities.

About 15,000 people die each year from tobacco-related diseases in Australia, where sales of tobacco products totaled $10.9 billion in 2009, according to government statistics.

Smoking is the largest single preventable cause of death, the Medical Association says. Health Minister Nicola Roxon says smoking cost the $1.3 trillion economy $31.5 billion each year.

The Future Fund had $71.8 billion in assets at December 31, 2010, according to a portfolio update published on its website on January 28 this year.

It had $2.6 billion invested in Australia’s largest telephone company Telstra, part of the seeded capital provided by the government when the then state- owned Telstra was sold to the public. It has a further $8 billion invested in Australian equities.


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