Australian government agencies invested AU$38M in tobacco companies in 2012, with figure rising despite policies to cut smoking rates, documents show
August 26, 2013
– STATE Government agencies had about $38 million invested in tobacco companies in 2012, and the figure rose last year despite policies to cut smoking rates.
The amount of funds indirectly invested in tobacco companies by WorkCover went from $3.9 million in 2011 to more than $9 million last year. Funds SA also had nicotine stains on its balance sheet — it has had $28.8 million tied up with tobacco firms last year but earlier this year pledged to kick the habit.
At the time, Health Minister Jack Snelling welcomed Funds SA decision to stop profiting from tobacco companies, however it has emerged Funds SA intends to keep almost $9 million invested in cigarette firms.
The investments revealed in documents released under a Freedom of Information application made by Isobel Redmond when she was Opposition Leader.
Funds SA chief executive Richard Smith included an explanatory letter which said directors had resolved to exclude investment in tobacco manufacturers ‘wherever possible.’ “Exposure to tobacco manufacturers cannot be completely eliminated as some of Funds SA’s investments are most efficiently held through pooled investment vehicles such as unit trusts,” Mr Smith wrote. “Such vehicles are not available covering relevant mandates with an exclusion on tobacco manufacturers.
“Funds SA’s exposure to tobacco manufacturers, as at 31 October 2012, amounted to 0.15 per cent of total assets or $28.8 million. We envisage the decision to exclude manufacturers of tobacco products from Funds SA portfolios wherever possible will see exposure to these companies fall to 0.04 per cent of total assets or $8.7 million based on current figures.” WorkCover says it has a “small indirect exposure via pooled vehicles” managed by external fund managers.
ASH Australia chief executive Anne Jones said South Australia was looking “tobacco-friendly” compared to other states.
“I think most people would say $8.7 million is still a lot for Funds SA to invest in companies whose products bring death and disease,” she said.“We were under the misleading impression SA was getting rid of all tobacco investment, not just some, and SA still has tobacco displays in shops and has just cut funding for anti-tobacco advertising.”