Register  
Future Fund defends tax havens
Friday, 10 August 2012 12:20pm

The Future Fund has defended its investments in subsidiaries based in known tax-havens during a senate inquiry yesterday.

The fund's 2011 annual report shows that it has 14.4% of its assets in the Cayman Islands, plus significant investments in the British Virgin Islands and Jersey, and smaller investments in Luxembourg.

The fund asserted its independence at yesterday's inquiry - defending itself against a bill put to Parliament by the Greens which would see it forced out of several contentious investments.

The Greens' 'responsible investment' push would force the Future Fund to pull out of profitable holdings in several Tobacco manufacturers, and those companies involved in the production and development of nuclear weapons.

"Properly structuring its investments can be essential to maintaining the board's rights and entitlements, including the benefit of sovereign immunity for tax purposes in certain jurisdictions," the Future Fund stated yesterday.

Several groups have made submissions to the Greens-driven proposal to amend Government Investment Funds Amendment (Ethical Investments) Bill 2011.

The companies that the Future Fund invests in are not producing, "paperclips, dual-use items or things that are not specific to nuclear weapons or their delivery systems," said associate professor Tilman Ruff, in his testimony to the inquiry.

"These are companies that are integrally involved in the production of key nuclear weapons and delivery system components," said Rush - chair of the International Campaign to Abolish Nuclear Weapon's Management Committee.

Rush said the largest of these was Honeywell, an American conglomerate with a significant Aerospace & Defense arm.

If the Greens' Bill is successful the future fund has warned that it will have to revisit its risk and return calculations, which could see diminished returns.

The Future Fund has investments in 15 tobacco manufacturers that totaled $225 million as at May 2012, as well as $135 million in nuclear weapons manufacturers.

Yesterday the Future Fund said that one of the key principles of the fund is independence; however responsible investment was already a key part of its highly structured investment process.

The fund also stressed that none of its investments contravened existing OECD treaties.

1 comment on this article
Risky Balaji from cba wrote:
The action of the future fund, clearly demonstrates that enhanced returns can be got only by using tax havens.
13 August 2012 8:27am
Blogs
Follow the industry experts.
Christopher Page
Christopher Page
Managing Director

Medcraft's appalling speech
I am surprised. More than that, I am astonished, shocked. Last week I was left speechless by the address that the Australian Securities ...read more
 
Benjamin Ong
Benjamin Ong
Chief Economist

Reflation, rotation and the taper
'Tis being my final type (drivel, to some gentle readers) for the year, we'll take a look back at the 2013 that was to seek the lessons ... read more
 
Alex Dunnin
Alex Dunnin
Director of Research & Editorial Services

Women-led companies better for investors
The Australian government end last year released its first Gender Equality Scorecard and while the results are discouraging, a separate ... read more
News Search   
VideoBrought to you by
Market Thinking - A different way of looking at economies?
First, a confession. Mark may have started his career as an economist but he joins this year's panel not as a chief economist but as the head AXA Framlington Asia. This is to the benefit of the audience ... Watch video
The two-speed economy in reverse
James provides a local perspective and explains to the audience why the mining investment boom is an aberration and it is now a 'return to the old normal'. To view James Bond's slides please click ... Watch video
Great unwindings
Bob believes plunging oil prices may extend the stockmarket rally by a year or two and discusses why investors could expect a volatile few months. Overall, he believes we are entering an era of low returns ... Watch video
The major economies in 2015
Is the European economy dead in the water? Is faith on Abenomics waning? Why should investors be more optimistic about the US economy this year? Chris Probyn, the Boston-based chief economist of State ... Watch video
The global and Australian economic outlook
The anchor man of the panel, Saul provides great insights on the domestic economy. And bravely makes the forecast that the Reserve Bank will not cut interest rates this year and that the next move is up ... Watch video
Get it
Daily
FREE to your inbox, get the Financial Standard Daily Email.
Get the Free
iPad app
Download the Financial Standard iPad app for FREE
Industry
Events
MAR
01
MAR
10
Adviser Big Day Out Investment Manager Roadshow-Perth
11
Adviser Big Day Out Investment Manager Roadshow-Adelaide
12
Adviser Big Day Out Investment Manager Roadshow-Melbourne
18
Adviser Big Day Out Investment Manager Roadshow-Brisbane
19
Adviser Big Day Out Investment Manager Roadshow-Sydney
News
Bites

$245 (inc GST) for 1 year
 
 
Copyright © 1992-2015 Rainmaker Group
All material on this site is subject to copyright. All rights reserved. No part of this material may be reproduced, translated, transmitted, framed or stored in a retrieval system for public or private use without the written permission of the publisher.
Link to something PbAUJprs