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Calls to drop investment in tobacco

Date

Julia Medew

THE Victorian government is investing more than $100 million in tobacco companies despite efforts to reduce smoking rates in the community.

The state government's investment management organisation, the Victorian Funds Management Corporation, says of its investment assets, worth $37.9 billion, that 0.3 per cent is placed in the tobacco industry.

This brings its tobacco investment to about $117 million — nearly four times the New South Wales government's allocation of $30 million.

The VFMC manages investments for public sector organisations including insurers and superannuation funds. Clients include the Department of Health, the Transport Accident Commission, Victorian Managed Insurance Authority, WorkSafe, the Royal Children's Hospital and the University of Melbourne.

The head of client services for the corporation, Malcolm Ashbolt, said although it had decided to stop investing in cluster munitions in recent years, it had no intention of divesting in tobacco companies, which were chosen by external investment managers, not the VFMC.

He said the group's main objective was to provide funds management services to the state in a "commercially effective, efficient and competitive manner".

Doctors and health groups said the investment was outrageous and hypocritical when governments were trying to reduce the damage tobacco caused to people's health.

The executive director of Quit Victoria, Fiona Sharkie, called for the government to abandon its investment because it undermined Australia's tobacco control measures including plain packaging.

"It's really in conflict with the governments' health objectives. Tobacco has been on the health agenda for the federal and state governments for years, so on the one hand they're saying we're investing in tobacco control but on the other hand they're saying we're investing in the companies," she said.

The chief executive of Action on Smoking and Health Australia, Anne Jones, said if the VFMC abandoned investments in cluster munitions, it should pull its money out of tobacco companies.

"Cluster bombs injure and kill about 17,000 people a year and tobacco kills just under 6 million people a year worldwide," she said.

Ms Jones said deaths caused by tobacco were predicted to reach 10 million by 2025, with most of the deaths in poor and middle-income earning countries.

"It's outrageous. These are countries we are sending AusAID to to reduce tobacco diseases," she said.

Dr Bronwyn King, a radiation oncologist at Peter MacCallum Cancer Centre who successfully lobbied a superannuation company to drop its investments in tobacco this year, also called for the Victorian government to follow suit. "As a cancer doctor, every single day I see the devastating effects tobacco has on individuals and their families," she said.

While the NSW government committed to reviewing its investment in tobacco companies this week, a spokeswoman for Victorian Treasurer Kim Wells would not comment on the matter except to say the VFMC was required to invest in accordance with its commercial objectives.

"Under legislation, the Treasurer cannot direct the VFMC in relation to an investment decision," she said.

6 comments so far

  • How hypocritical to spend money on advertisement to stop smoking and then provide 100million in investment. One would have thought that the Bailleau government with its love of cutback could have acted here. The amount of investment in Tobacco should be $0!

    Commenter
    James
    Date and time
    November 08, 2012, 7:48AM
    • There is little left to be said about the stupidity, hypocrisy and irrelevance of the State Government. Unfortunately, the Federal government has been investing Future Fund money in tobacco amongst other things - don't know whether they still are.

      Commenter
      Feral Freeloader
      Date and time
      November 08, 2012, 8:51AM
      • Malcolm Ashbolt should be called out over this one. Subcontracting decisions to a faceless contractor does not absolve you from responsibility. Regardless of the sides of the argument YOU, or whoever has the job in the department, must take responsibility.

        The Power companies are earning $1 Million fines for exactly this reason.

        Commenter
        petermcc
        Date and time
        November 08, 2012, 9:05AM
        • I read the article and then read it again thinking that this just cant be right. So much money put into supporting the tobacco industry and so much money spent on reducing the number of people who smoke. Its like one hand making a hole in a bucket of water and the other hand keeps topping up the water in the bucket making sure it doesn't empty out through the hole!!!! I just don't get it!!!!!!!!!!!!

          Commenter
          Sad Melbourne
          Date and time
          November 08, 2012, 9:54AM
          • The head of client services for the corporation, Malcolm Ashbolt, said although it had decided to stop investing in cluster munitions in recent years.

            What the hell was this guy thinking that it might ever be OK to invest public money in CLUSTER BOMBS?

            These things are specifically designed to kill and disable farmers and children, and remain active for years after conflicts have ceased? They caused more civilian casualties in Iraq in 2003 and Kosovo in 1999 than any other weapon system.

            Ashbolt should be fired just for that alone. Who has oversight over how our money is used? How can our money be invested in such a disgusting, disgraceful product?

            There must be an an inquiry into this.

            As for responsibility - the Government has outsourced financial management to a company which further outsources its financial management? How many rent seeking middlemen are in this loop, taking their cut of our money?

            Commenter
            Riddley Walker
            Location
            Inland
            Date and time
            November 08, 2012, 9:56AM
            • Totally Pathetic.

              We just went on a holiday interstate and LOVED being able to sit in outdoor dining areas with NO SMOKING - Come on Victoria - join the 21st Century and ban smoking in outdoor dining/drinking areas, Plus don't invest in Tobacco companies

              Commenter
              Jeff
              Date and time
              November 08, 2012, 12:21PM

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