The decision by the Newcastle City Council to only invest its $270 million in banks involved in “environmentally and socially responsible investments” is, along with Wednesday’s National Reform Summit (which achieved nothing) and Joe Hockey’s flirtation with the republic, just the most recent example of the rise of gesture politics.
State, federal and local politicians like gesture politics because they don’t have to actually do anything. It is far easier to move a motion, make a speech, or tell people that you care, than it is to justify why you CAN’T spend the money, DON’T think government should be involved or explain why investment in infrastructure that will deliver benefits AFTER you have left office is preferable for the taxpayer.
Twenty-year-old Labor Councillor Declan Clausen, who moved the successful Newcastle motion, helpfully revealed more than what seasoned campaigners usually do. To the Sydney Morning Herald, Cr Clausen admitted that the Council should not “invest in things that produce pollutants, greenhouse gases, habitat destruction, uranium, potentially abuse human rights, have involvement in bribery and corruption, or the manufacturing of alcohol, tobacco or gambling products”.
Taking a look at the companies in the ASX 200, if you exclude the banks, mining companies, and any company that has any relationship with the above, there really aren’t a lot left!
It is also ironic that a Novocastrian Greens councillor was quoted as saying that “coal that will send us back to the Stone Age,” when of course it was the coal-powered industrial revolution that was responsible for mankind’s single greatest single leap out of poverty.
If Newcastle City Council is serious about shunning coal, then it will presumably refuse or refund any annual rate revenue associated with coal mining companies, or local businesses that supply goods or services to the coal industry or the domestic rates of local coal-affiliated employees.
FreedomWatch also looks forward to Newcastle councillors voluntarily foregoing the proportion of their remuneration that may be attributed to coal industry business or employee rate revenue. Newcastle councillors get more of this than most, on account of Newcastle being one of NSW’s 3 ‘Major Cities.’
The other thing politicians like about gesture politics is that words can mean two opposite things at the same time – evidenced by the backside covering statement put out by Cr Clausen on Thursday morning that… wait for it… “dismissed comments that Council’s new Investment Policy is about coal” admitting that the “coal industry had played an important role in the regional economy for more than a century, and will continue to play a strong role for many decades to come…”
However, lest anyone think that this is a harmless once-off by a freshly minted twenty-year-old idealist, think again.
Just last week Australia’s sixth largest superannuation fund HESTA, which manages $32 billion worth of assets on behalf of 800,000 people, announced that it had divested its shares in offshore detention centre operator Transfield Services on the basis that mandatory detention “breaches the fundamental principles of human rights law.”
HESTA is of course one of Australia’s fifteen industry superannuation funds who together claim to cover five million Australians with over $165 billion of funds under management. HESTA appears to have six union representatives on its twelve member Board and the nurses union subsequently has claimed responsibility for the decision, partly because nurses were said to be “horrified” at the alleged Government treatment of Gillian Triggs.
On Tuesday, small private school teacher superannuation fund NGS Super also announced it had dropped Transfield on “moral grounds” after “two or three emails”, “some calls” and “some direct engagement from members.”
While it is an important part of democracy for individuals to take an interest in politics, and lobby to achieve outcomes, they should be doing it with their own money. Councillors who use ratepayer investment funds to push a political agenda or superannuation fund boards who wield government-mandated private superannuation money as a political weapon need to be held accountable for their actions.
Personal morals are subjective and change over time. There is no place for politics in investment and if a company or investment product is legal, then it is legitimate. Those responsible for our financial investments should be trying to get the best possible return for our money. Period.
The Federal Government is expected to soon bring to the Parliament its plans to require industry superannuation boards to have more independent directors and an independent chair. This can’t come a moment too soon.
Perhaps the federal and state governments also need to examine laws to ensure that councils make investment decisions at arm’s length.