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Big Tech, weapons, tax havens, even Rupert Murdoch – secrets from the Future Fund investment vault

by Philip Dorling and Rex Patrick | Mar 26, 2023 | Economy & Markets, Latest Posts

The secretive Future Fund’s chairman Peter Costello might not like it, but Freedom of Information requests are peeling back the lid on the Fund’s weighty overseas investments. Philip Dorling and Rex Patrick report the more controversial ones.

Big Tech, Big Pharma and Big Oil are the top of the pops in a newly released list of Future Fund Investments across the United States, United Kingdom and a range of tax havens, notably among the Cayman Islands.

These revelations come on top of revelations earlier this year about ethically and environmentally questionable Future Fund investments in China.

The latest FOI drilling into the side of the vault also shed light on the Fund’s investments in arms manufacturers, Chinese companies operating out of the Caymans as well as politically controversial investments in Rupert Murdoch’s right-wing media empire.

Rex Patrick’s FOI lifts the lid on Future Fund’s China investments

It’s so infuriated Senator Barbara Pocock, who has been pursuing the Fund’s investment practices the Senate. “It should not take FOI requests for Australian citizens to find out where their own money is being invested. The Future Fund is suffering from a corrosive secrecy disease.

The public should know about these Future Fund investments in carbon polluting fossil fuels, in arms manufacture and in companies based in tax havens – not to mention the Murdoch and Fox media empires. It’s time to come clean.

Big Tech

In what may be its largest investment in a single publicly listed foreign company, the Future Fund holds a $793 million stake in tech giant Microsoft. Other very large Future Fund tech investments include Google owner Alphabet ($559.9m), NVIDIA ($346.8m), Cisco Systems ($288.2m), Meta Platforms ($256.4m) and Intel Corp ($240.0m). Amazon comes in with a rather more modest investment of $187 million.

Given the vital importance of IT and telecommunications policy for Australian governments, business, our economy and society, disclosure of the nature and scale of these publicly funded investments is clearly in the public interest.

However, it only comes after the Future Fund was forced to abandon its deep preference for secrecy and resistance to scrutiny through FOI.

Pharma, energy and mining

Big Pharma and healthcare are another favoured destination for the Future Fund’s investments with a $279.4m stake in Pfizer, $257.7m with Johnson & Johnson, and $258.4m with United Health Group.

Big Oil and other carbon polluting sectors enjoy significant Future Fund backing. Coming in well above the $200 million threshold is US energy giant Exxon Mobil ($262.4m) which tops a long list of American and British oil, gas and other energy supply and distribution companies including Occidental Petroleum ($24.9m), Chevron ($65.5m),Edison International ($158.9m), National Grid (181.4m), Glencore ($21.8m) and Marathon Petroleum ($34m), as well as multinational miner Rio Tinto ($63m).

Also among the Future Fund’s many energy and mining investments is a stake in the controversial mining and fracking equipment and services supplier Halliburton ($7.3m).

Vehicle investments

Investments in the US automotive sector include Elon Musk’s electric vehicle manufacturer Tesla ($114.0m), but that commitment is smaller in size that the Fund’s stake in General Motors ($139.4m) and only slightly ahead of that in Ford Motor ($107.5m).

AUKUS wins

Paul Keating’s words still resonate in Aussie minds,

At the Kabuki show in San Diego … there’s three leaders standing there, only one is paying, our bloke, Albo.

But it appears the Future Fund is well ahead of Albo, with investments in leading American and British aerospace and defence manufacturers including Raytheon Technologies ($91.9m), Lockheed Martin Co ($75.1m), General Dynamics ($65.3m), Northrop Grumman ($41.5m), Honeywell International ($76.0m), BAE Systems ($20m), and Rolls-Royce ($0.7m).

A number of these companies will be deeply involved with the AUKUS nuclear submarine project, so maybe this a return path for a tiny share of the eye-watering $368 billion AUKUS price tag.

Tax haven heaven

Never mind the Government’s claims to want to tackle multinational tax avoidance and profit shifting. The latest FOI reveals the Future Fund is quite happy to support companies domiciled in low tax jurisdictions and tax havens. The FOI documents show direct holdings in tax havens such as the Caymans, the notorious British Virgin Islands, and Jersey.

The Future Fund has embraced investment in companies purportedly operating out of the Cayman Islands where its investments total well over $600 million. This includes major stakes in Chinese and Hong Kong companies registered there, including Tencent Holdings ($157.5m), Alibaba Group Holdings ($110.9m), CK Asset Holdings ($41.9m), Baidu ($30.8m), Meltuan ($53.1m) and Netease ($26.7m).

Although Peter Costello has indicated that the Future Fund has wound down its Chinese investments, in part owing to geopolitical risk and post-Covid uncertainty in Chinese markets, these offshore investments add significantly to the Fund’s approximately $790 million exposure on the Chinese mainland and in Hong Kong.

(The Future Fund’s investments in tax haven entities may be routine vehicles for the Fund to avoid “double-taxation”, that is being taxed twice or more in differing jurisdictions. However, the FOI list obtained by the authors details “direct investments”.)

Backing Murdoch

In the end however, two quite modest investments in the United States may prove to be among the Future Fund’s more controversial holdings – a $6.3 million stake in News Corp and $13.5 million in Fox Corp which have been notable political allies of Coalition governments.

That’s $19.8 million in the two companies controlled by media mogul Rupert Murdoch and his primary channels of national and global political influence.

Fund chair Costello apparently has no problem with putting millions of taxpayers’ dollars into Murdoch’s far-right populist media machine which fuelled the attempted putsch at the US Congress on 6 January 2021. Costello is also chairman of Liberal Party aligned Nine Entertainment.

However, the results of the last Federal election strongly suggest that a majority of voters would be unlikely to support this. The revelation of this previously secret investment is likely to raise more than a few eyebrows across the Federal Labor Government, Labor Party members, as well as the Greens and independents in Parliament.

The Future Fund is an independent, statutory body but it wouldn’t be entirely surprising if a “Defund Murdoch” campaign emerges.

Last month Treasurer Jim Chalmers wrote about the need to bring ethics and values into national economic and financial policy. Perhaps he should call in Costello for a chat about ESG.

Love Island Australia: Nine Entertainment chairman Peter Costello dunks Hugh Marks

Philip Dorling has some thirty years of experience of high-level political, public policy and media work, much of that at the Australian Parliament.

He has worked in the Australian political environment from most angles, in both the national and state levels of government including as a senior executive; as a senior policy adviser for the Federal Labor Opposition and for cross bench Senators; and as an award-winning journalist in the Federal Parliamentary Press Gallery.

Rex Patrick is a former Senator for South Australia and earlier a submariner in the armed forces. Best known as an anti-corruption and transparency crusader -

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