- Hysteria over divestment
- The mouse that roars:coal in the Queensland economy
- Is Australia still the land of the fair go?
- Politics in the Pub
- TAI in the media
Hysteria over divestment
Billions of dollars in shares are traded every day without much commentary. So why has one investor’s decision to dump $16 million in seven companies found a fortnight of rolling news coverage and national controversy?
The Australian National University (ANU) announced two weeks ago it would divest from seven resources companies, including gas giant Santos, Oil Search, and five other non-fossil fuel companies. The decision followed a long running student campaign, backed by a referendum result showing 82 per cent of ANU students support divestment from fossil fuels. Trying to resist the full divestment demands, ANU sourced independent ‘environmental, social and governance’ (ESG) information on their investments, and decided to knock out the lowest rated companies.
Then the storm broke. Alongside the companies complaining, the Australian Financial Review (AFR) reports no less than 5 federal ministers and the Prime Minister himself roundly criticising the decision, calling it “stupid”, “reckless”, “irresponsible” and “a disgrace”. Joe Hockey said the ANU was “removed from the reality of what is helping to drive the Australian economy and create more employment”.
A Canberra Times editorial said the reaction “verged on the hysterical”. That was only a few days in. As it rolled on Bernard Keane said “The @FinancialReview’s relentless demonisation of ANU for its divestment strategy reflects how shitscared the fossil fuel lobby is about it.” In an appearance for ABC TV’s The Drum, Tom Swann, spokesperson for the Fossil Free ANU campaign (and Research Assistant at the Australia Institute), noted “Symbolism is important; that’s why we’ve seen such a strong reaction to ANU’s decision”.
To say nothing of the questionable logic that investors must back job creating industries, perhaps the Treasurer needs to spend some time with ABS data—mining is a small employer, mining jobs are down, other sectors have grown much faster in recent years, and most mining profit goes overseas. Besides, politicians are no strangers to making ethical financial decisions, such as refusing donations from tobacco companies as Richard wrote in the Drum this week.
On an international scale, the ANU’s divestment is comparatively mild. Others have made far bigger, sector wide divestment decisions, including the Rockefellers Brothers Fund, Stanford, the World Council of Churches, the British Medical Association, Local Government Super, AMP and many more. None have attracted attention on the scale of ANU. Glasgow University committed to divest a week ago and found generally positive coverage in the UK press.
Dozens of investors and business people from across the political spectrum – including former Prime Minister Malcolm Fraser and former Liberal leader Professor John Hewson – added their name to an open letter published in Wednesday’s Canberra Times supporting the ANU’s right to invest or divest from companies based on social, environmental or ethical grounds, arguing “it is every investor’s right to make their own investment decisions without bullying from vested interests and government ministers.”
Hewson went further: “For politicians to try to bully, coerce and influence this university is just outrageous… The big story here is what got the politicians so stirred up? Was it the Minerals Council? It virtually owned the previous government and appears to have large influence over this one.
And today, the President of the Rockefeller Brothers Fund and thousands of members of the public added their names to that letter of support. Have a look: it’s on page 15 of today’s Australian Financial Review.
Research by The Australia Institute suggests that one in four Australians with super would prefer their retirement savings not be invested in fossil fuels. That’s around $250 billion worth of consumer sentiment.
It’s not too late to show your support for ANU and add your name.
Meanwhile, the AFR came up with the following diagram imputing something. We are not sure what.
We can confirm that all of the information it contains is publicly available on the internet, much of it on our website. They also missed Richard’s regular column in the AFR and that our new Deputy Director, Ebony, began her career at the AFR. Is the AFR also “embedded in the Green-left”?
Given the welcome attention the coverage is driving to the issue of fossil fuel risk and divestment, we can only wonder how much longer the story will run, and who will be next. As reported in Campus Morning Mail, other universities are now getting a surge of emails about their portfolios…
Don’t forget, it’s not too late to add your name to the open letter.
The mouse that roars: coal in the Queensland economy
Today we released our new report The Mouse that Roars: coal in the Queensland economy.
Coal mining employs just one per cent of Queenslanders and coal royalties make up only four per cent of state government revenue. Despite these minor contributions Queensland politicians of both stripes are fond of saying the state is “in the coal business” and that limiting its expansion would bring “catastrophe”.
It’s not only Queensland’s leaders who are mistaken about the role of the coal industry in their economy, most normal Queenslanders are too. We conducted a survey of 1,014 Queenslanders and asked them for their impressions of the size of the industry. On average they thought coal:
- Employed 13 per cent of Queenslanders – more than ten times the actual amount.
- Contributed 19 per cent of state revenue – nearly five times the actual amount.
Additionally, Queenslanders thought there was less foreign ownership of the coal industry, which in reality is 80 per cent controlled by overseas interests, meaning that profits flow largely offshore.
Despite these inflated impressions of the importance of coal to the Queensland economy, 63 per cent of Queenslanders are opposed to expanding the coal industry if it impacts on the Great Barrier Reef or on agricultural areas and water resources.
The report also looks in detail at some of the industries which have been negatively affected by Queensland’s coal boom, particularly through impacts on the exchange rate and input cost increases:
- Employment in agriculture has declined by 21,000 jobs in the state, or 28 per cent since 2008.
- Tourism arrivals have declined and hotel occupancy rates in leisure tourism areas have reduced by up to 10 per cent.
- Manufacturing output has flat-lined, with economic assessments from one major coal proposal estimating that project alone could reduce employment in manufacturing by over 2,000 jobs.
Queensland’s economy, like the wider Australian economy is based on services. Service sectors employ three quarters of the workforce and produce 60 per cent of the state’s output. But, as any Queenslander can tell you, while the coal industry’s contributions may be meek, its lobbyists have a mighty roar.
Is Australia still the land of the fair go?
In case you missed it, this week was Anti-Poverty Week, and to celebrate we took the opportunity to reexamine the extent of inequality in Australia.
There is a stark gap between those with the most and those with the least in Australia. Seven families hold more wealth than 1.76 million households combined. Our wealthiest 20 per cent of households own 71 times more and earn five times the income of the bottom 20 per cent.
Rather than discussing solutions, however, we were told it’s not a problem.
Former Howard Minister Amanda Vanstone wrote a piece suggesting “rich versus poor is the wrong debate”, that she’s sick of hearing about it, and all it does is pander to “the politics of envy.”
Vanstone’s piece relied on the argument that the rich pay more tax, some of which is spent supporting welfare payments. To this end, Australia’s poorest should be grateful to the rich for paying as much as they do, rather than grumbling about how little they have in comparison.
But in a progressive tax system such as ours, the rich pay more tax because they earn more income, and nearly half of the welfare recipients supported by income tax receipts are either pensioners or students. If a small proportion of income earners is paying a large proportion of the tax in a progressive tax system, that simply shows how much more the wealthiest are earning than everyone else.
Rather than dismissing inequality as a concern, Vanstone inadvertently demonstrated how vast the problem really is.
Previous research by The Australia Institute, Income and wealth inequality in Australia, demonstrates that our tax system has the ability to effectively reduce inequality. Those who benefit from the system, including retirees on the pension, who paid tax all their lives, and students, who are about to pay tax for their rest of their working lives, are supported by those most able to afford it.
Vanstone’s article represents an ideological objection to treating inequality as a problem. It’s an ideology she’s not alone in holding. The Abbott Government’s 2014-15 budget, which delivers broad cuts to social assistance programs, is expected to increase the gap between rich and poor and reduce the effectiveness of Australia’s welfare system.
The government thinks our current welfare system is unsustainable, despite The Australia Institute’s analysis showing that the number of income support recipients is actually declining as a percentage of our population.
A progressive, equitable welfare system is not unsustainable. Growing inequality, on the other hand? That’s a different story.
Politics in the Pub
If you’re in Canberra next week come along to Politics in the Pub, ‘An evening with Anthony Albanese’.
Anthony is the former Deputy Prime Minister and currently serves as Shadow Minister for Infrastructure and Transport and the Shadow Minister for Tourism.
As well as his political interests, Anthony is an avid supporter of the South Sydney Rabbitohs. He will surely talk about their recent win as well as express his views on politics. Questions will be taken from the floor so come along and ask Anthony something yourself.
When: Wednesday 22 October, 6.30pm-7.30pm
Where: Lounge Bar, Level 3, Uni Pub, 17 London Circuit Canberra
TAI in the media
The Saturday Paper did a front page feature on The Australia Institute this week. We are proud of the impact of our small team and it’s great to see others notice. Thanks so much to our army of small donors, and our handful of larger ones. We couldn’t do it without you!
ANU’s green investment policy reflects real world concerns
Australia needs to be fairer if it wants to be richer
Divestment is just the free market at work
John Hewson and Malcolm Fraser blast Liberals over ANU divestment backlash