Bills

Superannuation Funds Management Corporation of South Australia (Investment in Russian Assets) Amendment Bill

Introduction and First Reading

The Hon. P.B. MALINAUSKAS (Croydon—Premier) (11:03): Obtained leave and introduced a bill for an act to amend the Superannuation Funds Management Corporation of South Australia Act 1985. Read a first time.

Second Reading

The Hon. P.B. MALINAUSKAS (Croydon—Premier) (11:04): I move:

That this bill be now read a second time.

The horrors that continue to be visited upon the people of Ukraine continue to splash across our headlines, but the sheer scale of the human cost is incredibly difficult to comprehend. The events perpetrated by Russian aggression have resulted in the loss of thousands of lives and precipitated a humanitarian crisis, with approximately 7.1 million Ukrainians internally displaced, whilst over five million people have fled to neighbouring countries.

According to the United Nations, as of late April this year, Poland alone has taken in almost three million refugees from Ukraine. Over 10 million people have been forced to leave their homes to seek safety. These numbers are hard to even imagine: this is the fastest and largest displacement of people in Europe since World War II, and unfortunately it appears as though the horrors are far from over.

Most countries around the world have imposed tough economic sanctions on Russia to respond to their acts of aggression. This has included the banning of new investments in Russia, freezing the assets of Russian banks and sanctioning Russian financial institutions. Thankfully, I am very proud, of course, that Australia has joined this chorus of international condemnation and has prohibited the import of oil, refined petroleum products, natural gas, coal and other energy products from Russia as well as prohibiting the supply, sale or transfer of certain luxury goods.

These actions, carried out in concert with the international community, are putting powerful economic pressure on President Putin and his indefensible war of conquest. However, the current war in Ukraine and resulting Russian sanctions have highlighted that the current act does not have a mechanism by which Funds SA can be directed by the government to divest Russian investments.

This is an immediate issue that requires a focused response. During the 2022 state election campaign the opposition, under my leadership, committed to amending the Superannuation Funds Management Corporation of South Australia Act 1995 to enable ministerial discretion to enable the removal of state government funds from Russian assets.

When I made this promise, there was a suggestion from others that this was all too hard. I made the point at the time: 'When you get elected to Premier, you get elected with an extraordinary amount of authority, and the idea of the job is to use that authority consistent with a set of principles that you believe to be right.' I promised that if I were elected Premier, when parliament resumed I would be walking in with a piece of legislation to fix it—and here we are.

There is a clear and urgent need to ensure that Australians are not inadvertently helping to fund Russian aggression through their retirement savings. That stands true for South Australians. As such, these amendments will feed into a process that is already underway. Funds SA has already divested itself of a significant volume of Russian funds, but given the ongoing sanctions against Russia, divesting assets without incurring significant losses will take time. There is still a significant portion of funds that needs to be divested.

There is a clear need to enable a direction by the minister to Funds SA for the divestment of remaining Russian assets. Once Funds SA is directed to divest Russian assets, actions taken by the corporation to fulfill this direction should be in line with their fiduciary duties. These amendments have been made in consultation with the board and management of Funds SA, who have flagged their concerns about the impact on investment returns and potential conflict with terms outlined in the heads of government agreement.

This proposed bill addresses these concerns, and the amendments contained in the bill will enable this divestment to occur in a sensible manner that specifically targets Russian-held investments without breaching the principles of trustee governance under the Superannuation Industry (Supervision) Act of 1993. These amendments are limited, targeted and seek to close a loophole in the existing legislation in order to strengthen our response to Russian aggression and reaffirms our support for the people of Ukraine in their time of trial.

These amendments to the legislation enable us as a government to do what the public rightly expects of us. This bill honours our election commitment. This bill shows that the power of government and the power of the parliament should reign supreme when it comes to upholding our solemn obligation, our solemn principles of what we believe to be consistent with our democratic freedoms, our democratic responsibilities and, of course, the impetus upon each and every one of us to express across the world that the act on behalf of Vladimir Putin and Russia cannot be tolerated and that no-one should inadvertently find that their superannuation funds or their investments are allowed to be a display of appeasement; rather, they should be a display of utter intolerance towards Russian aggression and the actions of Vladimir Putin.

I commend this bill to the house. I thank the Treasurer and his department for the expeditious development of this bill, and I trust that it will enjoy the support of all those in this place. I seek leave to have the explanation of clauses inserted into Hansard without my reading it

Leave granted.

Explanation of Clauses

Part 1—Preliminary

1—Short title

This clause is formal.

2—Commencement

This clause provides that the measure will come into operation on a day to be fixed by proclamation.

Part 2—Amendment of Superannuation Funds Management Corporation of South Australia Act 1995

3—Amendment of section 21—Direction of Minister

Section 21 of the Act as proposed to be amended by this clause will provide that a Ministerial direction given to the Superannuation Funds Management Corporation of South Australia may include a direction in relation to divestment of Russian assets. Action taken by the Corporation in accordance with such a direction is to be taken prudently and consistently with the Corporation's responsibilities. There is also a requirement for annual review of the new provisions and for a report of the review to be provided to the Minister and included in the Corporation's annual report.

Debate adjourned on motion of Mr Cowdrey.