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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2022-09-06 Daily Xml
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Bills

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

Second Reading

Adjourned debate on second reading.

(Continued from 7 July 2022.)

The Hon. N.D. CHAMPION (Taylor—Minister for Trade and Investment, Minister for Housing and Urban Development, Minister for Planning) (15:57): The legislation that I want to discuss today relates to events in Europe and the Russian invasion of Ukraine. There is probably a lot we could say, but I think one of the things that it speaks about is President Putin's miscalculation, and this highlights the dangers of aggressive authoritarian states and particularly those which have one foot inside the international order—that is, they sit on the Security Council, they participate in the United Nations, they are at the G7, they participate in all those multilateral forums—and at the same time have a foot outside of the rules-based order and seek with that foot or that aspect of their statecraft to completely undermine the postwar consensus.

The danger of that is it is a danger to individuals, a danger to states and a danger to order in the world, and what we see is aggression, opportunistic behaviour, and risk-taking. We have seen this over and over again in the last few years. There have been many reports by ASPI, by Chatham House, by RAND Corporation and various other think tanks which outline the Russian states'—and other states'—behaviour in one respect, as I said, being part of the multilateral order, often putting the regime's ill-gotten assets in places like London, the US and other places, and indeed in Australia's Gold Coast. There is a particular flow of money to the Gold Coast. Basically, they like the Western world for the rule of law, for the security of their assets and all of that. They like being part of the multilateral order, but then they have a whole aspect of their statecraft that seeks to completely undermine that.

You get aggression in Africa, where you see the participation of the company Wagner, a mercenary outfit, and you see various FSB operatives or ex-FSB operatives, Russian spies, operating in places like the Central African Republic, often influencing elections, often appropriating assets—mines, goldmines, diamond mines—and manipulating a nation's statecraft. I saw this firsthand when I spent a bit of time at the United Nations during the period in which Foreign Minister Lavrov was chairing the UN Security Council. It was quite obvious that they sought to use that august institution as a method of advancing—in a very obvious way—their incursions into Africa.

What we found with Russia was that they were doing a number of things on a number of levels, but all of it dominated by this aggression, by pushing things to the limit, by being opportunistic. If there are elections to be manipulated, if there are issues in a democratic society to be manipulated, if there are assets to be obtained through quasi-colonial methods, they do that in places like Africa and elsewhere. All this undermines the international order in a quite significant way. This reached its high point with Georgia and Chechnya, both times when the world did not call out Mr Putin's behaviour. In fact, countries like Germany got even deeper into a relationship with him, an economic and diplomatic relationship.

What we have now seen in Ukraine is a high point of that risk-taking, that aggression, that opportunistic behaviour. Mr Putin and his government calculated that it would be a three-day war, that they would simply remove President Zelenskyy and the rest of the civilian leadership, that they would manipulate the apparatus of the Ukrainian state to their benefit, that they would see military collapse and international acquiescence to the complete destruction of the Orange Revolution and the moving of Ukraine—a vast area with millions of people and basically Europe's breadbasket—back into the sphere of influence of the Russian state. This was an attempt to re-create the Soviet Union.

If this had actually occurred, it is not as if the appetite for risk, for aggression, would have been sated in any way. We know what would have happened next: Lithuania, Estonia, the Baltic states would all have been under threat. We know that Poland would have been under threat, because if characters like Putin are indulged they just keep going.

What we found was that all the assumptions of Mr Putin's government, all his intelligence apparatus, were wrong, completely and utterly wrong. We have seen excellent intelligence work by the governments of the United States and the United Kingdom, which consistently called out Mr Putin's intention and positioning to invade the state of Ukraine. It was an absolutely brilliant use of the Free World's statecraft. They kept on calling it out and warning European nations, nations like Germany and the like, that this was going to occur.

That was critical. There was a sort of denial going on that Russia would do this. Because they have one step inside the multilateral order, no-one could quite believe that a member of the Security Council would do the very thing that the United Nations was set up to prevent—that is, the use of force to change borders, not just in Europe, but especially in Europe, but for the world. It was a good use of statecraft, of intelligence, by the United States of America and by the United Kingdom in particular.

We saw a very spirited and technically competent resistance by the Ukrainians. This was very important because they showed that the Russians could be beaten on the ground by targeting their supply lines. The Russians were briefed that they would be met with open arms, that the Ukrainian people would be throwing flowers beneath the tracks of their tanks, but what actually happened was a spirited and militarily effective attack against the Russian war machine, which targeted supply lines, which targeted its tactics, which demoralised its soldiers, which blunted its offensive, which prevented the removal of the civilian leadership and consequently the takeover of the country.

All of that has come at a huge military cost. All of it has come at a gigantic economic cost. We are now seeing that economic cost ripple throughout the world, including in the price of food in the Middle East because Ukraine is not just the breadbasket of Europe; it is the breadbasket of the Middle East as well. Those grain shipments are now starting to flow again through the Black Sea by agreement, but we did face a very real prospect of famine in the Middle East.

We have seen escalation in the cost of timber. Builders would have seen that here, partly generated by the amount of timber that used to go out of Russia via the Baltic states. Our international supply chains are now all interlinked. We here in Australia are suffering from timber shortages and steel shortages and the like. Part of that is Chinese ports not operating properly because of pandemic lockdowns, but part of it is also the demand for timber generated in Europe because of the sanctions on Russia.

We have seen huge economic costs, and of course gas and oil are the most critical ones. In Germany now, the Russians have just notified the Europeans that the Nord Stream 1 gas pipeline will be closed. It will not reopen. It was closed for maintenance and it is going to stay closed. Putin is on the last roll of the dice now to try to starve Europe of gas and push them to a breaking point by which they might stop funding and giving military assistance to Ukraine at the threat of massive economic dislocation to achieve a foreign policy end.

Of course, what that presents is, again, a breakdown of the post-World War II international order, a return to autarky in the case of Russia, which is a perilous course for any nation to take. There is no nation in the world that is self-sufficient in every single thing, and we are now seeing that play out in international supply lines. There are also the civilian costs, with waves of refugees and 7.1 million people having been displaced in Ukraine, and we are starting to see some of those people come here—children, women, families. It is gratifying for the Australian nation to welcome them, but of course it would have been better if we did not have to, if those people could stay in their homes and not have to flee before the Russian war machine.

What we ask now is: how do we do our bit? Do we send aid? I am certainly a great believer in the national government sending more military aid. I think we could certainly send more artillery pieces and probably more armour; I think those two things we could do a great deal more of. We should definitely think of ourselves as an arsenal for democracy, to borrow a phrase from Franklin Delano Roosevelt, and we should provide money to the Ukrainian states so they can withstand this very difficult period in their history.

They look to us, to the Free World, and Australia has never in our history not come to the aid of countries whose sovereignty has been impinged. Most recently, the Agent-General picked up some soil from Dernancourt in France and was a participant in delivering that to Australia. Dernancourt was where Australian soldiers fought and died to protect the liberty of France against another form of imperialism and aggression. We have always done that. I think we should continue to do that.

The Treasurer has brought a very sensible bill to this house which gives Funds SA a mechanism by which we can play our part by divesting of Russian assets, by divesting of those economic instruments which might send a message, just another one of the messages, to Russia that their behaviour is completely unacceptable and will not be tolerated. We just have to keep doing this, because there is no doubt that this is an absolute contest of will. People should not be under any misunderstanding: this is a contest of will.

Putin believes that the Free World is weak, that democracies are weak, that they will break, that we only care about our self-interest. It is the same calculation that was made by other fascist and authoritarian states. Where we see debate, where we see the sensible contest between political parties and civil society, they see weakness and inability to act.

Time and time again they have been proven wrong. They were proven wrong by the United Kingdom in World War II. They were proven wrong when Franklin Delano Roosevelt overcame the forces of isolationism in the US. They will be proven wrong today as well, but we have to hold the line and we have to do our bit. We have to redouble our efforts. We have to keep our interest. I know that the Premier feels this most sensitively because his grandparents fled Soviet imperialism, the occupation of Lithuania, and they came to the Free World.

We cannot have the Free World in retreat and authoritarian aggression in advance. We have to be prepared to do our bit—take refugees, stand in solidarity with the people of Ukraine—to get out of the economic world of Russia because that sends a message to the Russians. It is interesting looking at the Russian economy. It is a mirror image of the German economy. The German economy provides all the machine tools and provides a lot of advanced manufactured goods into Russia, and they get gas in exchange. That economic relationship is breaking down; it has broken down. The Germans have had to do a mea culpa and realise that that was not a wise thing to do and they have had to restructure their economy.

We are doing our bit, our little piece. We are dealing with supply-side inflation and, as I said, it is the first time we have seen that in my lifetime. I think I was born during the last bout of supply-side inflation; we know that was for other reasons. But we know that the impact of war in Europe does have an impact on prices flowing through here, on energy prices in particular. We have to be prepared to make that sacrifice so that the world can be free, so that Ukraine can have its own sovereignty, can decide its own foreign policy, be part of Europe and resist the aggression of the Russian state.

The whole purpose of Putin's invasion is one of defensive aggression. He knows that if there is a democratic state on the edge of Russia, that is European in its character and believes in the rule of law, the protection of individuals, the protection of citizens and is stable, then it is the worst example he can have on his doorstep for his own people, because sooner or later the Russians will wake up and realise they do not have to have a tsar. They do not have to have a regime where if you are not simpatico with it they will kill you, or you will meet some unfortunate accident in some way, or you will be assassinated in another country. He knows that the minute that example is right there on his doorstep, the Russian people might choose democracy themselves.

That is why this is a contest of wills and that is why this is so important. It is important for the freedom of Europe, it is important for the people of Ukraine and we are doing our small part, led by the Premier and the Treasurer, in a very sensible bit of legislation that I have no doubt will have the support of this house. Hopefully, we can light the beacon of liberty here in our own state and the people of Ukraine might find some solace and some solidarity in that.

Mr HUGHES (Giles) (16:15): I also rise to add a few words in support of the Superannuation Funds Management Corporation of South Australia (Investment in Russian Assets) Amendment Bill.

The member for Taylor has covered it well. This is incredibly important. This bill is a small element. No-one is pretending that in the overall sense it is a massive tangible form of support, but at a state level you do what you can and we should not see the superannuation money generated here invested in Russian assets. The national government needs to continue doing what it is doing when it comes to the provision of arms and support for Ukraine.

I am staggered that I am here today speaking about something like this. When the so-called exercises were going on on the border of Ukraine, I thought, 'They're not going to invade.' Just like a lot of people globally I thought, 'They are not going to do this. This is just madness.' But they did it and the justification is just absolute BS. It is talking about the denazification of Ukraine. What absolute rubbish.

If anything, Putin has taken a page out of the playbook of the Nazis. If there is something comparable in history it is with the Nazis. The same sorts of lines were used when the Nazis initially took over part of Czechoslovakia. That was about the Germans in that part of Czechoslovakia being oppressed by the people of Czechoslovakia. It was nonsense and it was just an excuse to start the invasion. Of course, the same type of line is being used by Putin, that the Russian people in Donbas and Crimea were being hard done by and 'we need to go in and protect them'. It is absolute nonsense.

I think the member for Taylor hit the nail on the head when he said that the last thing that Putin wants on his doorstep is a functioning, open, democratic society. That is why this is so incredibly important—and it is going to be incredibly difficult, as I am sure there is going to be a winter of discontent in Europe coming very soon—that those open, democratic societies hold the line. Putin cannot be allowed to win.

Even if it is a partial victory, even if it is just to take over a part of Ukraine, it cannot be allowed to happen because the message that sends is an incredibly bad one. Around the world we are already seeing the rise of authoritarian regimes, in some cases regimes that were totalitarian, that seemed to be opening up, such as China, but of course that did not happen; it is still a totalitarian regime, which now threatens Taiwan.

We have seen in Eastern Europe one or two countries also start to shift in that authoritarian direction and of course Russia itself, with the recent passing of Gorbachev, one of the singular people in history who made a difference and the hope that was invested that Russia would become an open and democratic society. That is not the case; we have a deeply authoritarian government. As the member for Taylor said, as a matter of routine opponents disappear or are killed. There is no freedom of the press in Russia. Journalists die on a regular basis. There is very little now in the way of independent media in Russia.

In some ways that brings us to what is going to be incredibly important in Europe. The member for Taylor mentioned the Nord Stream 1 gas pipeline, that conduit for energy between Russia and Germany and other countries. The Russians have now made it abundantly clear that gas is not going to flow until western sanctions are lifted, so Europe is going to be in a world of bother. But it is incredibly important that it does not succumb, that it does not weaken in the face of nasty Putin. They need to hold the line.

When we talk about the freedom of media in western countries, I think we should be paying some attention to the element of social media—if you can call it media—where it is all care and no responsibility. Putin and his acolytes will be using social media in Europe to create as much division and dissent as they possibly can, and it is time that the social media platforms were held to serious account for the information and the misinformation they have a habit of propagating.

It is not going to be an easy time in Europe and it is a lesson, in a way, to all of us. We had some of these lessons through COVID, including not being incredibly reliant upon one country or maybe two when it comes to sovereign manufacturing capacity. Europe made that deal and Germany especially made that deal when it came to relatively cheap gas from Russia. It was a mistake and it is now seen as a profound mistake. Europe needs to diversify its energy supplies and Australia might well be a major beneficiary of that, given that the other approach Europe had was to decarbonise. It might put countries, such as Australia, in an incredibly fortunate position if we can develop commercial-scale green hydrogen.

But let's focus on Ukraine. The number of people internally displaced is now over seven million and the destruction continues. Thousands have died. Five million people from Ukraine have gone to other countries and at the moment Poland is shouldering the greatest burden, with three million people in Poland. It is those states that border or nearly border Russia that have been voicing concerns now for a number of years and, as the member for Taylor said, there was a degree of complacency: 'No, it is not going to happen.' Well, it has happened and it is for all of us in our small ways and in our big ways to do whatever we can to ensure Ukraine is protected.

Of course, the important element is the provision of arms. We are going to have to continue to provide arms. There is no other way. Putin wants to use what is going to happen in Europe this winter to put on enormous pressure and it will be enormous pressure that the governments of Europe are going to face.

We are far away but we still need to do all that we can commensurate with our size and with our resources to support Ukraine and to open our borders to the people of Ukraine who need to settle somewhere else for a period. No doubt some will end up being permanent residents. We need to support those countries that are shouldering a burden when it comes to refugees.

In a lot of respects, it appears that the sort of struggle we are engaged in has a long history. We have faced totalitarian regimes before, whether it is the Soviet Union, whether it is China, or whether it was Nazi Germany in the past. I remember many years ago, because I had an interest in science, I ended up reading a lot of Karl Popper. He wrote something that was more about political philosophy than scientific philosophy. It was about the open society and its enemies.

I have to say that it was a book that changed my view about a number of things. The arguments presented way back then—and it was written in 1945, at the tale end of the Second World War—were about flying the flag for those societies that were not perfect but that were capable of improvement, incremental and otherwise.

It was those societies that were open, democratic societies, because the values that those societies embodied are just so incredibly important. When you look at the alternative, when you look at what is happening in Russia, when you look at what is happening in China, and when you look at what is happening in a number of other countries around the world it is for us all to back what has been developed in a whole raft of nations over many years.

It is societies that actually value dialogue and dissent and deliberation and decision-making based upon that dissent, that deliberation, that dialogue and that ultimate decision-making, because they are powerful societies and societies that are worth making an incredibly strong stand for. That is why we need to do all we can to back Ukraine in its hour of need.

The Hon. K.A. HILDYARD (Reynell—Minister for Child Protection, Minister for Women and the Prevention of Domestic and Family Violence, Minister for Recreation, Sport and Racing) (16:27): I, too, rise to speak in support of this bill. Like all of us in this place and in our community, I have been devastated by recent events in Ukraine and the atrocities that from afar we see being perpetrated on so many people.

My heart goes out to the people of Ukraine who are suffering as they, their families, homes and communities continue to endure the most horrific attacks. I think of them with love and compassion, and I am constantly inspired by their strength and their resilience. In the face of such devastating adversity they are extraordinary.

The horrific attacks and the outrageous breaches of human rights perpetrated by Russian aggression have resulted in the loss of thousands of lives and a humanitarian crisis with approximately 7.1 million people since the invasion of Ukraine internally displaced, according to the Ukraine Internal Displacement Report issued by the Internal Organization for Migration.

According to the United Nations, over five million people have fled their homes desperately seeking safety and peace in neighbouring countries. Also, according to the United Nations as of late April 2022, as the member for Giles has just articulated, Poland has opened its heart and its homes to take in almost three million refugees from Ukraine.

I am really proud of the fact that Australia has also offered safe haven for Ukrainians affected by the conflict, and that as a community we continue to warmly welcome those who have found their way to South Australia. Whilst we are so desperately sorry for the circumstances that have led the people of Ukraine to leave their homes, we welcome them with open arms. Our community is absolutely enriched by their presence.

Many countries around the world have rightly imposed tough economic sanctions on Russia in response to their awful acts of aggression. Many are banning new investments in Russia, freezing the assets of Russian banks and sanctioning Russian financial institutions. Australia has rightly 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.

The current situation in Ukraine and resulting Russian sanctions highlighted that the current act does not have a mechanism by which Funds SA can be directed by the government to divest Russian investments. I am really proud of our commitment to amend the Superannuation Funds Management Corporation of South Australia Act 1995 to enable ministerial direction to remove state government funds from Russian assets.

When in opposition, Peter Malinauskas vowed that a Labor government would act swiftly to remove state government funds from Russian investment, stating:

We know this is the right thing to do. It is unconscionable for state government funds and public sector workers' superannuation to be invested in Russian assets.

This bill brings that firm commitment to life. The amendments contained in this bill will enable this to occur in a sensible manner that specifically targets Russian-held investments and enable a direction by the minister for the divestment of Russian assets.

As a former board member of two superannuation funds, I understand and wholeheartedly support the importance of superannuation exercising leadership in responding to and tackling issues our community and world confront and driving ethical investment. These legislative amendments are about supporting Funds SA to do so and ensure that funds are ethically invested.

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 a clear need to enable a direction by the minister to Funds SA for the divestment of remaining Russian assets. The amendments contained in this bill enable us as a government to do what is right, what the public expect of us, and that which signals to the world that we are prepared to act with compassionate and decisive leadership. I commend this bill to the house.

Ms HOOD (Adelaide) (16:32): I rise to speak on the Superannuation Funds Management Corporation of South Australia (Investment in Russian Assets) Amendment Bill. All around the world we have seen the devastating impact of Russia's aggression towards Ukraine and its citizens—the loss of life and creation of a humanitarian crisis causing approximately 7.1 million people to be internally displaced and five million people to flee to neighbouring countries. My heart goes out to the Ukrainian people and my condolences to those who have lost loved ones and who are separated from their loved ones.

South Australia should be proud of the work we have done to welcome Ukrainian refugees into our community. The journey of having to leave your beloved country for a new one is not something that many of us have lived through or will ever live through. I can only imagine what it is like having to escape your home to a completely new one without even knowing the language. Just recently I met Victoria, a Ukrainian refugee who arrived in Australia back in April after escaping war-torn Ukraine.

I am proud the Malinauskas Labor government is supporting refugees like Victoria in starting a new life, with the assistance of TAFE courses to overcome language barriers. The Minister for Education and I recently visited a foundation English TAFE class in Currie Street and met with more than 60 refugee students. It was an incredibly emotional experience; they were just so incredibly impressive and resilient. I want to give a huge shout-out to their lecturer, Tamara, who is fluent in Ukrainian. She has become somewhat of a mother to that group and is giving them so much comfort and support.

Much like other countries around the world, our government has imposed tough economic sanctions and has already prohibited the import of oil, refined petroleum products, natural gas, coal and luxury products from Russia. To remove South Australian support from these Russian industries is to stand up for our South Australian Ukrainian community, which is why it does not make sense to continue to invest our state government funds in public sector superannuation into Russian assets. How can we make war-torn refugees like Victoria truly feel welcomed and supported in our beautiful state if we do not put our money where our mouth is?

To divest our funds in Russian assets in a sensible manner is the right thing to do, and it sends the right message to Ukraine, our Ukrainian arrivals, as well as the existing South Australian Ukrainian community. We stand with you and we support you. I am pleased to support this bill to enable sensible divestment that specifically targets Russian-held investments.

S.E. ANDREWS (Gibson) (16:35): I rise to speak in support of Superannuation Funds Management Corporation of South Australia (Investment in Russian Assets) Amendment Bill 2022. I am proud of all the work the union movement has achieved, particularly the eight-hour day, work health and safety legislation and compulsory superannuation, which was created by workers for workers. It is about fairness and a decent standard of living, but any investment into Russian assets as a part of this is unconscionable.

The events in Ukraine perpetrated by Russian aggression have resulted in the loss of thousands of lives and a humanitarian crisis, with approximately 7.1 million people internally displaced since the invasion of Ukraine, and over five million have fled to neighbouring countries, according to the United Nations. In addition, as of late April 2022, Poland has taken in almost three million refugees alone from Ukraine, an incredible number of people to support.

Most countries around the world have imposed tough economic sanctions on Russia to respond to their acts of aggression, banning new investments in Russia, freezing the assets of Russian banks and sanctioning Russian financial institutions. In addition, Australia has prohibited the import of oil, refined petroleum products, natural gas, coal and other energy products from Russia as well as prohibiting the sale or transfer of certain luxury goods.

The current war in Ukraine and resulting Russian sanctions highlighted that the current act does not have a mechanism by which Funds SA can be directed by the government to divest Russian investments. The opposition, during the 2022 state election campaign committed to amending the Superannuation Funds Management Corporation of South Australia Act 1995 to enable ministerial direction for the removal of state government funds from Russian assets.

It is after a lifetime of work that all Australians deserve a comfortable retirement. For most people, their superannuation will play an important part in helping them secure a modest lifestyle. They have worked so hard, committed so much, and their super investments should be ones they are comfortable with. Today, almost every worker has the right to their own superannuation account, but that right would not exist had it not been for the campaigns fought by union members in the 1970s and 1980s.

Superannuation initially was deeply unfair, with fewer than one in four women and blue-collar workers having an account. High income earners, such as permanent public servants and full-time white-collar workers, were more likely to have superannuation. But, thanks to the campaigning and hard work of union members, a system of compulsory superannuation began operating in 1992. Unions also played a part in establishing industry funds. These are low-cost profit-to-member superannuation funds dedicated to putting the interests of members first.

Today, approximately five million Australian workers are members of industry funds, and these funds manage hundreds of billions of dollars of workers' contributions. Funds SA is the primary investment facilitator for public sector super funds. 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 a clear need to enable a direction by the minister to Funds SA for the divestment of remaining Russian assets. This bill addresses these concerns, and the amendments contained in the bill enable the divestment to occur in a sensible manner that specifically targets Russian-held investments. The amendments contained in this bill enable us, as a government, to do what the public expect of us. Whilst in opposition, leader Peter Malinauskas vowed that a Labor government would act swiftly to remove state government funds from Russian investment, stating:

We know this is the right thing to do. It is unconscionable for state government funds and public sector workers' superannuation to be invested in Russian assets.

The amendments contained in this bill will enable this to occur in a sensible manner that specifically targets Russian-held investments and will enable a direction by the minister for the divestment of Russian assets. I commend this amendment bill to the house.

Mr ODENWALDER (Elizabeth) (16:40): I rise to make a brief contribution to this bill, the Superannuation Funds Management Corporation of South Australia (Investment in Russian Assets) Amendment Bill 2022. I am no expert, and I listened with interest to the first of our speeches today, particularly from the member for Taylor, who outlined very succinctly the geopolitical forces we are dealing with, or particularly Europeans are dealing with, at this time. He made the very pertinent point that these types of people, people like Putin, people like other fascist and totalitarian dictators, simply will not stop.

They will not be appeased. We learnt this—well, we hoped we learnt this—in World War II and we are learning it again now. Hopefully, we have learned those lessons and we are behaving in a way that shows that free, liberal, democratic societies will not bend to fascist totalitarian dictatorships. This bill, and the actions of this government, and hopefully this parliament, reflect that we in our small but vocal corner of the world can add to that resistance.

I am proud to be a member of this government for many reasons, but rarely have I been prouder than the moment our leader, the member for Croydon, the Premier, stood up at an event (I cannot remember if it was a press event) where he was asked some questions and he came out very strongly, very strongly indeed, about the need for a bill like this and actions like this to show that, first of all, we will not stand for totalitarian aggression, Russian aggression.

We all have an interest here, as we all pay into a state superannuation fund, as the member for Gibson articulated. We all have an interest and so do many thousands of workers. There is no way that our funds should be used to prop up and facilitate wars of aggression that are so counter to the ideals of the United Nations that we all claim to hold dear. I was very proud when Peter Malinauskas stood up at this event and articulated the Labor Party's position before the election on this and promised a bill of this sort. He went on to say:

We know this is the right thing to do. It is unconscionable for state government funds and public sector workers' superannuation to be invested in Russian assets.

This bill, which I hope will pass, will go into committee stage shortly, as I understand that the opposition reasonably has questions. I hope that we will all join together in passing this bill and sending not only a message but also a very clear financial signal that we will not tolerate this sort of behaviour.

Again, the member for Taylor articulated very strongly that this sort of aggression should not be tolerated, but he also very correctly pointed out that there were signals coming not only from the US and the UK, and clearly from Ukraine, but also from within Russia, from within what we would call in a liberal democracy an opposition but which we might more reasonably call a resistance to Putin and his fellow aggressors.

I want to quote at some length from an article by Alexei Navalny, a senior figure in that Russian opposition, who was himself a victim of the dark statecraft that Russia employs across Europe and that it has employed for many, many years, or at least since the Cold War. He gave very clear signals at the time that Russia would not stop—or more particularly Putin, because I do not want to mix Putin up with the Russian people who, one must assume, are largely not in favour of this kind of aggression. I will quote from him:

Exactly one year ago, I did not die from poisoning by a chemical weapon, and it would seem that corruption played no small part in my survival. Having contaminated Russia's state system, corruption has also contaminated the intelligence services. When a country's senior management is preoccupied with protection rackets and extortion from businesses, the quality of covert operations inevitably suffers. A group of FSB agents applied the nerve agent to my underwear just as shoddily as they incompetently dogged my footsteps for three and half years—in violation of all instructions from above—allowing civil investigating activists to expose them at every turn.

To be fair, a regime based on corruption can perform more elementary tasks to perfection. The judicial system—the first thing autocrats intent on robbing their nation take control of—functions perfectly on a quid pro quo basis. That is why, when I went back to Russia after medical treatment, I was taken straight from the plane to prison. There is not much to celebrate in that, but at least I now have time to read the memoirs of world leaders.

In those books, the world's leaders write terribly interestingly about how they solved the main problems facing humankind: wars, poverty, migration, the climate crisis, weapons of mass destruction. These are the issues on the 'big agenda'. The fight against corruption, on the other hand, rarely figures as part of what they hope will be their legacy. This is not surprising; it is a 'secondary agenda' item.

Amazingly enough, though, corruption nearly always merits a mention when the world's leaders are describing failures—whether their own or, more commonly, those of their predecessors.

'We spent years, hundreds of billions of dollars and thousands of human lives in Iraq…but the corrupt government of al-Maliki [or Karzai, you name them] alienated the people with its thieving, opening the path to victory to radicals armed with slogans about honest, fair government and RPGs.'

This leads to an obvious question…if corruption is preventing us from finding solutions to the problem of the 'big agenda', has the time perhaps come to raise it [to] a priority on that agenda?

It is not difficult to see why that has not already been done. Corruption is a tricky issue to discuss at global summits. Suppose you are discussing Syria and cyber-attacks with Vladimir Putin. Everyone finds it interesting, everyone knows where they are. At the concluding news conference everyone will have something to say.

Now imagine a meeting with Putin on the issue of corruption. The very fact it has been raised represents a move to personalities. The whole thing, from start to finish, is awkward. The richest leader in the world, who has fleeced his own country, is being invited to discuss how to deal with the problem of himself. Very tricky, very awkward.

Now turn on the news. It is precisely the fact that the West 'failed to notice' the total corruption in Afghanistan—that Western leaders preferred not to talk about a topic they found embarrassing—which was the most crucial factor in the victory of the Taliban…The West did not want to discuss the plundering of the budget; it was much better to focus on people being stoned to death or execution by beheading.

After the implosion of the USSR and the end of the global ideological confrontation, it was corruption—in its classical definition, 'the exploitation of an official position for personal gain'—that became the universal, ideology-free basis for the flourishing of a new Authoritarian International, from Russia to Eritrea, Myanmar to Venezuela. And corruption has long ceased to be merely an internal problem of those countries. It is almost invariably one of the main causes of the global challenges that face the West.

Navalny then poses a question:

A new 'hot' war in Europe with the use of air strikes and artillery? That is Putin taking revenge on Ukraine—

and this is August 2021, before a single soldier had been mobilised—

for the anticorruption revolution that deposed his protégé Viktor Yanukovych. Religious extremists of all stripes find it easier to conduct propaganda when their opponents are driving Rolls-Royces through the streets of penniless countries. Migration crises are caused by poverty, and poverty is almost always caused by corruption.

'It's just as well climate change is unrelated to corruption!' you may ironically reflect. I invite you to say that in the face of the millions of hectares of Siberian forest that burn every year because of barbaric total clearance, violating the fire regulations for forest management. I am reluctant to make this prediction, but fear the next big terrorist attack will not be just another bomb blast by religious fanatics but, for example, a chemical weapon in the water supply network of a major city or a devastating attack on the IT infrastructure of an entire country, and that those commissioning the terrorism will be one or other of the people in possession of a golden palace. The reason for perpetrating it will be to divert the world's attention from golden palaces to global security issues.

So it is not we who should feel awkward about confronting corrupt authoritarians with tough questions and getting personal but, on the contrary, they who should know that their shady dealings will invariably be the main focus of discussion at world summits. That would be a crucial step towards eliminating the root cause of many 'big' issues.

While we have, at last count (and this was a while ago now) somewhere around the vicinity of 7.1 million people displaced in Ukraine as a result of Russian aggression, and while we have many, many thousands dying and continuing to die each day—and the new cycle ebbs and flows—it is incumbent on all of us to do our bit, however small.

Australia, of course, has prohibited the import of oil, refined petroleum products, natural gas, coal and other energy products from Russia and it has prohibited the sale and supply of certain luxury goods, and this of course is to be commended. I, too, stand with the member for Taylor in that I believe that there is always more that the Australian government could do in terms of the armament of Ukraine and the military support of Ukraine in their fight against Russian aggression.

In the case of this bill, I do commend the Premier and the Treasurer for bringing it to the house. It is important that we all, in our small way, contribute to the fight against aggression in whatever form it might take, and financial warfare is often the most effective in dealing with authoritarian dictators. I commend the bill.

Mrs PEARCE (King) (16:52): I, too, rise to speak on this bill. I am sure that no-one in this place would disagree that the events in Ukraine perpetrated by Russian aggression are nothing less than devastating. It is immoral, a violation of international law and it needs to stop. I am so proud that this government has taken a stand. Too many lives have been lost, too many people have been displaced and too many people are now in dire need of humanitarian assistance. I cannot begin to fathom the extent of the trauma that has been experienced and, like many in my community, would like to support Ukraine in any way possible, and it starts with this bill.

The legislation before us today will send a clear signal to Russia and its supporters that Russia's actions have severe political, economic and reputational consequences. We cannot be investing money into this country as these atrocities occur. It is clear that our stand has been noticed, as shortly after introducing the legislation our Premier was blacklisted by Russian President Vladimir Putin, which means he cannot visit Russia. Since then, I understand there have been others in this place who have also made the list.

It just goes to show that we will not be bullied. Our Premier has stood firm and this government will continue to stand with Ukraine. This legislation bans state government investment in Russian assets, which will give us the power to divest $60 million worth of South Australia workers' super held in Russian assets by Funds SA. It was something we promised to do and something we have prioritised as we understand how much it means to our state.

But we have not stopped there. We have sent medical equipment to Ukraine to support local hospitals and healthcare workers to provide emergency care to thousands of wounded civilians. These items included laryngeal masks, first aid, wound dressings and pulse oximeters. We are also welcoming Ukrainian refugees and advocating to take in more, and we are supporting them to start a new life here in South Australia not just with language skills but with a support system in place that encourages community and opportunity, because our community expects no less.

We do not want to watch in horror what is happening and sit idly by. I must say that I have been impressed by the many things I am seeing in my community to support Ukraine. There is a fantastic stallholder at the One Tree Hill market who makes her own earrings. In support of Ukraine, she made heart studs in their colours to raise awareness and show her support. In fact, I have worn these earrings in this place before and would have today except little miss decided she liked them too and broke one by accident. I hope to visit her stall again next month to get a couple more replacement pairs, just in case.

I also have a community centre in Salisbury East whose members took the time to sit down with me to share their desires and plans to support Ukrainian families to settle in. One of the members there is Ukrainian and is absolutely determined to ensure that they receive as much support to settle in as possible. They are offering a coffee and a chat every Monday between 10am and 12pm for anyone who is interested. If you are near bus route 560 or 502, just hop off at stop 46B.

Then there was the way local businesses, sporting clubs and residents rallied together to raise much-needed funds to support displaced families in Adelaide at a recent dinner at Sfera's hosted by the Association of Ukrainians in SA. What a night that was! The Volya Ukrainian Cossack Dancers were incredible, and I do not think there was a dry eye in the place when some of the displaced families took the time to share with us their harrowing experiences.

I thank the many members of parliament, including the Minister for Multicultural Affairs, the member for Florey, the assistant minister to the Premier, the member for Playford, the member for Newland, the member for Makin and others, who were in attendance to show their support in the north-east that evening. I am proud of all the efforts being shown to support Ukraine at a local, state and national level. We do it because we know it is the right thing to do and, with that, I commend this bill to the house.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

Mr COWDREY: As we enter committee, I take the opportunity to reconfirm the remarks that were made prior to the winter break in regard to this bill. I also reconfirm the opposition's support for the bill brought here today. Also, prior to the commencement of questions, I would like to make it clear that any questions put forward by the opposition are to try to seek some further clarity in regard to the operational aspects of the bill, and by no means are they intended to have any reflection on our support for the intent and prospects of this bill.

I begin with a question in regard to clause 1, which I imagine the Treasurer will be able to answer reasonably quickly. Who was consulted prior to the introduction of the bill to the house?

The Hon. S.C. MULLIGHAN: I thank the member for not only his question but his approach and support for what the bill is trying to achieve. Following the election, most of my efforts in terms of consultation were undertaken primarily with Funds SA and to a lesser extent the Department of Treasury and Finance.

Mr COWDREY: In regard to the bill, is the Treasurer able to identify for the committee what he would anticipate to be the level of conflict or the threshold that he would imagine the government would recognise as meeting similar legislation in regard to a direction to Funds SA into the future?

The Hon. S.C. MULLIGHAN: I cannot be specific about that. Perhaps one way in which I can answer that question is by reflecting on this circumstance and the fact that this is, as far as I am aware, the first war being fought on continental European soil, as I understand it, since World War II, which is clearly a first in my lifetime and also the experience of many not only South Australians but also Australians and people around the globe. The literal shock that many of us experienced when Russia took the extraordinary decision to invade Ukraine meant that there was an appetite to understand what sort of action a jurisdiction like South Australia might be able to take in this regard.

This is not the only action. There are a lot of other efforts that are going on both within government and across the broader South Australian community, particularly in terms of supporting the local and international Ukrainian population: messages of support, providing humanitarian aid where possible and so on. I think what quickly became clear was that there was to be a consideration by other countries of financial sanctions, amongst other sanctions, and that Australia, at both the national and subnational jurisdictional level, had a high appetite for participating in those sorts of activities.

In that respect, given that a large proportion of the global community was acting in this same way and that there was an appetite across global financial markets for this sort of activity, that was really what triggered us. I would hope there is not a need for this sort of activity again in the future because perhaps that might signify that we would not see this sort of broadscale global conflict again.

As I am sure the executive of Funds SA, let alone the board members, appreciate even better than I, this activity is not entered into lightly because it creates an inherent tension between the role of the executive and the board of Funds SA being able to act in a completely unfettered manner with the management and investment decisions of funds under its control, aside from what we are dealing with today—that is, a fetter of that activity and a control of that activity. That is perhaps the best way I can answer that for the benefit of the member and the house.

Mr COWDREY: What mitigating actions, if any, were taken to ensure that the bill adheres to the principles of trustee government under the Superannuation Industry (Supervision) Act 1993?

The Hon. S.C. MULLIGHAN: That is a good question because it goes to the heart of the inherent tension that I obliquely referred to before. Of course, rightly so, fund managers are subject to pretty rigorous regulation at the national level. Fundamentally within that, and also with the obligations of directors of an organisation like Funds SA, there are fiduciary obligations that board members have under the Corporations Act.

Part of the challenge of being able to draft this bill was trying to ensure that there were no intrusions on the requirements and the provisions of those regulatory entities insofar as they relate to board members but at the same time give effect to the sorts of activities that I spoke about in my previous answer; that is, sovereign nations and financial organisations within those nations are able to take activities like this to separately and collectively place financial pressure on Russia.

We think we have the balance right. It was something that was certainly discussed between me and the executive leadership of Funds SA and the leadership of the board to make sure that we enabled the corporation and those individuals who had responsible roles in the corporation to discharge their duties consistent with those regulatory requirements but that we could give effect to the sorts of actions that the community expected of us.

Mr BASHAM: What concerns did the board and management of Funds SA raise with the government about the impact of investment returns and potential conflict with the terms outlined in the heads of government agreement?

The Hon. S.C. MULLIGHAN: That is a good question. There are two elements to that. The concern about investment returns is that, if there were an overt direction, if I can put it like that, to take a particular course of action, regardless of other considerations that the board might otherwise have, that could lead to the board taking action that would engender a financial loss to the corporation. For example, if there were a blanket requirement that any interest in an asset that could be conceivably called Russian had to be immediately divested, regardless of the circumstances or consequence, that would absolutely heighten a risk of incurring financial losses.

As members opposite might appreciate, I tried to be quite up-front that there are both directly held investments, where in theory the corporation can make a direct decision about how to deal with those investments, and there are indirectly held interests in assets that could be described as Russian, where divestment is not quite so possible.

For example, we may have an interest in a pooled fund and within that pool of assets that that investment fund holds there may be a number of assets and it is, by definition, impossible for Funds SA, only having a partial interest in that fund, to reach into that pool of assets and divest itself of those particular Russian assets. If there had been a direction, for example, in that circumstance where Funds SA was immediately required to divest of that particular asset, that would certainly heighten the risk of an investment loss.

Feel free to jump up and refresh me if I get this wrong, but I think the first part of your question was about a conflict that a board or board members may have—

Mr COWDREY: Any concerns.

The Hon. S.C. MULLIGHAN: Any concerns. The concern was—perhaps I have made a Freudian slip there—that there would be a conflict or a tension with the board's fiduciary responsibility to the corporation. The overall task of Funds SA is to try to maximise returns on stakeholders' funds that are invested through the corporation. There could be a tension between that obligation and then a direction from the parliament or from the minister to take action, which would be at significant variance to that.

I think I am right in saying that that was a principal concern that was raised in the consultation, and it became a challenge. Hopefully, what you see before you is a demonstration that it was not an insurmountable challenge, but it became a challenge to get the drafting of this right so that we did not inherently compromise the Funds SA directors, let alone its executive management, in being able to carry out its fiduciary obligations to the corporation let alone their obligations to stakeholders in the corporation.

Mr BASHAM: What will be the result for the corporation if it is unable to comply with the directions in subclause (5)? What will be the result if the corporation cannot comply with that?

The Hon. S.C. MULLIGHAN: If I jump ahead in the bill, clause 3 tries to set out, I guess, for want of a better term, a chain of reasoning or an approach to how such a direction may be given effect. Clause 3 new subsection (3) talks about a ministerial direction specifically being about this current circumstance that we are talking about with regard to Russian assets.

However, the protection for those fiduciary obligations of members of the corporation, both board members and also the executive, is in clause 3 new subsection (4), which requires that any action taken by the corporation in accordance with the direction under new subsection (3), that is, a direction from the minister, must be taken prudently and consistently with the corporation's responsibilities to the entities for whom it invests and manages funds.

The corporation is still allowed a discretion in trying to carry out that direction from the minister that it only does so prudently and consistently with the obligations it has to shareholders' funds. That, I think, is an important protection for the board and for the executive in not thrusting them into a course of action they would feel is imprudent or not in accordance with their obligations either legally or what they understand to be their obligations to their shareholders.

Mr BASHAM: For clarification, I am trying to understand what their actions are if they are unable to get rid of those funds.

The Hon. S.C. MULLIGHAN: I am sorry. I apologise to the member for Finniss because he did say that in his initial question. I do not think I answered it. Perhaps I can answer that by admitting that we are confronted with that very circumstance right now, for example, with regard to some of the pooled funds that Funds SA has an interest in.

We are also, as I understand it, confronted by this in some respects because if Russian assets are frozen, if there are onerous financial sanctions on Russian financial assets, then it is impossible to trade in them. So, if you try to sell something you clearly need a buyer for it, and if there are broadscale sanctions on Russian assets it is very difficult, if not impossible, to find a buyer for those assets.

In some circumstances with regard to some asset holdings, the corporation is confronted by this at the moment in the same way that other jurisdictions and other funds are undertaking exactly the same efforts are stuck with this as well. So, where does it leave the corporation being unable to discharge that legal obligation here? Some may disagree with this assessment. I would like to think that the protection provided in new subsection (4) in clause 3 enables them only to take that activity when it is prudent.

It may be possible to find a buyer for Russian assets in the circumstance where Western countries and funds, and interested financial parties located in Western countries, are unwilling or unable to purchase those assets. It may still be possible to find a buyer outside of those Western countries and outside of those sorts of funds. For example, you may be able to find a buyer for them in a country or with a fund that is aligned more to a Russian interest than to a Western interest, if I can put it like that. But that may not accord with what the board and the executive feel is a prudent way of divesting of those assets.

Mr BASHAM: What is the current level of divested funds?

The Hon. S.C. MULLIGHAN: The current valuation of all assets, I understand, is $10.6 million; that fluctuates. For example, when this issue was first raised publicly before the last state election, the previous Treasurer put a figure out of $60 million. A couple of things have happened since then: there has been some level of divestment, but there has also been a significant revaluation of the remaining assets.

As far as I understand it, the $10.6 million is largely, if not completely, a reflection of the value of the assets held within those pooled fund arrangements—the assets which we would class as being indirectly held. There are other assets which are still held by Funds SA directly that do not have any value at all—their value has been written down to zero—and that largely reflects the incapacity to trade in them to find a buyer for them, hence them having no value.

To clarify, while my answer was correct for the directly held, for the pooled funds there is a combination of assets which have some value contributing to that $10.6 million, but there are also some assets held indirectly that have a value of zero as well.

Clause passed.

Clause 2.

Mr COWDREY: Treasurer, does this bill set a precedent for the government to direct Funds SA in the future around other issues?

The Hon. S.C. MULLIGHAN: Yes, that is a good question. That was a concern that the board and Funds SA had, and I had as well. That is why the bill has been drafted specifically with reference to Russian assets, to make sure this new capacity for a minister only relates to this circumstance with Russia. Certainly, if I can speak for the board and the executive, they would be highly uncomfortable with a minister having an ongoing general capacity to direct what investments are made.

I may be wrong in this, but when the legislation was first established for the corporation I think it has always been the case that the corporation and the board have been free from ministerial direction, so this is quite an incursion in that regard. As a general rule, as I have referenced before, I would be uncomfortable, whether it is me or somebody else, being the minister responsible having the power for direction outside this sort of very specific circumstance.

Mr COWDREY: What impact will the bill and associated direction have on other SA government superannuation schemes, for instance ReturnToWorkSA, Public Trustee, Police Super, ElectricSuper, SA Metropolitan Fire Service?

The Hon. S.C. MULLIGHAN: My advice is that ReturnToWork, the Public Trustee and the electricity industry superannuation scheme do not have their funds managed by Funds SA, so the impact on those organisations is not apparent. In terms of Super SA and the other organisations that do, each of those organisations have their own investment strategy. My understanding is they share the same investment strategy, they have the same exposure to international securities, and so the impact on them is the same as each other.

Mr COWDREY: As a point of clarification, for the three funds that were listed first—the ElectricSuper fund and the other two in the first class—is it possible that members of those schemes but also public servants, for instance, within those schemes still have superannuation investments in Russian assets that are not being divested under this direction?

The Hon. S.C. MULLIGHAN: With regard to superannuation funds—and, obviously, we can put ReturnToWork and Public Trustee to one side because they are a different type of organisation as they do not have superannuants—the electricity industry, I am advised, have a separate arrangement for managing their funds on behalf of their members, which is not conducted through Funds SA, but Super SA do, Police Super does and firefighters superannuation does. They are similarly affected by the exposure to international equities and within those international equities exposure to Russian assets. Because we have not divested of all of those assets and there have been writedowns to zero, or significant writedowns from previous values, to that extent they are impacted by these arrangements. Those superannuation schemes, by extension, have exposure to those and they have not yet been divested, for the reasons that I have articulated.

Mr COWDREY: If I understand the Treasurer's answers provided to date, if all the funds that essentially can be divested at this point in time have—mind you, without the legislation being enacted—how long does the government expect the power to direct will be required for?

The Hon. S.C. MULLIGHAN: I cannot be specific about that. We do not know how long the war is going to persist and what the outcome of that is going to be, for starters, but I guess the question is motivated by an interest in how long this arrangement is going to continue. Part of the reason for having new subsections (5) and (6) in clause 3 were to require the regular review of this, and not only for me to have a copy of that but for it to be in the annual report so members of parliament will see, at least on an annual basis, what is going on with the operation of this new regime.

I cannot be specific. If the war ends quickly then that may necessitate a change in strategy as perhaps there would be changes in financial markets, depending of course on what the outcome of the war is. However, while it continues, we certainly envisage the continued operation of this section, and obviously the irregular reporting requirement.

Should things change very significantly over there, where the Western world does not regard Russia in the same way that it is being regarded, then that perhaps might be a trigger for us and the other sovereign nations and subnational jurisdictions to change their approach, and perhaps we would repeal this section of the act at that time. In the meantime, that ongoing monitoring and reporting regime has been intended to try to provide all members and the community some comfort as to how it is operating.

Clause passed.

Clause 3.

Mr COWDREY: Could the Treasurer provide a little bit more detail in terms of the government's definition of 'divestment' for the purposes of the bill? I know we have spoken previously about the pooled funds, that the government has still been unable to divest themselves of shareholdings within those funds that are obviously independently managed.

In regard to the total funds that are being divested to date, are you able to give us an idea of the proportion of those funds that have effectively been devalued or written off, or where the portion of ownership for the state government has been valued at zero, and perhaps the portion of ownership for another player or party within that fund that has effectively taken ownership of that portion of the pooled fund? I imagine this is how this is being managed to an extent.

In terms of direct ownership, we are talking about non-liquid funds, I imagine. Are we are talking about infrastructure and other sorts of investments or all of the investment that remains effectively in pooled funds where we have not been able to write down or change ownership within the pool?

The Hon. S.C. MULLIGHAN: I need to be clear, in answering this question, that the figures I am about to quote are estimates. The reason I say that is not that we only have rough information: it is that our information is not current. It relies on us getting reports back from the fund managers that are engaged by Funds SA, and sometimes the information is weeks out of date.

So, of the directly held, three have been sold and 19 are left. When we talk about directly held investments, these are investments held in Funds SA's name that it is able to deal with directly. When we are talking about indirectly held, these are securities or investments that are not held in Funds SA's name, and the example I will use are pooled funds, which are constructed and managed by a third party. We might hold a number of units within that fund, but certainly not own it in its entirety.

There are 52 securities within a number of pooled funds; 21 of those securities have been written to zero value and 31 have some remnant value as at our latest update. That is where the $10.6 million of remnant value lies. It is not so much that the pooled funds are held in what you would normally consider to be illiquid assets like infrastructure or that sort of thing. I guess it is perhaps worth thinking through the illiquid concept: they are illiquid because you cannot deal with them. They are unable to be traded.

Mr COWDREY: As as a point of clarification, we have sold three of the directly held and maintained 19. We have attributed no value to those assets at this point in time, based on there not being a market, I assume. We have determined no value for them at this point in time?

The Hon. S.C. MULLIGHAN: Yes, that is largely right. The inability to trade in them is the contributing factor to them having zero value. Once liquidity returns to those parts of the financial markets, then their valuation will be reassessed. It is important to understand that that practice of providing zero valuation to them is, I am advised, I guess industry standard practice, but also consistent with Funds SA's own valuation policies.

Mr COWDREY: Does Funds SA have a view as to when they expect to have full divestment of those assets? Essentially, I imagine, without answering my own question, it is going to be dependent on when liquidity comes back to the market. If I could also add a second part to the question, going back to the definition of divestment, we talked about originally $60 million to $70 million worth of assets going down to now $10 million worth of value. Most of that is writedowns as opposed to actual divestment of the assets essentially, so for the purposes of this bill can you clarify how Super SA is regarding divestment in terms of there being net zero value to any assets held or divestment of all ownership?

The Hon. S.C. MULLIGHAN: It is a good question, and it is an important thing to clarify that divestment is not making sure that we have zero value of Russian assets within the entirety of the portfolio. It is making sure that we, perhaps for want of a better term, no longer have a holding or an interest in that investment. It is actually not having it anymore rather than just having it with a zero value.

In terms of when that is going to happen, no, we do not have a time frame for that because it requires the capacity to be able to divest of it and, as we have discussed previously, find a buyer for it. The experience has been that in many cases it has been impossible to do that. I am guessing that the three that were able to be divested of happened some time ago and it is the 19 that have been difficult to divest of subsequently.

Mr COWDREY: This is less of a question and more of a comment. Can I extend thanks to Funds SA for their approach to date. I think their quick actions, as has just been referenced, have been helpful to at least divest ourselves of those assets that were able to be quickly, at a time when most international markets were effectively closing very quickly. Can I extend our thanks to Funds SA for their actions so far in the circumstances. Obviously, independent of government they have been able to reflect the wishes and the views of the community pretty well. Thank you very much.

Clause passed.

Title passed.

Bill reported without amendment.

Third Reading

The Hon. S.C. MULLIGHAN (Lee—Treasurer) (17:38): I move:

That this bill be now read a third time.

Bill read a third time and passed.

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