PERTH council’s new investment policy will keep ratepayers’ money out of risky funds, but doesn’t prevent investments in companies selling weapons, prostitution, alcohol, tobacco, gambling, or those contravening human rights.
After several missed deadlines the council this week got around to updating its five-year-old investment policy, which is meant to be updated yearly. The outdated version is considered a “medium risk” by its risk committee.
The city has consulted with other councils including Melville which struggled for years to recover from risky investments that fell over during the global financial crisis.
Perth’s new policy no longer allows investments in slightly-risky “A-3” rated institutions, whereas they could previously stick up to 10 per cent of their short term investments with them.
Melville council’s current policy forbids them from ever putting money in sub-prime mortgages again, and also forbids investing in companies that primarily make money from “armaments, tobacco, alcohol, gambling” or activity that “contravenes human rights or… labour laws”.
Perth council put that in the too-hard basket.
While it doesn’t currently have any investments with missile manufacturers or private mercenary outfits, a staff report says figuring out whether companies engage in those practices “can be notoriously difficult”.
And while Vincent and Bayswater councils are trying to pull their investments out of banks supporting the fossil fuel industry, Perth’s finance staff reckon the environmentally friendly banks aren’t up to scratch: “The officer recommendation would be to not accept lower quality investments simply to show alignment to an ideological position.”
Perth council currently has about $182 million cash investments across six banks and just 2 per cent of that cash is with a non-fossil fuel supporter, Suncorp.
by DAVID BELL