Future Fund backs foreign weapons companies, ignores Aussie defence firms
The Future Fund has poured more than $600m into foreign military and space companies but nothing into Australia’s own defence industry.
The Future Fund has poured more than $600m into foreign military and space companies but nothing into Australia’s own defence industry.
The Australian can reveal the sovereign wealth fund’s holdings in defence companies are dominated by US giants, including Lockheed Martin ($71m), General Dynamics ($63m) Northrop Grumman ($43m), and RTX Corporation ($72m) - which owns Raytheon, Collins Aerospace, and engine company Pratt & Whitney.
The fund’s biggest defence-related investment is a $192m stake in New Zealand-founded space company Rocket Lab USA, which is now headquartered in California.
It also has stakes in Boeing ($10m), Britain’s BAE Systems ($26m), Japanese aviation company Jamco ($25m), US technology company L3Harris ($26m), and a minor investment worth in Israel’s Elbit Systems worth about $488,000.
The Future Fund provided the list under Freedom of Information Laws to Greens’ Senator David Shoebridge.
Its release came as Treasurer Jim Chalmers hosted banks, super funds and asset managers, urging them to back Australian companies in key sectors including defence.
The Australian Industry and Defence Network said it was extraordinary that hundreds of millions of taxpayers’ funds were being sunk into foreign-owned multinationals when local firms were crying out for investment and vital government contracts.
“The logic of all of this seems impossible to understand – how the Australian government can neglect our own Australian Industry whilst handing hundreds of millions of dollars to overseas companies?” AIDN chief executive Brent Clark said.
“Australian owned companies are struggling in the current defence environment where funding has slowed to a trickle for Australian companies, while at the same time foreign owned companies are being heavily funded by the Department of Defence.”
Senator Shoebridge said the Rocket Lab investment was particularly hard to fathom, after the government’s $1.2bn cut to a major space industry partnership with NASA.
“One day they pull more than a billion dollars from the Australian space industry and the next they drop almost $200 million on a US rocket company,” the Greens’ senator said.
“The Future Fund needs to talk with the Albanese government and deliver at least a semblance of coherent national industry policy.
“The space industry has a raft of important non-military uses that are essential to the long-term prosperity of Australia, but under this government, they are more interested in the long-term prosperity of the US.”
Senator Shoebridge called for ethical investment rules for the Future Fund to stop it investing in multinational weapons suppliers.
Australian Strategic Policy Institute council member James Brown said Rocket Lab had benefited from a supportive investment landscape in New Zealand and was now worth billions of dollars.
“The difference couldn’t be more stark. Australia’s government has failed to develop a space strategy, allowed space to become a partisan debating point, and killed investment confidence in a critical national industry through neglect and apathy,” he said.
Dr Chalmers, Finance Minister Katy Gallagher and Defence industry Minister Pat Conroy met with investors representing $2.5 trillion in capital during an investor roundtable in Canberra on Tuesday, urging them to plough funds into the defence sector, clean energy and “social impact” investments.
Mr Conroy said the roundtable came as the government looked to modernise the defence industry to meet growing national security challenges.
“The finance industry has an important role to play in building the sovereign capability we need to equip and maintain the Australian Defence Force now and into the future,” he said.
“The discussions held today also pave the way for institutional investors to be involved in the production of world-class defence technologies and platforms, while supporting Australian businesses and presenting an opportunity for everyday Australians to have a stake in the defence of their nation.”
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