Kate Lundy (ACT, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Superannuation and Corporate Law, Senator Sherry. Can the minister please update the Senate on the government’s decisive response to shareholder and community concerns over the exorbitant and irresponsible golden handshakes being paid to Australian company executives, which includes lowering the threshold for shareholder approval for such payments from seven times total annual remuneration to one times annual base salary, expanding the coverage of the binding shareholder vote to all executives contained in the company’s remuneration report rather than just directors, and broadening the definition of what constitutes a termination benefit? How has the community responded to a measure that will empower shareholders to take action and more easily reject outrageous golden handshakes?

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

Senator Chris Evans interjecting—

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Indeed, Senator Evans, it is a very, very good question. I thank Senator Lundy for referring to some of the major reforms that the Rudd Labor government announced yesterday to tackle the issue of significant, indeed massive, golden handshakes that we have seen emerge over the last decade or so. There is indeed strong concern about the level of so-called golden handshakes in the Australian community—including in the shareholder community, I might say.

One key element of the decisive, comprehensive reforms announced yesterday is to empower individual and institutional shareholders to prevent the payment of excessive and unjustified golden handshakes to company executives. These payments are often made when a company has been driven into the ground. It is totally inappropriate for payments to be made in those circumstances. They usually bear no resemblance to the future good governance and good economic operation of a firm. Therefore, the government strongly believed it was time to crack down on these particular forms of payment.

One may remember the days when, if someone retired or left the workplace, they often received a gold watch. But unfortunately the level of these payments is now such that we are no longer seeing gold watches; we are seeing a truckload of bullion being paid to many of these executives.

The reforms announced by the government yesterday have received widespread support. Mr David Gonski from the ASX said: ‘12 months has been the convention. This is a good announcement. I would compliment the Treasurer on not taking the quick decision to prescribe—(Time expired)

Kate Lundy (ACT, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question of the minister, and I thank him for his answer. Is the minister aware of any alternative views on the government’s actions to curb executive golden handshakes by empowering shareholders to take action and more easily reject payments that are not in the interests of the company, the shareholder or the community?

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Yes. This issue is obviously being widely debated—indeed, it has been widely debated for a very long time. This matter came before the parliament in 2004. I think I referred yesterday to the fact that my colleague who was then handling this matter was Senator Conroy. He in fact moved a raft of decisive reforms on golden handshakes. What happened?

Opposition Senators:

Oh, finally decisive!

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Those now sitting opposite—the Liberal-National party—interject and complain about this government’s action to crack down on golden handshakes opposed those reforms. Senator Coonan, who is now the shadow minister for finance, said: ‘The actual Labor proposal to limit termination payments to one year’s remuneration very much throws the baby out with the bathwater.’ (Time expired)

Kate Lundy (ACT, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Is the minister aware of any further public views on the government’s important reforms, which will see a significant curb on the incredible level of executive pay packages, particularly concerning the growth and the size of termination payments? As we know, they are also known as golden handshakes.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Given the track record of the Liberal-National party, who have opposed almost every decisive measure this government has announced in respect of the global financial crisis, I was surprised that last night, in the dead of night, they issued a press release and—surprise, surprise!—the Liberal-National party have agreed to support Labor’s announcements.

Opposition Senators:

Opposition senators interjecting—

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

So, for all those of you who are interjecting and complaining, and were opposing a few minutes ago, the Liberal-National party has signed up.

Opposition Senators:

Opposition senators interjecting—

John Hogg (President) Share this | Link to this | Hansard source

Senator Sherry, resume your seat. On my right! I need order—and, Senator Sherry, your comments should be addressed to the chair.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Thank you, Mr President. For the information of the Liberal-National party members opposite, the shadow minister, Mr Pearce, issued a press release last night signing you all up to support our changes. But, of course, we know the track record of those opposite: when it comes to the votes they will change their minds. We have seen it time after time—a divided opposition; they will change their minds yet again. (Time expired)