House debates

Thursday, 12 May 2011


Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Bill 2011; Consideration in Detail

11:16 am

Photo of David BradburyDavid Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Hansard source

It would strengthen the bill. He did not provide any elaboration as to how it would do that. If we look at the history of what has occurred here, these are not some proposals that we have slapped together over a very short space of time. This is a very deliberative process that we have worked through, a very consultative process. I want to take this opportunity and a little bit of time to take the House through the process that we have been through, because it is important to understand why we are so opposed to these amendments that have been moved by the opposition.

The government announced the Productivity Commission inquiry in March 2009, so it was not yesterday. It has been going on for a long time. An issues paper was released by the Productivity Commission in April 2009, a discussion document in September 2009, and a final report to government in December 2009, which was then publicly released in January 2010. The Productivity Commission received 170 submissions, so people have had plenty of opportunity to contribute to this. There were 170 submissions received. The Productivity Commission conducted roundtables and public hearings over nine months. Government announced its response to the Productivity Commission report in April 2010. The government then released draft legislation on 20 December 2010 and consulted on that legislation through until late January 2011. More than 50 submissions on the draft legislation were received, and I personally met with many stakeholders about the issues and concerns that they held. The bill was finalised and then introduced into this House on 23 February 2011.

The amendments that have been brought forward by the opposition, as I mentioned earlier, strike at the very heart of this package of reforms. I have outlined how extensive a process this was. I note some comments made earlier in the debate by the member for Mayo in particular. He said some very nice things about the Productivity Commission. In fact, I think that they were warranted comments. He said:

What we do seek to do is empower shareholders more, particularly when the Productivity Commission, whose work I have a very high regard for, is making some sensible recommendations on how we do that.

The government agrees with that. We are not proposing to overturn some of those recommendations. Indeed, the member for Mayo went on later in his speech and said:

I do not think there is any doubt about the quality of the work that the Productivity Commission does for the Australian public; it is always there.

We agree. On this very question of whether or not the 25 per cent should be calculated by reference to votes cast or by reference to issued shares, the Productivity Commission had something to say. In their report, on page 391, the Productivity Commission said:

Normal voting protocols should apply, however, to the re-election of directors. (While some participants argued that sanctions should be triggered only by a majority vote based on issued shares, rather than votes cast, the Commission does not see a case for this departure from normal voting conventions.)

There it is from the Productivity Commission.

What the opposition are proposing here is to depart from normal protocols when it comes to voting at AGMs. One would have to ask the question: why, out of all of the votes that are considered at an annual general meeting, depart from protocol for this particular vote? I might remind the House that this is a non-binding vote. Why for this particular vote do we now see the coalition come forward and propose that we water down the calculation of that vote so that it would not be 25 per cent of votes cast but 25 per cent of issued shares? There is a good reason for that, and it is that those opposite are not committed to these reforms. They have had a range of positions in relation to these measures that we have brought forward. (Extension of time granted)


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