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

The member opposite has invited me to do it all again. I am tempted. As tempted as I am, I will stick to new material. When I heard those opposite were going to move amendments, I was interested to see what they would be. I was absolutely stunned when I heard that what they were proposing was to move from 25 per cent of votes cast to 25 per cent of shares issued. I was stunned that they would do that, but when I heard that was what they were proposing I thought to myself: 'I have heard that before. I have read that proposal somewhere.' Not many people that I met with through the stakeholder consultation raised this particular proposal. I did not see it in many of the submissions that were made either to the Productivity Commission or on the government's exposure draft. But I knew that I had seen it somewhere.

I did a little bit of research and I found that it was actually in a submission that was made on the exposure draft from the Australian Bankers Association. I will read from page 2 of their submission in which the Australian Bankers Association said:

The 25% ‘no vote’ threshold is set too low. It ignores the 75% majority view and can be inflated by the fact that the percentage required is of the votes cast, not total eligible votes …

That was where I had heard it before. I have to say that it is not often that you would hold the Australian Bankers Association up as a beacon of honesty in this debate but, on this point, they have been much more honest than the coalition. At least the Bankers Association were upfront about it. They went on and said in their submission:

A majority vote is more appropriate. We recommend that the voting threshold be set at 50%, in line with other ordinary Board resolutions.

I understand the position of the Bankers Association, but what I do not understand is the sneakiness of those opposite who seek to conceal their distaste for the two-strike test behind this fig leaf that is their amendments. They want to move away from 25 per cent of votes cast to 25 per cent of issued votes so that every person who does not turn up at the AGM effectively votes in favour of the remuneration report. To put that in context, that would put us into a much worse position than where we are at the moment when it comes to shareholder rights. Under the current non-binding vote at least shareholders that do not turn up do not get counted as supporting the remuneration report. So the Bankers Association, understandably representing their interests, have made this point. At least they were honest about it. I say to the opposition: 'If you are serious about watering down this position, don't hide behind your 25 per cent of shares issued. Come out and tell us what you really think.'

The reason the coalition are so confused is that they have had so many positions on this issue over the last little period throughout this consultation. It all started when Malcolm Turnbull was the leader. I know that we do not like to talk about that because it is ancient history. But when Mr Turnbull, the member for Wentworth, was the Leader of the Opposition he said:

All you need to do is change the law and say the senior executives, the chief executive and say the next two or three people, they're salaries must be approved by the shareholders—yes or no.

If the shareholders approve it, well it's their company they can pay their staff high and low what they wish.

He said that on the ABC on 27 February 2009. Mr Abbott backed him on it. The now Leader of the Opposition said at the time:

I certainly think that Malcolm Turnbull's suggestion that the shareholders ought to be able to vote down directors' fees and salary increases is a very good one. I think the Government can do that straight away. They don't need to go to the G20 for that. They don't need to form another committee, review or inquiry to go ahead with that, and they should—straight away.

He said that on Lateline, also on 27 February 2009. So we had a situation back in 2009 where the coalition were so gung-ho about this that they wanted a full binding vote. But now they will not even support some very sensible reforms supported by the Productivity Commission. (Extension of time granted)As I said, they were not happy with their original position and not only have they backflipped on it but if those opposite had listened to the debate they would have been a little bit surprised by some of the rhetoric in it.

Frankly, listening to some of the opposition speakers on this bill you would think that they were opposing the bill. They come in here and they want to send mixed messages. But they do not want to go back to their electorates and have to admit that they voted against this legislation. They do not want to do that because they know that the Australian community want us to take the action that we are proposing. If they come in here and send their mixed messages they can pretend somehow that they support these measures and dress it up behind this fig leaf of amendments. But in the end they have been exposed. They do not support this. They want a system in place that strips away any power that shareholders have. Shareholders will have less power than they currently have. We are opposed to those amendments and we will be recommending that all members do what is in the interests of shareholders and their electorates and oppose these amendments.


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