Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

I rise to speak on the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Bill 2011. The coalition, as indicated by the shadow Treasurer, largely support the bill but we have reserved our right to move some amendments at a later time and in another place. We support the bill because it implements some of the recommendations made by the Productivity Commission in its recent inquiry into executive remuneration in Australia, which reported on 14 January 2010. It was one of the myriad reports and inquiries that the Labor government has implemented since it came to office in November 2007.

Of course, talking on a financial bill on budget day is a coincidence. I note to the House that tonight we will see some of the consequences of the Labor Party's mismanagement of Australia's finances and Australia's budget situation when we see, in just a couple of hours, one of the biggest deficits ever laid down in this place.

It is a concern any time the Labor Party moves any sort of regulation in this space because we see that when they move into this space they do not do it well. The action usually has more of a consequence than was intended in regard to the problem that they are seeking to solve.

The coalition understands that there is broad community concern about executive remuneration, particularly during the bank reporting season. In some respects I understand that the numbers paid to some top executives are beyond community expectations. It should not surprise anyone that those concerns are raised through the media, through our offices and through discussions at community forums around the place. However, there is always a danger in this game that we identify problems without any reasonable expectation that we can solve them. It is easy to play the politics of envy and it is easy to do the 'us versus them', but we do our constituents a grand disservice if we raise expectations of fixing a problem we cannot ever realistically address. The truth is that company directors and the shareholders of companies make decisions on how much they pay their executives, their CEOs and their staff.

The other fact of the matter is that we are part of a global economy and we have to compete for labour and skills at all levels. And this is one of the areas in which we have to compete for skills. So we do need to be careful, in some of the contributions from members opposite, that we are raising expectations in the community that these amendments will massively change the way that these salaries are brought about and the amounts that do seem at times to be beyond community expectations, because the fact is that even with these changes we are not going to see smaller executive remuneration in the very near future. In fact, I would hazard a guess that this year we will see some quite extraordinary amounts of money paid to individuals based on the performances of their companies. In particular, as we have a very strongly performing mining sector, we are going to see some very large amounts paid to people involved in it. The government is not going to stop that, and constituents in my electorate will understand that the government and, for that matter, those of us on this side do not seek to do so. 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 recommendations in this bill, as I said at the beginning of my contribution, in large part are recommendations that the coalition can and will support in amending the bill.

I referred to the politics of envy that those on the other side occasionally like to play on these matters—the raising of 'us versus them' because it is cheap and easy politics to get a run out of. Recently we saw a very bad example of that. The Treasurer, who will shortly deliver the budget, a budget in which he is handing down a $50 billion deficit to add to our massively building debt, a month or so ago made some ill-informed and unfortunate comments in the media in relation to the payment structure for the Governor of the Reserve Bank. I know there have been people on my side of politics who have been critical of some of the actions of the Governor of the Reserve Bank, but while those on the other side like to pat themselves on the back for their management of the economy during the global financial crisis I think there is little doubt that Glenn Stevens, through the actions that he took through monetary policy, played a very significant role in ensuring that Australia survived the worst of the global financial crisis. He has had a very well thought through and clearly set direction in the way in which he has managed Australia's monetary policy in recent years, and it was a big mistake to raise the issues in relation to his salary, given the amounts that people who are managing similar institutions are paid in his industry not just in Australia but also around the world. The governor goes about his job in a very competent fashion and he does what we in this parliament ask him to do, which is manage Australia's monetary policy. He does an excellent job particularly within the band of inflation. It was very ill-informed of the Treasurer to go down the populist road and raise those issues just a few weeks ago in a 'politics of envy' style. Unfortunately, it was what we have come to expect from a man who should really be focusing on how to bring the Australian fiscal position back to a much more reasonable position. If the Treasurer did his job half as well as the Governor of the Reserve Bank does we probably would not be seeing some of the numbers in tonight's budget.

As I said at the beginning of my contribution, the coalition largely supports the direction of this bill. We will have some concerns in the Senate, which the shadow Treasurer so ably, as usual, outlined in his contribution to this place some time ago, back in March. Amendments to the bill will be well thought through and well-considered. It is a bill which seeks to empower, largely, shareholders. It seeks to make some changes around voting. It seeks to make some changes in relation to remuneration consultants. I understand that the member for Mitchell reflected on those earlier, which seemed to start up the comical contribution of the member for Blair; it got him a little bit worked up earlier. The bill deals with the hedging of incentive remuneration. It deals with the declarations of no vacancies at annual general meetings. It deals with the way that proxies and remuneration reports are dealt with and with recommendations out of the Productivity Commission, which should be taken seriously. 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.

In those respects the coalition is broadly supportive of this bill and will not oppose it, but we will be seeking to make some changes at a later time.

Debate adjourned.

Sitti ng suspended from 17:58 to 19:30