Wednesday, 15 October 2008
Matters of Public Importance
This matter of public importance seeks to give the Howard government the kudos for the positive situation that the Australian economy is in but an escape clause where the current financial crisis is concerned. It cannot do that. The fact is that, buoyed by one of the most prolonged and positive economic periods in global history, the Howard government was able to pursue economic rationalist policy in Australia over a period of 12 budgets. In that budgetary time frame, one of the excesses of the direction the Howard government took was that the ratio between Business Council of Australia CEO cash remuneration and average adult earnings, which in 1995-96 was 31 to one, became, by 2004-05, 63 to one. I do not have more recent figures but I would be surprised if it were not more than 70 to one.
In the Howard period of government based on Reaganomics and the theory of former Prime Minister of Britain Maggie Thatcher that government should get out of the way, the disparity between rich and poor in this country grew inordinately. The result of that is that we now have anything but a fair-go country; we have a country that is more economically divided than ever before in history. We also have a country that, as far as economic resilience into the future goes—and those are the terms that Senator Abetz uses in this proposal to the Senate—we are wanting. As Sir Nicholas Stern, former Chief Economist of the World Bank, said at the Press Club here in Canberra last year, those economies which are environmentally oriented are going to be the most robust of economies as we move into the future. But what the Howard government did was go in the opposite direction and give the least attention to the environment.
Australia finds itself in the dubious position of being in an age of threatening climate change impact on the world economy—there will be massively bigger threats to the economy in the future due to climate change than we are seeing with the global crisis now. But Australia, thanks to the Howard government’s mismanagement, is the world’s biggest exporter of coal and one of the couple of the world’s largest polluters of the atmosphere with greenhouse gases. Of industrially advanced countries, Australia is one of the very few that continues to log and burn its native forests and woodlands. This alone contributes—quite unnecessarily; it is done for an export woodchip industry in the main—some 20 per cent to the greenhouse gas pollution of the atmosphere.
Unlike Germany, where, with the Greens taking balance-of-power roles in government, all parties have moved to the forefront of environmental excellence in managing their economy, Australia does not have hundreds of thousands of people involved in environmentally based industries. It does not have one of the world’s most advanced renewable energy components to its industrial make-up and it does not have the hundreds of billions of dollars in export earnings that Germany, a much less sunny country than this one, has managed to have because it has simply reformulated its economy away from the polluting industries of the past, at a time when the Howard government was tugging its forelock to the enormous lobbying power of the foreign owned coal lobby, for one. The concern we must have is that not much has changed under the Rudd Labor government. A lot needs to be done.
The Greens, during the Howard years, this chamber will remember, took on the plight of pensioners in this country and pursued an increase in pensions. We have carried that through into this period of government. While we welcome the increase and the one-off payment to pensioners we have seen in the $10.4 billion package announced by Prime Minister Rudd yesterday, how sad it is that in this nation it took a financial crisis to bring on that package and that it was not done because it was socially just and because pensioners across this country are living in penury and are struggling to make ends meet.
Pensioners, as senior citizens who have contributed so much to the country, deserved to have their needs met in past budgets. Instead of that, under the last Howard budget, $20 billion went into tax cuts largely favouring the already rich, the big end of town. Then, to meet a promise of the Howard government, in the Rudd government’s first budget, the budget of Treasurer Swan, a further $31 billion over the forward estimates was given to tax cuts, again largely benefiting the top end of town. There was a great resistance to improving pensions.
Now it is seen that pensioners can be a vehicle for stimulating the economy in a pretty wide fashion because they do shop and they do give business to local business owners. The measures are seen as a good way to help stimulate the economy at a time when we have a global crisis. Well, thank goodness. It is an ill wind that blows no good. But let us be clear about this: it is only due to the financial crisis that we have seen the pensioners get the start of a remuneration reform package that they so richly deserve.
I want to go back to the CEO question. Today at the Press Club, Prime Minister Rudd cited the culture of greed which led us into the crisis that we are now all experiencing—emanating from the United States and, I might add, Prime Minister Howard’s great friend President Bush, who was asleep on the watch or, much more than that, was part of the problem by not regulating the financial sector in the United States. So much for Prime Minister Howard. He had a very close relationship there, but he failed to get President Bush to properly regulate an economy in a way which would have saved us from the mess we are in at the moment.
We have seen prodigious payouts in the United States to executives—hundreds of millions of dollars per annum taken out of corporations and paid for effectively by shareholders and/or consumers. The trend has been similar in this country, to the point where the chief executive of Macquarie Bank this year has a pay package of over $26 million. Up until yesterday, we could not find $30 a week for pensioners, but the CEO of Macquarie Bank gets $26 million. Quite a few other CEOs get more than $10 million. Quite a few other bank executives get more than $5 million.
That is why the Greens will be moving an amendment to the legislation currently before the House of Representatives—to, in fairness, peg some of the extraordinary excesses that have occurred in CEO pay packages at a time when many millions of Australians have been finding it hard to make ends meet. Who would be able to dispute an amendment from the Greens saying that these salaries ought not to be more than $5 million a year—and I will get criticism for setting the bar so high—or 10 times the prime ministerial salary of this country? Surely if the Prime Minister can contribute to the country with hard work in the way that he does then there is no excuse for the CEOs of these corporations to be getting 10, 15, 20 times or more what the prime ministerial salary is. (Time expired)