Mr KELVIN THOMSON (4:30 PM) —Mr Deputy Speaker Jenkins, I know the matter of executive salaries is of concern to you. Most of the executives at the Macquarie Bank at a senior level earn salaries of between $400,000 and $500,000 per annum. This should be compared with the Prime Minister's salary of $240,000 per annum. I do not think it is churlish of me to suggest that they are doing very nicely, but that is not all.

There is a profit sharing scheme which commences when the bank earns more than eight per cent on shareholder equity. In recent years, because of the extraordinary deals that the Macquarie Bank has secured with the state government of Victoria, the bank has been earning between 25 and 26 per cent returns on shareholders' funds. The result has been the creation each year of a massive profit pool to be shared around the top 70 or so executives. Each of the senior executives receives a base figure of around $400,000, plus extra for special performance. In 1998, this meant that more than 40 Macquarie Bank senior executives had total incomes of $1 million or more. Indeed, in 1998, seven senior executives had total incomes of more than $2 million. One of the main beneficiaries, the chief executive of Macquarie Bank, Mr Allan Moss, saw his salary in 1998 increase from over $498,000 to a total of $3.7 million.

The question that arises is: who is the one person whom they have most to thank for these massive salaries? The answer is Mr Alan Stockdale, the former Treasurer of Victoria. His motto has been: if it is owned by the people of Victoria and it moves, sell it. In fairness to Mr Alan Stockdale, he has been true to his word. He sold our electricity generators and distributors and our gas distribution business. He sold the Grain Elevators Board. He sold our equity in the Portland aluminium smelter. He sold Victoria's pine plantations. He commenced the sell-off of our hospitals and water supply utilities and had plans to privatise our schools. He also floated Tabcorp.

The total sell-off was in excess of $25 billion in a period of seven years. How did these sell-offs benefit Macquarie? For starters, Macquarie Bank was paid a fee of $25 million for advising on the $1.7 billion City Link project. Second, Macquarie Bank was an active participant in the successful consortium which tendered for the $4.76 billion Loy Yang A electricity generator.

Then we have Macquarie Bank's asset and infrastructure group. The asset and infrastructure group is divided into three separate businesses. They include project and structured finance, infrastructure and specialist funds and Macquarie capital. During the past 12 months, this group has provided advice on the sell-off by the federal government of Sydney airport and the sale by the Victorian government of Victoria's rail freight. The Macquarie Bank asset and infrastructure group has equity in Victoria's Loy Yang A power station and Sydney's M2 and airport motorways. The asset and infrastructure group was responsible for the float of Transurban, the company that operates City Link.

This asset and infrastructure group also advised the Kennett government in 1997 on the sale of the state government's 25 per cent holding in the Alcoa aluminium smelter at Portland and earlier, in 1993, on whether the Transport Accident Commission should be sold. Macquarie Bank has also acted as local adviser to two of the foreign consortiums who wanted to purchase parts of Victoria's public transport system.

So in all these ways decisions of the then Treasurer of Victoria, Alan Stockdale, enriched Macquarie Bank. What do we find now? Mr Stockdale, the same Alan Stockdale whose asset sell-off so enriched Macquarie, has now been appointed to the position of chairman and chief executive of none other than the Macquarie Bank's asset and infrastructure group! This is the same Mr Stockdale who, when he was Treasurer of Victoria, awarded a section of the Macquarie Bank—the Macquarie and Computer Fleet Management—a $150 million contract for the leasing and management of the Victorian government's computer system.

I understand that senior executives on salaries equivalent to what Mr Alan Stockdale will be earning all received incomes in 1998 of around $2 million. Indeed, according to Mr Terry McCrann in the Herald Sun on Thursday, 7 October:

The person he [Mr Alan Stockdale] will work closest with, who runs the asset and infrastructure group, got $2.9 million.

Mr McCrann went on to say that:

. . . were Stockdale just to turn up to work each day he would pocket at least $1.5 million.

. . . . . . . . .

And if he were to put some real runs on the board he could easily earn $3 million, and even more.

It is understood that, in addition to the Macquarie Bank appointment, Mr Alan Stockdale is contemplating joining other boards. The question that arises in relation to the Macquarie Bank appointment is: what are the terms and conditions of the contract that he has entered into? Is he merely receiving a base salary and a performance pay based on future services, or is he receiving an up-front bonus in return for what he delivered for Macquarie Bank while he was still Treasurer of Victoria?

The Victorian state election conducted on 18 September sent a clear message from the electors to the Kennett government that they had had enough of the secret state. Voters called on the government to open their books and disclose the Intergraph contract, disclose the Grand Prix contract, disclose the casino contract and disclose the Austin Hospital privatisation contract. Premier Kennett says he has changed now. He says he is going to restore the powers of the Auditor-General which he took away. He says he is going to restore the freedom of information laws which he gutted and stop the abuse of the commercial-in-confidence category to hide information. He gets his chance now. He has an opportunity to demonstrate his bona fides to the electorate by insisting that his close friend and colleague, former Treasurer of Victoria, Mr Alan Stockdale, do the right thing—open the books and disclose his contract with the Macquarie Bank.

While the people of Victoria have watched their assets sold off and their schools, hospitals and roads neglected—particularly in regional and rural Victoria—they have simultaneously watched the Macquarie Bank grow fat on lucrative contracts provided by the former Treasurer of Victoria, Mr Alan Stockdale. The $25 million commission paid to the Macquarie Bank would have been well spent on roads, hospitals, police stations and schools in regional Victoria. But of course Victorians saw none of that and now Mr Alan Stockdale wants his share.

For the Macquarie Bank to now reciprocate the Victorian Treasurer's generosity with anything from a $400,000 to $3 million salary is disgraceful. This is after Victorians paid $25 million to Macquarie Bank to sell off our roads and major contracts in our computer services as well as an equity stake in our electricity generators and City Link. Has Victoria really sunk to this?

A minister of the Crown should not be able to benefit with a job from a bank or company that has been awarded major commissions or contracts by the government. It certainly should not happen when he has been the minister responsible for the awarding of those contracts. In the United States, I understand it is illegal for government advisers to leave and immediately start working as lobbyists or advisers for companies or banks negotiating with government.

There are other matters of concern. Is it not the fact that Mr Laurie Cox is a director of Macquarie Bank and that he is the one who has personally recruited Alan Stockdale? This is the same Laurie Cox who is chairman of the world's biggest toll road company, Transurban, a position he was supported into by Premier Kennett. This is the same Laurie Cox who Premier Kennett has described as one of his stockbrokers and who we know, courtesy of Stephen Mayne, delivered some 20,000 Yates shares after a phone call from Premier Kennett when ordinary Victorians were unable to obtain shares. Stephen Mayne's web site describes the Transurban float as `the best example I've ever seen of fat cats and insiders making millions from a business which relies on ordinary citizens paying up . . . Mr Cox has profited to the tune of more than $2 million'.

We know the Kennett government has given Transurban special treatment. It plans to reduce the number of lanes on Footscray Road and take other traffic management measures to funnel traffic on to City Link. We know it has turned a blind eye to Transurban's numerous breaches of its undertakings to the Victorian community—that the Moonee Ponds Creek would be naturalised, its massive downward revision of projected travel time savings, its ugly and third-rate noise walls, its promise that Western Link would be open way back in May, its introduction of a complex structure of fees and charges more worthy of a bank.

It has long been a matter of concern to Labor that the Kennett government has been running dead on holding Transurban to its promises and that the public interest has run a poor second to Transurban's private interest. The Auditor-General of New South Wales said that one day there would be a need for a royal commission into the Kennett administration. Mr Stockdale's appointment by Macquarie Bank brings that day closer.