Mr BRENDAN O'CONNOR (8:31 PM) —It is about time that the Corporations Amendment (Repayment of Directors' Bonuses) Bill 2002 was before us, as it does go to very significant issues which confront what sort of country we want to be. I have to agree with some of the comments made by the member for Blaxland. He pointed to the fact that, whilst we can support this bill, there are areas which are deficient, which do not go to retrospectively rectifying matters where directors have clearly received bonuses unduly and undeservedly. It is important that this bill is before us. It is a shame it has taken this long. The reason I think it is important is that very few people are left wondering whether something should be done about regulating the greed—and the criminal activity, on occasion—of some directors of companies. This bill goes some way to regulating their behaviour and perhaps in some way penalising their greed.

It is almost a universal view now, for different reasons. I would like to refer to a quote by an observer of this general area. This observer was commenting on the fact that the earnings ratio of CEOs to factory workers 20 years ago was 42 to one—that is, CEOs on average were paid 42 times the weekly earnings of an employee at the ground level. It is now 400 to one. That has occurred in America, and we are certainly heading in that direction. The observer says:

He is certainly not wrong there. What is interesting about the comment is that it has come not from a militant unionist or from someone who wants everyone to be paid the same but from someone seen as conservative: William J. McDonough, who is CEO of the Federal Reserve Bank of New York. He made those comments because he is aware of the alarming speed at which these directors—CEOs in particular—are lining their pockets with the earnings of shareholders and hardworking men and women. The problem he identifies in America is mirrored here.

The fact is that we are seeing a growing disparity between people in this country. I suppose in a vengeful and punitive sense it is about ensuring that directors—whether they are from One.Tel, Ansett, Harris Scarfe or anywhere else—cannot benefit from moneys after the collapse of their company. One part of it is preventing them from taking the money before the liquidator can access it to pay the creditors. You could argue that that is one part of this matter. But, if someone were to ask me what the nub of this issue was, I would say that a greater matter underlies this bill—and it underlies the need for a superior bill which will regulate the behaviour of greedy directors—and that is that we are seeing a growing disparity between the rich and the poor in this country. The need for this bill exemplifies the manner in which this country is dividing.

We do have faults as a nation—like the fact that some of us still want to maintain a monarchy, a leader who is not an Australian—and there are all sorts of other things we could perhaps be critical of. But it is not too far off the mark to say that not long ago—perhaps 20 years ago or so—people in the economic, social and political world would rightly contend that there was at least some sense of egalitarianism. I think that perception is no longer valid. This behaviour by directors of companies occurs not only before a corporate collapse—not only when a company is in trouble. As a matter of course, they receive extraordinary sums of money. Worse still—as this bill is looking to rectify—they receive moneys and bonuses even knowing that the company that they are director of is collapsing. So we have a situation where rich people take extra bonuses even after gaining knowledge of the collapse.

One of the reasons I rise tonight is that I represent a couple of thousand, if not more, former employees of Ansett in my electorate. It really is difficult for me and other members to explain to former Ansett employees who are still waiting for the payments that they are due under law—the redundancy benefits and their full superannuation—that we cannot find the money to provide for them and yet, at the same time, we cannot stop the directors of Ansett receiving moneys after the collapse. In effect, that is what has happened. We have had situations where people have been in receipt of moneys in and around the time when Ansett was clearly going to hit the wall. That is an impossible situation. It is an obscene situation to be in, when these workers have to confront the problems of selling their homes, of pulling their kids out of school and of just getting enough food in the cupboard until they get another job—if they get another job. They are asking me to explain why the directors of the company receive bonuses. I cannot explain that. I am not able to explain that. What I am hoping is that this bill will go some way to rectifying things in the future. But, as the member for Blaxland said, one of the problems with this legislation is that it is not looking to act retrospectively. To that extent, it is deficient.

The other area that should be looked at more closely—and it is something we foreshadowed late last year—is that the government should accept amendments dealing with corporate disclosure of executive remuneration based on recent changes that were adopted in the United Kingdom. Broadly speaking, these changes would require boards to publish a report on the way in which the directors' and executives' packages are calculated, including the explanation of performance criteria. It would be impossible for anybody to understand the manner in which people can be in receipt of large bonuses when their stocks are going down. I can just imagine the meeting now: you have got a room full of directors, there is one chart with the arrow going up—that is their bonuses—and the other chart with the arrow pointing downwards is their shareholders' profits. That sort of behaviour, where there seems to be no nexus between the performance and the outcome of the company, is something that really has to be properly assessed.

When you have the likes of Alan Wood from the Australian saying something has to be done, you know that you are not really moving too radically. Even Mr Wood, writing in the Australian last year, said we had better do something, otherwise we will strengthen the hand of those who always want to be enemies of the market economy. Okay, he is perhaps not motivated by entirely pure reasons, but he goes on to say:

He wrote that in October last year, when the Treasurer introduced the bill. As I say, more needs to be done in terms of rectifying the problem, but this is moving some way forward.

One of the failures of this government is not only its proximity to some of the directors involved but a failure to see that these people are not able to self-regulate. I do not see the minister for workplace relations saying, `I trust unions, and I think they should run all their own elections—in fact, they should run everything—and they should self-regulate the way in which they operate.' No, there are more laws now for unions. Unions are regulated, and I think rightly so. I think it is good to have regulation ensuring there is efficacy and transparency. The fact is that unions are expected to be accountable and transparent, and elections are in fact regulated by a statutory authority. I think that is okay. What is difficult for the government to understand is that corporate directors, who have at their disposal enormous amounts of money—and, in their case, it may be tempting for them to consider what they should do with that money—have shown that they have failed to regulate their own behaviour. If they cannot regulate their own behaviour—and they have shown manifestly that they cannot—then the government of Australia must regulate their behaviour.

There is no point in attempting to have directors on some sort of honour basis. That clearly has not worked. It is like having kids run a lolly shop or giving firelighters to arsonists. I say that not to reflect upon directors as a whole. I am sure that many of them are upstanding citizens, but clearly there is a significant proportion of them that are greedy, that cannot help themselves, that continue to cheat others out of moneys and that do not seem too concerned about doing it. Without proper regulation, we are not going to see any changes in the behaviour of those who are interested only in transgressing and contravening normal, standard behaviour for a director.

I do support this bill. As I said, I am disappointed that it lacks some other provisions. What I would like to be able to do soon is go back to where I am from—to Sunbury, to Gisborne and Riddells Creek, to places around Broadmeadows where the member for Calwell lives and works, and to the area of the member for McEwen, who I know would be equally concerned with this issue—and say, `I know you've been wronged. There's been a real problem with this, but we're going to make sure that this won't happen again.' At the very least, whilst that may not fix their problem, they will say, `Here's a parliament, here's a government, that's willing to do something.' It would be a lot better if the government had decided to retrospectively apply this and try to secure the moneys back from these directors who have happily taken the money out of the hands of workers. That appears not to be the case on this occasion, but I do support the bill. It is one step forward, but a few steps short of what I thought would have been a more ideal set of laws.