Senator O'BRIEN (1:33 PM) —The matter I want to talk about today does not deal with the republic at all but deals with public accountability. This government keeps talking about its commitment to reduce the charges it imposes on industry, and that is an appropriate policy objective. Government must provide services as efficiently as it can. A reduction in the costs imposed by government authorities on industries that use their services was a key policy objective of the former government. While I was not part of that government, I think I can fairly claim that both the Hawke and Keating governments were successful in their endeavours.

This government has also talked about the need for transparency of the cost basis for government charges. I also agree with that commitment. It is just as important that governments not only keep charges down but also justify the basis for charges they impose.

Last year, I asked a question on notice about a review that government had undertaken into the operation of Airservices Australia. That review in fact was completed in March 1998. According to the Minister for Transport and Regional Services, the purpose of the review was to determine what changes were needed to the structure of the authority to `facilitate the introduction of competition to the potentially commercial functions of the organisation'. I asked for a copy of that report that followed the review, but the minister, Mr Anderson, refused to release the document, as he normally does. Mr Anderson could never be accused of being a supporter of open government. In response to a question on notice, Mr Anderson said:

The Government has decided not to release the report, and I am not prepared to comment on its findings and recommendations.

Clearly, the endgame in all of this is the privatisation of Airservices Australia. That means the privatisation of everything, including air traffic control. The government has already attempted to privatise some air traffic services by way of regulation, but the Senate, quite rightly, blocked this move.

As I said earlier, the claimed objective of the government's strategy generally and in relation to Airservices Australia in particular has been to cut costs and ensure that charges imposed on industry are transparent. It was, therefore, of some concern to me and, I am sure, the aviation industry when details of the salaries paid to managers and other staff in Airservices Australia were leaked to the media. This information was obviously leaked by someone who considers the salaries paid to some officials are difficult to justify.

I was asked to comment on those alleged salaries—and I say `alleged' because I understand that the chair of Airservices Australia, Mr John Forsyth, has claimed that the schedule of salaries that has appeared in the media is not accurate. I look forward with considerable interest to Mr Forsyth releasing an accurate schedule of senior executive salaries to correct the record, if such a correction is required. In fact, I invite him to do so.

It is important to note that Airservices Australia is accountable to the minister and the parliament through the Commonwealth Authorities and Companies Act 1997. It should also be accountable to the industry it serves and the Australian travelling public, who, through their tickets, ultimately fund its operations. That is the point I made to a journalist from the Sunday Telegraph who wrote a story about this matter. If Airservices is paying its executives very large salaries, it must be able to justify those salaries.

The list of salaries paid to Airservices staff, which, as I said, somehow found its way out of that organisation and into the media, contained some very big numbers indeed. The minister has advised me that Airservices has initiated a full investigation into the leaking of the management salaries. The Manager, Corporate Security, Mr Peter Beaver, is undertaking the investigation. That inquiry was initiated by the Chief Executive Officer, Mr Pollard. Mr Anderson has advised that he expects the Beaver inquiry to be complete and a report with Mr Pollard by the end of this month. Clearly, both Minister Anderson and Airservices are very sensitive about the fact that these salary packages were made public, and one cannot be surprised at that.

Some time prior to the Airservices management packages being exposed through the Sunday Telegraph, I placed on notice a question not about salary packages but about salary increases paid to Airservices executives. I asked how many increases in salaries or related benefits senior Airservices Australia officers had received since July 1995. I thank the minister for providing me with a prompt answer. I will not go through all of the information provided in that answer, but I want to highlight certain information contained in it. I might add that the answer itself generates a large number of issues, and the minister can, therefore, expect a large number of follow-up questions on the Notice Paper shortly.

The Chief Executive and Managing Director, Mr Pollard, was appointed to that position in November 1995. He received a salary increase on 6 November 1996, on 6 November 1997 and again on 6 November last year. I will be interested to see if Mr Pollard receives a further increase in his salary on 6 November this year. The minister refuses to tell the parliament the quantum of each of these increases. According to the list of salaries that I referred to earlier, Mr Pollard currently earns $329,000 a year. I assume, again, that Mr Forsyth will correct this number if it is wrong.

The General Manager, Corporate and Employee Relations received a pay rise on 1 July 1996 and another one on 14 May 1997, after what is described by the minister as a scope change. On 1 July 1997, just 47 days later, the General Manager, Corporate and Employee Relations received another salary increase. Then he received another increase on 1 July last year. The basis of all these increases, according to Mr Anderson, was independent advice from Mercers Cullen Egan Dell, the average weekly ordinary time earnings index and a performance appraisal by the Chief Executive Officer. The final decision of salary increases for this position rests with Mr Pollard, not with the board of Airservices. According to the list, this position currently attracts a salary of $256,214.

The position of General Manager, Air Traffic received a pay rise on 1 July 1996, 14 May 1997, 1 July 1997 and 1 July last year. The basis for the increases, according to Mr Anderson, was, again, independent advice from Mercers Cullen Egan Dell, the average weekly ordinary time earnings index and a performance appraisal by the Chief Executive Officer. Again, it was Mr Pollard who had the final say on whether or not a salary increase was granted.

The General Manager, Planning and Development has also done very nicely. She received a pay increase on 1 July 1995, 1 July 1996, 1 July 1997 and 1 July 1998. According to the list I referred to earlier, she currently receives $276,229 per annum. In the context of these salaries, it is salutary to recall that, as I understand it, the Prime Minister's salary is in the vicinity of $205,000.

My understanding of the workplace relations regime under this government is that increases in salaries must be directly linked with increases in productivity. That is the key objective, as I understand it, of the Workplace Relations Act. But the increases in salaries paid to managers in Airservices Australia appear to be based largely on increases in average weekly earnings and an index provided by Mercers Cullen Egan Dell, which I understand to be related to surveys of executive salaries—in other words, so-called comparative wage justice, something that is not available to the ordinary work force.

These increases appear to be locked in. They are granted on the same date each year. Accountability, in terms of an appraisal of the performance of these managers and the basis of increased salaries based on productivity gains, apparently rests entirely with the Chief Executive Officer. His only obligation is to consult with the Airservices board in relation to the principles that apply to salary packages. I asked the minister whether there was any obligation on Airservices Australia to advise the Department of Employment, Workplace Relations and Small Business of the quantum and basis for each salary increase. Mr Anderson advised no, even though Airservices is a government authority. He said this was not a requirement on Airservices Australia.

So what we appear to have—and the government can clarify this issue quite easily by telling the parliament how much these senior public servants are paid and what the quantum of increases in their salaries has been since July 1995—is a process of remuneration in Airservices that is not open to any sort of scrutiny at all, and it is the industry, and therefore ultimately the travelling public, who must pay the cost.

I remind the Senate that earlier this year the government increased the avgas and avtur levies, despite having made promises to reduce them. According to the government, the additional funding was to meet the shortfall in the aviation industry's contribution to the Civil Aviation Safety Authority's aviation safety programs. The reality is that CASA had overspent, and the government simply went back to the industry and extracted more money from it to meet the shortfall. The government also imposed a temporary surcharge on all aviation fuels. What for? To boost the Airservices budget. The government blamed the Senate for the increased levy because it would not allow the government to privatise air traffic services. That, I might say, was little more than a crude attempt to link a budget shortfall with an issue of public safety.

In conclusion, I will quote the Prime Minister, Mr Howard. In his 1999 corporate affairs oration, he quoted Milton Friedman:

In a free enterprise, private property system, a corporate executive is an employee of the owners of the business . . . in so far as his actions, in accord with his social responsibility, reduce returns to stockholders, he is spending their money. In so far as his actions raise the price to customers, he is spending the customer's money. In so far as his actions lower the wages of some employees, he is spending their money.

Senator Mackay —Milton Friedman said that?

Senator O'BRIEN —That was indeed the Prime Minister quoting Milton Friedman. One only need reflect on that statement when wondering just why we do not get more information on this situation. This is about accountability—accountability of Airservices Australia to this parliament and, through that, accountability to the aviation industry and the travelling public, who must pay the bills.

Sitting suspended from 1.47 p.m. to 2.00 p.m.