Senator CONROY (11:48 AM) —As I was saying, if a judge is sitting there simply having to put a `what is reasonable' test on these sorts of payouts, a smart lawyer, on behalf of whoever is going to be caught in this legislation, will say: `This is what the community standard is. This is reasonable. It is perfectly reasonable.' What we are seeking to do is ensure that the parliament is also reported as saying, `The unreasonableness cannot be defined in legislation and can only be determined by a judge, given the individual circumstances in each case.' This is a furphy. We want the parliament to give some direction. We want to provide the courts with a clear indication of the issues that they must consider when determining whether a transaction is unreasonable. The amendments that we have moved today give some opportunity, some guidance, to a court. They do not, as has been suggested by the government, make it harder, more difficult, for a judge to make a finding in this case. They give some direction; they give some direction that is reasonable.

I would like to speak on a couple of final matters and I appreciate that we are already running behind because of some earlier antics. Labor's view, as I have said before, is that self-regulation has been a green light to corporate greed. Self-regulation has failed to produce outcomes that benefit the investor or the employee. That is why we need a more robust approach. That is why we have moved amendments last night and today—to try and capture more within the law. Labor's amendments fall into two categories: compulsory voting by trustees of super funds, and compulsory disclosure by fund managers. These amendments promote shareholder activism.

We are pleased, from the indications from Senator Campbell, that the government are supportive of some of the principles here. I think Senator Campbell made some worthwhile comments last night. He said that he was immediately attracted to many of Labor's requirements for super funds and fund managers. He said that it was very worth while to require funds to declare whether they vote or do not vote, and how they vote. Given Senator Campbell's endorsement of Labor's proposals, we suggest that the government, through Senator Campbell, put some action behind his words and support Labor's amendments.

We only have to go back to 1998 when Labor and the Democrats combined to force the disclosure of executive remuneration. The government cannot hide behind the arguments they have used—that there were going to be kidnappings if shareholders were told how much they were actually paying their individual CEOs; the sky was going to fall in; kids were going to be kidnapped; they would have to increase their security at home. Don't worry about the fact that it is done in the US. Don't worry that it is mandatory to put the contract on the Net. They all managed to survive that but, in Australia, the sky was going to fall in. Back then, Senator Campbell and the government opposed those amendments. In the end, they were forced, by weight of numbers in the Senate, to not oppose them. While Senator Campbell's words are good, here is his chance to put some action behind the words.

Our amendments will attempt to ensure that Australia catches up with the UK and the US. In the UK, Vodafone executives voted themselves huge packages of options and huge salary increases at the same time as the Vodafone share price was `tanking', as it was going through the floor. And what happened? Shareholders got together, using their power, using their superannuation votes, and 15 per cent of shareholders—just 15 per cent—were able to get organised and say, `Enough is enough. This has got to stop.' The Vodafone management got the message. They instituted a complete review of their executive remuneration procedures. So shareholders can take a stand if they work together. There is the Vodafone example in the UK and there are many examples in the US—where they are forced to vote in relation to pension plans—of shareholder activism delivering good results, and Australia has been behind.

Our amendments want to introduce a penalty of $10,000 per breach for super funds if they fail to vote. Contrary to Senator Campbell's assertions, Labor's proposals have been public since last year. It has not been a last-minute ambush in the Senate, as Senator Campbell has described it extensively. I know he gets lots of phone calls from people saying, `How could you do this to us?' He has got the press release ready which says `Labor and the Democrats ambush us yet again in the Senate'. You can see the press release now—`Irresponsible Labor and Democrats: last-minute ambush!' It does not matter that our policy has been out there for two years, that I have consulted on it for two years or that we put out a press release back in December saying we were going to do this and it is now three or four months later—the `ambush' press release is already written.

We also want to ensure, through schedule 1, item (3), that this bill applies both to directors and to the top five named executives. As it stands at the moment, the bill is quite narrow, and I think Senator Wong may want to make a contribution on this, if she has not already. If the bill claws back unreasonable payments made to directors, why shouldn't it also claw back unreasonable payments to the top five executives in a company? What is good for the goose is good for the gander in this instance. Labor is of the view that the top five named executives should also be held to account to shareholders. This particular issue, which we are addressing with this amendment to schedule 1, item (3), was raised in the Senate hearing. It was brought up, so it is not like it was a surprise. When we move this amendment, I hope that the government can see its way to supporting it.

This is a package of measures that is intended to stamp down on corporate excess. It is to empower shareholders so that shareholders have a chance to take on their boards, which have comprehensively failed in the last five years. What has happened in this country, because of government inaction, is that we have seen boards get their snouts in the trough and we have seen executives get their snouts in the trough, and shareholders have been comprehensively done over. It has not been good enough. The government's response now is not good enough; it does not go far enough. I urge the Senate to adopt the amendments and I urge the government to accept that these are reasonable amendments, accept them and let the bill pass through.