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Monday, 26 October 2009
Page: 6960

Senator CONROY (Minister for Broadband, Communications and the Digital Economy) (12:38 PM) —I indicate that the government will not be supporting these amendments by the opposition. The current threshold allows up to seven years total remuneration to be paid before shareholder approval is required. This is a very high threshold and there is a clear need for reform to address this and other deficiencies in the regulatory framework. The Productivity Commission considered this issue as part of its review of Australia’s remuneration framework. In its draft report, the commission noted that the majority of contracts currently use base salary, rather than total remuneration, to determine the amount of a termination benefit. As such, the commission concluded that a threshold determined by reference to base salary, rather than total remuneration, is unlikely to cause difficulties.

However, it is no surprise to see the Liberal Party out there opposing, once again, a sensible reform to corporate excess—opposing a sensible reform to executive remuneration abuse. They have a track record that stretches over the 11½ years they were in government of being dragged, screaming and kicking, to every single reform of the executive remuneration abuses that have gone on. They may and try and tell you that, in fact, they introduced in CLERP 9 the non-binding shareholder vote. But let me be very clear, having been the shadow minister at the time: when I first called for the executive remuneration non-binding shareholder vote, it was roundly opposed. I was roundly criticised by the then Parliamentary Secretary for Financial Services, Senator Ian Campbell, who criticised me for plagiarising this from the UK. After a period of some six months of my being attacked for plagiarism and not having my own policy framework, the then government finally relented and agreed to introduce the non-binding vote.

But it took six months of campaigning to end this sort of executive remuneration abuse, and we are just starting to see some of the benefits coming from this now, with votes that have taken place just in the last two weeks over Qantas’s remuneration and over a string of other companies’ remuneration. Large votes have taken place against these sorts of packages. Even Telstra, a very popular company in today’s chamber debate, received a resounding no vote over Mr Trujillo’s remuneration package. So it is not surprising to see once again—when sensible, modest reform of executive remuneration abuses is put forward in this chamber—those on the other side, who protect and champion privilege and executive remuneration abuses, up to their same old tricks. The chamber should absolutely reject the opposition’s amendments.