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Wednesday, 17 March 2010
Page: 2065

Senator CAMERON (12:45 PM) —I rise on a matter of public interest, and that is the disappointment felt by many at the persistence of the short-term, opportunistic thinking in the business community. Recent contributions from business on important policy questions have failed to consider the national interest or the long-term interest of Australian society and the economy. But it has not always been this way. The Business Council of Australia, contending with a Howard government incapable of making long-term decisions on infrastructure, investment, skills development or having a credible response to climate change, commissioned a study on short-termism in Australia. The study was published in 2004 as an annual review under the title Seeing between the lines; looking beyond the horizon. In order to briefly outline what it meant by short-termism, the BCA made the following points:

Creating lasting value, sustained growth and quality of life require Australia to extend its vision and time horizons.

They said:

The Business Council of Australia has a strong interest in the causes of, and solutions to, short-termism.

And they went on to say:

At a more general level, there is also concern among BCA Members that … the dynamics of change are forcing individuals, investors, businesses and Government to develop shorter time horizons in their decision-making, this could have significant implications for the adequacy and composition of public and private investment.

As a result, Australia’s ability to sustain economic growth, and thereby sustain individual well-being and quality of life over time is likely to be compromised.

The BCA report went on to note a Duke University and University of Washington study of 401 senior financial officers of major US companies. This report found the following: 78 per cent of those surveyed would give up economic value in exchange for reporting smooth earnings growth; 55 per cent of respondents would delay the start-up of profitable investment projects to avoid missing an earnings target; and four out of five executives said they would defer maintenance and research spending to meet earnings targets. Commenting on these findings, Campbell R Harvey, an international business professor at Duke, said:

I was shocked by the honesty of the executives’ responses. There was no cover-up—they are telling it like it is. Perhaps they see this research paper as the first step in defusing the cycle of short-termism.

Unfortunately, many of the lessons and recommendations from this report have been forgotten by key members of the Business Council of Australia and most certainly by the opposition, whose political agenda is based on short-termism, opportunism and populism.

The nature and structure of the international finance sector and its short-term demands for ever-increasing returns was, in my view, part of the spiral that led to the global financial crisis. It seems to me that, when a government seeks to address the long-term issues facing the nation such as climate change, health and education, short-termism from the opposition and the business community comes to the fore. This has been made clear in recent statements and submissions to government from the Business Council of Australia.

There was a time quite recently when the BCA was unequivocal in its support for a market based solution to the threat of climate change. On 24 November last year, BCA President Graham Bradley issued a statement which made it clear that, in the view of the BCA, the introduction of the Carbon Pollution Reduction Scheme in Australia was of such fundamental importance and long-term consequence that it required bipartisan support. Mr Bradley went on to say that, when passed, the legislation would enable Australian businesses to plan for and make the required decisions about investments to transition Australia to a low-emissions economy. But on 11 February this year, in a speech to the Australia-Israel Chamber of Commerce, Mr Bradley saw fit to be far more equivocal on the task facing this country in tackling climate change. Mr Bradley and the BCA backtracked on their support for a market based mechanism to reduce greenhouse gas emissions and sought to hide behind the outcome of the Copenhagen conference to justify this.

It is not only the BCA that is running away from the market; it is the Liberal Party that is running away from the market as well. In that same speech, Mr Bradley outlined five reforms he and the BCA consider the most important challenges facing Australia. Tackling climate change simply did not rate a mention. In my view, this was an example of short-termism writ large. It is an appalling example of policy weakness and political opportunism aimed at cosying up to a Liberal Party lurching dangerously to the right and, in doing so, giving comfort to a Liberal leadership who will do anything to win votes, who will promise anything to win votes, who are untrustworthy and extreme.

The failings of the business community, represented by the BCA again, came to light in the BCA’s 2010-11 budget submission. In so many ways the submission is entirely predictable. It makes the perennial call for ‘ongoing structural reforms of our system of workplace relations’. For the BCA, it is as if the government had not already reformed the industrial relations system to deliver a balanced and fair system for all Australians. Of course, we all know that the BCA’s call for further reform is actually code for winding the clock back to Work Choices. We all know Work Choices was the manifestation of the Liberal Party and BCA’s long-cherished dream to destroy collective bargaining and union organisation in Australia.

Everyone knows what the Howard government’s AWAs, supported by Mr Abbott, the Leader of the Opposition, meant for Australian workers. Sixteen per cent of all AWAs reviewed by the Office of the Employment Advocate excluded all protected award conditions. The conditions that were ripped away by Work Choices were leave loading, penalty rates and shift loadings. Only 59 per cent of the AWAs retained declared public holidays. So public holidays were gone for workers under Work Choices. Only 22 per cent of the AWAs provided a wage rise during the term they covered. Protected award conditions most often modified were overtime penalties, rest breaks and public holiday pay. Six per cent of AWAs failed to meet the annual leave minimum standard. Labor will not be going back to a discredited policy that undermines decency and fairness in the workplace. We will not be going back to where John Howard was and where Tony Abbott was. That is not for us.

On the question of fiscal priorities, the BCA’s submission makes it clear where their priorities lie. After re-asserting that fiscal responsibility on the part of government has strong public support, which, no doubt, it has, the submission sets out the BCA’s hit list for fiscal rectitude. In a simplistic and uncaring manner, the BCA submission sets up the 10 biggest Commonwealth expenditure programs for real cuts over time. From this list, we can see that the BCA support real cuts to revenue assistance to the states, including my home state of New South Wales, cuts to pensions and other payments to seniors, cuts to family tax benefits, cuts to Medicare, cuts to disability support pensions, cuts to healthcare special purpose payments, cuts to unemployment benefits, cuts to government school payments to states, cuts to pharmaceutical benefits and cuts to higher education support. No doubt the extreme Right of the Liberal Party will be looking at this and saying, ‘Way to go, BCA.’ The BCA’s hit list would have little public support and would, if implemented, introduce the worst aspects of the US dog-eat-dog society into Australia. We are not for that on this side of politics.

How is it that an organisation that expects to be taken seriously by a social democratic government believes that the budget should be balanced at the expense of the weakest and most vulnerable in our society? How could these people be so out of touch? It is because they do not inhabit the same world as the vast majority of Australians. Mr Graham Bradley is the BCA president. He is a professional company director. Mr Bradley’s director fees can be fairly accurately estimated as being in the order of $1.5 million last year—not bad for a handful of part-time jobs. Mr Greig Gailey is the immediate past president of the BCA and is currently its vice-president. Mr Gailey’s total remuneration from Zinifex for the 2007 financial year was $16.69 million, including a termination payment of $13.5 million.

 Mr Ralph Norris is on the BCA board. He is the managing director and CEO of the Commonwealth Bank. Mr Norris was paid total remuneration of $9.2 million in 2009, including $1.17 million in short-term incentives. No wonder they like short-termism when they can pick up $1.17 million in short-term incentives. Short-termism can be highly profitable for some, especially if you are a banker. Also on the board of the BCA is Mr Richard Goyder. As Managing Director and CEO of Wesfarmers, in 2009 Mr Goyder was paid a total of $8.126 million and a short-term incentive of $1.1 million. There are others on the board of the BCA who I am certain are paid far in excess of the wildest dreams of most Australians.

BCA board members would never have to worry about how they put the next meal on the table. They would never have to worry about how they pay their mortgage or pay their rent. They would never have to worry about what sacrifices they have to make to send their children on a school excursion. They would never have to worry about where the money will come from to pay the doctor’s upfront bill. They would never have to worry about buying a prescription drug for their sick kids.

Senator Birmingham —Whatever happened to the crackdown on executive salaries?

Senator CAMERON —Is it any wonder they are so out of touch with what is real in this economy and in this society? They live in the world of the super rich, a world of harbour-side mansions and luxury cars, the best that money can buy. They are oblivious to the day-to-day struggles of ordinary Australian families. The interjectors on the other side simply want to stand up for the big end of town, who simply want to let the market rip, who want to go back to Work Choices and to workers being completely subservient to multimillionaires in this economy. That is the history of that lot over there. And do not be fooled by the new face of Mr Abbott, because Mr Abbott is one of the most extreme, right-wing officers in this country. This is what we would be faced with if he ever became Prime Minister of this country.

We as a government deal in the real world. The BCA has called for lower business taxes and lower personal taxes and they want to increase the GST on ordinary workers. We do not hear many complaints from the opposition on that. We all know that this would make ordinary Australians pay more while the big end of town get off with less. That is unacceptable. We all know that these taxes are regressive. This government wants to build a good society, a society where the market serves society, not the other way round. We should not allow short-termism, self-interest and greed to be the basis of this society. That is why we say: reject the BCA proposition, reject the arguments from the coalition on these issues and make sure that we do build a society that we can be proud of and a society that is sustainable into the future. (Time expired)