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Wednesday, 4 December 2002
Page: 7155


Senator CONROY (3:04 PM) —I move:

That the Senate take note of the answers given by the Minister for Revenue and Assistant Treasurer (Senator Coonan) to questions without notice asked by Senators Conroy, Collins and Cook today relating to her pecuniary interests.

I wish to specifically take note of Senator Coonan's answer to my question on executive remuneration, particularly the use of protection deals by executives. These protection deals are outrageous. Executives are using derivatives to lock in the value of shares and options granted to them as part of their remuneration package and so avoid any fall in the share price. Shareholders, unfortunately, are not able to avoid any fall in the share price—falls which can often be attributed to bad management. So executives are protecting their interests but putting at risk the investment of shareholders. That is what this latest scam is about: taking the risk out of it for some but leaving all of the risk in the hands of the poor mug shareholder who knows nothing about it. This is wrong and the Minister for Revenue and Assistant Treasurer should have been prepared to say so, but she did not. Now she goes scurrying out of the chamber and will not stay to debate the issue. She had the chance to say, `This is unethical, this is wrong, and I'll do something about it.' But no, she is running out of the chamber.

The minister's inaction and silence on this matter is condoning these protection deals. If the protection deals had not been exposed in the press, I am sure that the minister would have been happy to let these greedy executives keep doing exactly what they had been doing. It is totally inadequate that more action is not taken. ASIC have simply written a letter. They have stated that the practice of protection deals is undesirable—not illegal, just undesirable. It is clear then that this is a problem calling for a legislative response. ASIC have written to the ASX Corporate Governance Council. If we are lucky, that council may prescribe some voluntary guidelines. That is the form of Senator Ian Campbell, Senator Coonan and the Prime Minister in dealing with corporate greed: `Just a bit more self-regulation, boys; she'll be right. Greed is good.' That is the message from Senator Ian Campbell; that is this government's preferred response. But executives have shown, through the use of these protection deals, that they cannot be trusted. These deals have come up under self-regulation, under the `We'll look after ourselves, don't you worry about us' culture.

Australian investors need strong regulation. They need to know that their investments are safe, that management are acting in the best interests of the company. The minister and the Howard government, however, do not want to repose any restraints on the big end of town. We all know why it is— because Senator Ian Campbell, deep down, is nothing more than the spivvy real estate agent he has always been. Deep down, he is just a spivvy real estate agent.


The DEPUTY PRESIDENT —Order! Senator Conroy, you should withdraw that comment.


Senator CONROY —Spivvy?


The DEPUTY PRESIDENT —You should withdraw the comment which is a reflection on the senator.


Senator CONROY —I withdraw. The minister and the Howard government do not want to impose any restraints on the big end of town. Small business know that big business are closer to government than they are. Big business concerns are listened to; small business concerns are ignored. Australian investors and Australian workers are being more than ignored: their retirement incomes are being jeopardised by these protection deals which this minister and parliamentary secretary will not act against. Executives receive shares or options so that their interests are aligned to the interests of shareholders.


Senator Ian Campbell —You've got $32 million of taxpayers' money in your back pocket.


Senator CONROY —Protection deals completely undermine this. It is not good corporate governance but unethical, and it should be stopped.


Senator Ian Campbell —You are a mob of thieves.


Senator CONROY —Executives already receive exorbitant salaries—an average of $1.68 million per year. But that is not enough for some executives: some executives want to make sure that the value of their shares—


Senator Ian Campbell —$32 million is not enough for you, you thief!


The DEPUTY PRESIDENT —Senator Conroy, resume your seat. Senator Ian Campbell, withdraw that comment. That again is a reflection on a senator. You should withdraw that comment.


Senator Ian Campbell —I would be happy to withdraw it if he pays back the $32 million he—


The DEPUTY PRESIDENT —Senator Ian Campbell, I am not asking for any qualification.


Senator Ian Campbell —I withdraw.


The DEPUTY PRESIDENT —Thank you. You should be in your own seat when interjecting.


Senator CONROY —As I said, $1.68 million is not enough for some of these greedy executives. They want to make sure that the value of their share and option package is secured—not through working hard for the company but through entering into one of these protection deals. They want to distort the very corporate governance practices put in place to ensure that they work in the best interests of the company and the shareholders and then they want to have a system of corporate governance that relies on self-regulation. This government supports them 100 per cent in this approach.

The minister has said that a letter has been written and that she will wait for deliberations to conclude before she announces the government's position. But this situation will not go away without more action, without more resolve from this government to get tough on the big end of town—the greedy executives. Unfortunately, that will not happen with this government. It is sadly lacking in determination to deal with the big end of town. (Time expired)