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Monday, 26 November 2018
Page: 11476

Mr GILES (Scullin) (11:54): I second the motion. I'm very pleased to join my friend the member for Batman in supporting this very important motion on CEO remuneration, which touches on wider issues of inequality: inequalities of income, inequalities of wealth and inequalities of power. This motion reminds us that inequality is fundamentally a political choice. It shows that this side of politics is committed to remaking the choices, to remaking the neo-Liberal framework of decision-making to restore equality in Australian workplaces and in Australian society. This motion tells us that there is indeed a moral imperative to change how remuneration is functioning, how stagnant wage growth for ordinary workers is being exacerbated by extraordinary incomes and earnings connected to capital which are being taken in by CEOs and other executives.

We also recognise that this moral imperative carries very, very significant practical consequences for the sort of society we want to live in. On this side of the house we reject the notion that greed should drive our workplaces, but we also appreciate, as do the OECD and the IMF, that this excessive level of inequality is actually bad for economic growth. We see inclusive growth as key to a functioning Australian economy as well as a decent Australian society. I'm very pleased to have the opportunity to litigate these issues and to talk about Labor's approach because this is an issue of deep concern to me. In fact, two years ago I moved a very similar motion. Since then, in the past two years we have seen this issue of the gap between CEO remuneration and that of ordinary workers get worse, not better, and we've seen inaction on the part of the government. I am indebted that elsewhere there has been action. I'll talk about Labor's response but I note, in particular, that earlier this year The Guardian, through the excellent journalists Greg Jericho and Gareth Hutchens, produced an excellent series on the pay paradox, looking at the challenge of declining wages in Australia. We have 26, nearly 27 years of consecutive economic growth where the labour share of the economy continues to fall. There is also a disconnection between labour productivity growth in the economy and growth in wage rates.

This is a complicated challenge. The member for Batman touched on one of the critical responses, which is, of course, to restore the imbalance of power between workers and unions on the one hand and employers on the other. She said it far more eloquently and based on far more experience than I can bring to bear to this. There are some other things that we can and should be doing as well beyond this, and this motion highlights that. We can look to the biggest gap between productivity in Australian enterprises and pay, which is where it comes to CEOs and executives, whose remuneration bears no relationship whatever to the work they do and the contribution they make to the enterprises they are charged with running and, indeed, to the wellbeing of the Australian economy overall. Today in the banking royal commission we see yet more evidence of that, when the CEO of the National Australia Bank spoke today of the problem of executives looking at one- and two- and three-year returns, not about the wider metrics. That builds on a much bigger basis of concern about how our banks are operating.

I'm so pleased that, thanks to Labor's advocacy, we have seen this side of corporate Australia and executive greed exposed. I'm also pleased that Labor has responded to this wider issue and has a response which makes clear, as Greg Jericho did in The Guardian again earlier this month, this notion of the gap between CEO pay and performance and CEO pay and that of workers in their businesses. A society where it takes the average CEO less than five days to earn the average full-time annual wage is of concern to me and, I suspect, all Australians. That is one of the reasons why the member for Fenner, the shadow minister, has put forward the proposal for disclosure. These ratio disclosure proposals haven't come out of the blue. They come out of work that Labor did when we were last in government, including introducing the two-strikes provisions. It is so important we offer more transparency so that Australians, including shareholders, can look at this and judge for themselves the gap between CEO pay and CEO performance.

We can ask ourselves, as a society, is greed good and how much is enough? I think that when Australians look at these questions they will ask themselves why the government is not responding. Why is the government not even putting up a speaker on this most important debate? It shows, once again, that we have a government that is completely out of touch with working Australians, completely out of touch with any sense of a decent society and a decent economy.