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Tuesday, 27 May 2003
Page: 15065

Ms PLIBERSEK (5:14 PM) —I remember the then minister for workplace relations saying in 1998, `Never forget the history of politics and never forget which side we're on. We're on the side of making profit; we're on the side of people owning private capital.' It is as true today as it ever was, and every single day we see a million different examples of this government being on the side of the wealthy and against working Australians in this country.

No clearer illustration can we find than the government's refusal to do anything about obscene executive payouts at the same time as preventing ordinary Australians getting even their basic entitlements if they lose their jobs. There is an absolute unwillingness to protect the rights of ordinary workers.

Tales of excessive executive remuneration and obscene golden handshakes have been rife in recent years. Some of the most notable have included the $33 million paid by the Commonwealth to Chris Cuffe; the $23 million that AMP paid to departing executives; and the BHP Billiton payment to Brian Gilbertson, who walked away with a lump sum of $12 million. Estimates vary about what he is going to get over his lifetime, but $1.5 million a year for life is not too bad. That of course comes after John Prescott getting $11 million out of BHP in 1998 and Paul Anderson getting a further $18 million from BHP. If you are a BHP shareholder, you would be thinking very hard about their executive remuneration schemes.

The Prime Minister has grudgingly admitted that perhaps executive remuneration packages should be linked to performance. He said on Brisbane radio:

The one thing you've got to do is stop entering into absurdly generous payout arrangements in the first place, and very definitely it's got to be geared to performance.

He further said:

What they really resent is people walking away with a pile of money when the company has been unsuccessful.

It does not take a genius to work that out. The Prime Minister has done nothing, however, to end these practices—not a thing. He says it is a `big step' for government to intervene in the executive salary issue. He says:

... once the Government intervenes ... you're effectively saying that you can determine who gets paid what by a private company, that's a very big step that.

It is only a very big step when you are talking about executive pay; it is not a big step for the government to intervene in national wage cases and argue against the moderate increases that the ACTU proposes for low-paid workers in this country. It is not a big step to argue that low-paid workers do not deserve a single extra cent, but it is a big step to prevent executives walking away with $30 million or $50 million payouts.

What is interesting is that the government think that the market can sort out all these problems. Unfortunately, a recent Sydney University report into executive remuneration suggests this is not the case. The report, which was commissioned by the New South Wales Labour Council, in fact found the opposite: the more you pay executives, the worse their performance seems to be. It found that in the 20 best-performing corporations executives were paid an average of about 20 times average full-time weekly earnings, or about $1 million per annum. The 20 worst performers paid their CEOs three times that amount, or $3 million per annum.

The Minister for Employment and Workplace Relations kept referring to the Keating government in relation to this issue of executive remuneration. At the time of the Keating government, the pay of the top 50 executives was about 22 times average full-time weekly earnings. That has jumped to 74 times average full-time weekly earnings. We are not talking about the same problem; we are talking about a problem that is out of control.

Remember the chairman of Newcrest awarding his board of directors a $300,000 pay rise in a year when Newcrest made a $53 million loss; or a director of Macquarie Bank taking home a $4.2 million bonus on top of his pay in a year when company profits slumped 35 per cent? Certainly these pays are not performance related.

When the minister for workplace relations did introduce some legislation in 2002 after the appalling events at One.Tel and the $14 million bonuses paid to Jodee Rich and Brad Keeling, the legislation was totally inadequate. It certainly did not go anywhere near the legislation brought in in the United States, and the very sensible suggestions that we made were rejected by the government. We had to come up with our own suggestions in this area because the government has failed to act so consistently.

We have said that shareholders should have a right to veto executive packages when they are excessive, in the same way that this right exists in Britain, a right that was exercised recently at a GlaxoSmithKline meeting of shareholders at which the chief executive, Jean-Pierre Garnier—who would have been paid 22 million if he were fired—was told by shareholders that that was just not appropriate. The government wants us to be a nation of shareholders but it does not want us to be active shareholders. It does not want involved shareholders who hold executives to account.

The second proposal that we have put forward is that we should stop making these payouts tax deductible. Figures from March this year show that executive payouts have cost taxpayers—taxpayers, not companies—$49.9 million. That is $50 million worth of subsidy for these executive payouts. If companies want to pay executives $30 million or $50 million or whatever and the shareholders agree then let the companies bear the cost of those incredible payments. We say that payments over $1 million should not be tax deductible.

The government's glaring inability or unwillingness to take on their big business mates is in sharp contrast to their willingness to stomp on ordinary workers. The government have consistently resisted every effort to give ordinary workers decent redundancy payments. The ACTU test case that the government are opposing would establish a fair minimum standard for all long-serving employees regardless of where they live or work—including casuals, who currently receive no redundancy entitlements at all, no matter how long they have been in a job.

The minister for workplace relations naturally is treating this proposal like a disaster: the sky is going to fall in; it is the end of capitalism as we know it. We have heard this afternoon that it is a return to socialism! Every time a protection is proposed for ordinary workers in this country it means massive redundancies, according to this minister for workplace relations. You wonder whether we would ever have got a 40-hour week under this minister. Sixteen weeks of redundancy pay for ordinary workers is the end of the world but a year for Ziggy Switkowski is just fine according to this minister.

The government's own efforts to protect employee entitlements have been absolutely dismal—unless you happen to be Stan Howard, in which case they have been perfectly good. A recent Auditor-General's report into the Employee Entitlements Support Scheme, which was replaced with the General Employee Entitlements and Redundancy Scheme—or GEERS as it is affectionately known—said that this `was not a well-managed program'. That is what the Auditor-General said. A significant number of claims were not cleared within a year and some took longer than two years. This is for a scheme that does not pay 100 per cent of employee entitlements, a scheme that is capped; so if your boss goes broke so do you. Workers who have worked for many years, many decades, do not get the money for which they have worked and to which they are entitled.

The member for Prospect has introduced a private member's bill into this place six times now, seeking to remedy this situation. Labor has a scheme that would pay 100 per cent of employee entitlements in the event of company insolvency, with the very moderate impost of a 0.1 per cent payroll levy. Reports into insolvency suggest that workers from insolvent companies around Australia could be losing over $140 million annually, and this government absolutely refuses to act. What happens on retirement? If you are the Governor-General, you get $150 a year for the rest of your life—

Opposition members—That's $150,000!

Ms PLIBERSEK —$150,000 a year for the rest of your life. This is for a Governor-General who has let down the children that were under his care when he was Archbishop of Brisbane and a Governor-General who has let down this country—yet an ordinary worker could not dream of riches like that, certainly not as an annual salary or wage. That is more than most workers can expect to see in their superannuation payout, particularly if this government has its way in watering down and weakening superannuation in this country. This government has become absolutely legend for its double standards, but nowhere is its hypocrisy more apparent than in the area of redundancy pay, where there is one rule for wealthy executives and another for ordinary workers.