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Tuesday, 27 May 2003
Page: 15058

Mr McMULLAN (4:44 PM) —Thank you very much, Mr Speaker; it will be worth waiting for. On page 5 of today's Financial Review we see on one page the government's double standard personified. In the left-hand column we have a report saying:

The chief executive of Telstra, Ziggy Switkowski, would receive a payout equivalent to 52 weeks' salary if he was told to go before his contract expired.

And in the right-hand column we have:

The Minister for Industrial Relations—

and it says here his name is Tony Abbott—

said the minimum standard, set in 1984—

eight weeks—

was fair and reasonable, and should be maintained.

Same page, same newspaper, same day, same government—but two standards. How is it possible to simultaneously believe both things: that 52 weeks is fine for somebody on $2.4 million a year—that is, somewhere between $1½ million and $2½ million dollars—but eight weeks is fine for the average worker? For an average worker on average weekly earnings, that is about $5,000. This is a government that supports redundancy payments of $2 million for the well-paid and $5,000 for the low-paid. It is an extraordinarily stark illustration of the government's proliferating double standards and wrong priorities.

Let me take you to the example raised by the member for Prospect at question time concerning the hotel valet from Sydney who appeared before the Senate poverty inquiry yesterday. This is not one of the government's job snobs; she is not a dole bludger or whatever other invective you want to pour over her. This is a woman who is working very hard to raise five children on the princely sum of $18,000 a year. As the member for Prospect's question made clear today, this woman would have to work for 100 years to earn as much as the government-appointed directors to Telstra believe that the chief executive should be paid. With the chief executive's agreement, they are saying, `We'll pay him this million if he fails; if we feel the need to get rid of him early, we'll pay him $1 million,' whereas this woman is being told, `If you do a fantastic job every year for 100 years, you might just get as much as the chief executive will get for failing.' That is a statement of alternative priorities.

I know that the government will wash its hands of this decision by the directors of Telstra. It will say, `That's an independent decision.' But with any other company when there is a big payout, it says, `We urge the shareholders to have a say.'

Mr McMULLAN —I hear the minister say, `And the directors'. But, when the government is talking about other companies, the Treasurer comes in here and says, `Of course the shareholders can direct the directors as to what they should do.' On 5 March in this place, he explicitly said that: `The shareholders can direct the directors as to what they should do.'

Mr Cox —They won't give you a legislative right to have a vote on it.

Mr McMULLAN —We will come to that point; thank you very much. When the government is the majority shareholder, it suddenly loses interest in shareholder activism—`That's for other people; that's the standard we apply to everybody else—not to us.'

There is another double standard which has been so generously referred to by the member for Kingston. On Sunday the Minister for Revenue was on television—the government really should not let her out on television; every time she appears on television she causes the government problems—and she said, `It's a terrific thing; the shareholders in the UK in Glaxo Smith Kline have sent a clear message.' Those shareholders voted in a shareholders meeting against excessive salary package proposals that the directors were putting forward to that meeting; they voted them down. The Minister for Revenue said, `This is a very good sign.'

The problem is that she and her Senate colleagues, on the instructions of this government, voted down our proposal to give Australian shareholders the same power. We proposed an amendment exactly the same as the British law, and they voted it down. I do not think in this instance it is fair to say it is hypocrisy; I think in the case of this minister it is absolute ignorance. She did not know that she had voted it down. She did not know what her government's policy was. But it cannot be ignorance to advocate at the same time that low-paid workers should get $5,000 and high-paid workers should get $1 million or $2 million or $50 million, as was the case with BHP.

It actually gets worse. Like the woman who gave evidence to the Senate poverty inquiry, many people work in the hotel industry. We all know that the hotel industry employs long-term casuals, people who have been working as casuals for years. We know what their redundancy entitlements are: jack zip; they get nothing. Do you know what the government's policy is? `That is how it should remain.' The government will intervene in this decision against them getting a cracker. If they work 10 times as long as Ziggy Switkowski has worked, the government's view is that they should get nothing. If they work their whole career as casuals—and these days you can, and in the hotel industry lots of people do—they will get nothing. We find this pattern occurring. The government's policy is that they should get nothing—`No redundancies for casuals.' But the government is very casual about giving millions to the well-paid, the people who run the companies that employ the casuals.

The clearest and most unfair element of the government's double standards in this matter is this: `Those who have the most should get the most.' It is nothing unusual. It is exactly what happens, for example, with the baby bonus. The more income you have, the more assistance you get. It is exactly the same. It is not a mistake; it is a conscious, deliberate policy decision of the government to structure the payment so that people with the highest income get the most. It is not surprising.

It also applies to access to universities. If you have more income, you have more avenues of access; you can buy your way in. But if you have a low income you have to work your way in. We have not got a two-tier system in Australia; we have a three-tier system. You have the wealthiest, who can buy their way in; the poorest, who hope they will get the chance to get some sort of scholarship; and everybody in the middle, who gets squeezed. That is happening in more and more areas. It is happening in education and it is happening in health. We are getting double and triple standards here. We are getting triple the benefit up the top end and nothing down the bottom.

Not long ago a very stark table about golden handshakes was produced by the AAP and printed in a number of newspapers. It was not a comprehensive study. To do a comprehensive study, you would have to go through every annual report of every company, and you would have to read behind those reports to find out how much of the remuneration of various executives was that of chief executives. The AAP only went on reported statements to the Stock Exchange and the publicly reported major payouts. It came to an amount of $168 million in golden handshakes. That is a lot of money.

But let us think about the second part of it, where the government has another double standard. At the moment, 30 per cent of that $168 million, or the $50 million last week from BHP, or the $33 million from the Commonwealth Bank, is a tax deduction for the company. They get that off their tax bill and we all subsidise it. That woman who is working in the hotel is subsidising it too. She is subsidising Brian Gilbertson's money. How can that be right? How can that be fair? We have an extraordinary set of circumstances with that $168 million, but the government is determined not to do anything about it. They continue to say, `It is not us.' Let me give you some other examples of double standards. The Minister for Revenue—I said they should not let her out in public—said that we would be going down a very dangerous path if we started to use denying tax deductibility to influence the remuneration policies of governance. Once again, this is probably ignorance, not deliberate misleading.

Mr Bevis —It is just stupidity.

Mr McMULLAN —That is a possibility.

The DEPUTY SPEAKER (Hon. I.R. Causley)—The member for Brisbane has been warned already today.

Mr Bevis —I have.

The DEPUTY SPEAKER —His next move will be out.

Mr McMULLAN —He is being very helpful, Mr Deputy Speaker. It is the case that the Minister for Revenue and Assistant Treasurer probably does not know anything about the tax act. But in the tax act there is a provision, and it has been there for the whole time of her administration and for the whole time of the Treasurer's administration—ever since 1996—and, of course, before, because it is an initiative of the last Labor government. That provision says that, if there are excessive contributions to an executive's superannuation, they are not tax deductible. We already have that law. It has been the law for 10 years, thus for the whole period of the Treasurer's administration. So it is not a question of them saying, `This is a terrible principle. We cannot allow such excessive payments to be tax deductible. It is a heinous principle with which we cannot live,' because they do live with it. They have adopted it, and they have carried it out consistently for seven years. It is that they do not want to do it. It is not that they cannot do it. We have proved we can do it, because we have done it before. It is not that they are opposed to it in principle, because the principle applies. It is that they do not want to act on these golden handshakes.

Any time you ask the Treasurer a question, he will give you a song and dance act in reply. He is quite a good actor but he has no substance. If you ask him two questions, you always get two different answers. When he comes in and you ask him about golden handshakes, he tries to give you a lecture about tax policy—except he is wrong. He consistently says, `Look, the way the tax act works is that companies declare their profit, they get their revenue, they get their expenses, they take one away from the other and they pay tax on the difference, so all their expenses are tax deductible.' Then you say, `But that is not the law, actually. There are already exceptions. We do not allow them to have tax deductions for entertainment. We do not allow them to have tax deductions for corporate yachts. We do not allow those, because we passed a law to stop it.' Then he comes up with a different answer. Then we say, `What about the fact that you do not allow excessive superannuation contributions?' He says, `Every expense is tax deductible, except those carved out for some other reason of public policy.'

Exactly. We want you to carve it out for a reason of public policy, which is, every time someone wants you to take an attitude about excessive golden handshakes, the government will be there in 30 seconds and will express an opinion. They will say, `We understand why the public is very concerned about this, and we will put on a serious face, but don't you dare ask us to do anything about it. We'll run for cover.' We get a different excuse every day, and we will hear another one today. I do not know what it will be. I bet it is not any of those, because none of them make sense. There will be some other excuse. I would love to hear what Senator Coonan's answer would be, but they will not let her out in public again.

If it is good enough to deny tax deductibility for excessive superannuation contributions—and it is—why is it not good enough to take the same action over excessive golden handshakes? Why should these massive payments continue to receive taxpayer subsidy? Ordinary working Australians are subsidising this every day when they work, and they have this outrageous aspiration. They say, `If it is all right for Brian Gilbertson to get $50 million and me to subsidise it, and Chris Cuffe to get $33 million and me to subsidise it, and a lot of other people to get a lot more, why can't I have 16 weeks redundancy pay?' I know that is a pretty terrible attitude for them to have. They ought to be grateful that this kind government has not taken the eight weeks away. They ought to be grateful. They are terrible people. They are saying, `Maybe if these people are worth $15 million, I am worth $10,000.' That is about 16 weeks of average weekly earnings. Actually, I am being a bit generous in saying $10,000. It is a bit less. But we will say $10,000. They reckon that is not a bad deal. I do not think it is a bad deal either.

The head of the Commonwealth Bank said to the government, `Let's sit around and talk about how we can restrain these excessive golden handshakes, including looking at tax deductibility.' He thought it was a reasonable proposition. We think it is a reasonable proposition. The Australian people think it is a reasonable proposition. The only people who do not think that are the government. They think that there are excessive payouts being made and that they are all being paid to workers. The government will not meet the redundancy entitlement of workers beyond eight weeks, but they will let the chief executives have 52 weeks and more and they will not do more than talk. They are all talk and no action on this matter. This affects every working Australian whose superannuation contributions are invested in these companies—whose retirement income is dependent on the success and good governance of these companies. The government's performance on golden handshakes is a litany of double standards, wrong priorities and failure to act. It is a monstrous betrayal of the battlers. (Time expired)