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Thursday, 16 October 2008
Page: 6182


Senator BOB BROWN (Leader of the Australian Greens) (11:20 AM) —I move:

(1)    Page 2 (after line 11), after clause 3, insert:

4   Payments to executives of entities dealt with by this Act

         (1)    No authorised deposit-taking institution or other entity which has deposits guaranteed, or which is otherwise protected or regulated, under the provisions of this Act shall pay any of its executives an annual salary of more than $5 million, or ten times the base wage of the Prime Minister of Australia, whichever is the lesser.

         (2)    In this section:

executive can include any person engaged or employed by the entity on any basis.

salary includes any remuneration paid, promised or guaranteed in any form, including through consultancy agreements and grants of shares or other interests, and including any payment made upon resignation or retirement, however described.

I have already spoken on the need for this move. I do not believe the Prime Minister’s flagged request to APRA yesterday is going to lead to any sort of regulation of the self-assigned payments going to executives generally, but particularly chief executives, in this area. But, as I said, I believe that, now that the guarantee is coming from the taxpayer, the taxpayer should have some guarantee in return, and it should begin at the top. I quote again from John Kenneth Galbraith in The Culture of Contentment, at page 48, where he says:

… support to failing financial institutions—

including that of commercial banks—

… is a fully defended function of the government, however evident the financial extravagance and extensive and visible larceny that made it necessary.

He is talking about that in the context of the repeated attacks by the very people, the executives, that we are speaking about here on such things as social welfare, unemployment benefits, relief to people who are distressed in the community and the general provision of social services and particularly public funding for public education, public health and even public security these days, let alone public transport—as against the road transport system and the private transport system.

We in this country have a much greater gap between the rich and the poor than ever before in history because of the power and the influence of the people that this amendment is aimed at and their ability to be self-serving and self-seeking and also to put down the people who do the hard work in making sure that our society is what it is. When did any one of these executives ever support a pay rise for nurses, one of the most disgracefully overlooked professions in the country? Nurses are taken for granted repeatedly and left occasionally to protest and have marches in the streets—these people who defend our health, not least the public health system. Whenever did one of these executives support a fair go for these people?

I can tell you what has happened. We now have a system in Australia where the executives are getting 70 times the take-home pay of the average worker—70 times. I have an amendment here which says, ‘At least, let’s restrict them to 10 times the base take-home wage of the Prime Minister of this country,’ who has, one would argue, no less executive responsibility than any of these people. But we are going to find here today that neither of the major parties will support this amendment. That speaks for itself, and that is because of the prodigious lobbying system in this country. It follows maybe a decade or two behind the US, but, nevertheless, the lobbyists for business interests have extraordinary firepower. That includes those who have proclaimed for years against government intervention but who are right behind this intervention now to guarantee their institutions. I have not heard any of those chief executives out proclaiming against this government intervention in the marketplace. It is not even sotto voce; it is just not there at all.

Suddenly, the taxpayers—the nurses, through their taxes, and the teachers, the police and the road workers—are required to back up these multimillionaires who have given no reverse support whatever. In fact, they have opposed many of the moves that government would and should have made to make this a more egalitarian society and to guarantee a fair day’s pay for a fair day’s work. Instead of that, we saw Work Choices, of course backed by these millionaires, being used to intervene in the workplace to prevent unionists, for goodness sake—those vilified representatives of the workers—trying to get a fair go for workers in the workplace.

What an extraordinary outcome this is. This is a blank cheque being written to guarantee the banks, including deposits in branches of foreign banks and financial institutions in this country and borrowings from overseas. The government says, ‘Well, our institutions are in better health, but it is the international financial system.’ This government and the last government are leading supporters of that very same international financial system, and they have failed to get up the regulatory requirements that should be imposed on that financial system and that would have stopped this meltdown in Wall Street.

The minister said that Australia does not have the significant exposure—except at the margins, I think he said—of similar institutions in the United States and Europe. I want to ask him about the exposure of the very institutions we are guaranteeing today to credit default swaps, which the banks have been heavily into to avoid responsibility for bad debts. Mr Tanner, the Minister for Finance and Deregulation, told ABC TV two nights ago that it was ‘not possible to be absolutely precise with respect to the magnitude of that exposure’. In the absence of absolute precision, let us have a general statement to the Senate about what the exposure of these institutions is to these credit default swaps, because we should know. We are being asked to give the guarantee against them being found effectively to be bad debts, so we have a right to know, and we should know. In fact, we have a responsibility to find out what that exposure is in real terms. I would like the minister to give us an answer to that question.