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End the double standard.

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Survey results reported in today’s Australian Financial Review on executive salaries highlight why the Howard Government must address the penalty regime it applies to the unemployed.

The Howard Government is currently considering new tax deductions for Australian CEOs who already receive very high salaries - around 44 times the average wage - in return for requiring business to expense executive options. This is something that companies should be doing in any event.

Next week in the Senate, Labor will be moving amendments to the Government’s Australians Working Together Bill to reform the penalty regime that applies to Australia’s 600,000 unemployed who take home just $375 a fortnight.

At the same time, the average CEO received a pay increase of $30,000 last financial year, more than 100 times the increase a single person on Newstart got over the same period.

In a year in which the ASX/S&P200 fell eight percent, around 65% of CEOs from a majority of the companies that make up this index received a bonus. That is a bonus for poor results.

Contrast this with the harsh penalties regime that applies to the unemployed.

259,000 unemployed people were hit with penalties averaging more than $800 - around 18% of their income for six months - during the last financial year.

Many were penalised for indiscretions as small as missing a meeting or failing to respond to a letter.

Far too many were penalised unfairly. In fact, 43% of penalties that were challenged last year by unemployed people were overturned on appeal.

This shows the Government is manipulating the penalty regime to raise revenue rather than police the social security system.

The Government has two sets of rules - one for the top end of town, and another for unemployed Australians.

No one denies the important role our business leaders perform.

But everyone should deplore the double standard of allowing more incentives to those on extraordinarily high incomes - regardless of performance - while indiscriminately stripping almost a fifth of the income of hundreds of thousands of unemployed people each year.

Labor calls on the Government to end the double standards and reform social security penalties for the unemployed.


06 November 2002 Web:

Contact: Wayne Swan on 0418 795 329 Matt Linden on 0407 430 613

Wayne Swan MP Manager of Opposition Business Shadow Minister for Family and Community Services