Chris Bowen (Prospect, Australian Labor Party, Minister for Financial Services, Superannuation and Corporate Law) Share this | Hansard source

I move:

That the amendment be disagreed to.

The affect of the amendment passed by the Senate would be to, in three years time, remove completely the threshold which determines which termination payments are put before shareholders for a vote. This was made clear by Senator Xenophon in his remarks to the Senate as he moved his amendment. He said this:

This amendment inserts a creative sunset provision which causes certain exceptions to cease after a period of time. Those provisions are the ones that say member approval is not needed if the retirement benefit does not exceed one year’s base pay. If those exceptions ceased to operate, virtually all retirement benefits would require approval.

That is also the advice to the government about the impact of this amendment. This amendment would say that all termination pay must at all times be put before shareholders, and this would become effective in three years time. This is unacceptable to the government. The government feels that we have struck the right balance by having any termination pay over one year’s base salary go to shareholders. I understand and I accept that the opposition have a different view. The opposition’s view is that it should be one year’s total remuneration. They moved that amendment in the House and they moved that amendment in the Senate, and both of those amendments were defeated.

Having read the Hansard of the Senate it appears to me the most likely outcome, the most likely result, is that senators have created an unintended consequence. It appears to me that the most likely course of events in the Senate—and I understand that these things can happen—is that the Senate approved this amendment not realising the full consequences of what they were voting on. For that reason I want to give the Senate a chance to reflect on this amendment. I am more than happy to make the relevant Treasury officials available to the shadow minister to be briefed on the implications of this amendment, because I think it is quite likely that this is an unintended consequence. The government are not prepared to accept that unintended consequence, but we do not necessarily seek a quarrel with the opposition about the effect of this. We would ask the opposition in good faith to take this on board, and I would ask the shadow minister to perhaps bring to the attention of coalition senators the implication of their decision.

The only circumstance in which I will quarrel with the opposition is if this is not an unintended consequence. If the opposition has done this in full knowledge of the implications, then we will have a quarrel. But I do not intend to make a quarrel with coalition senators if they have not understood the full implications. I understand that things can move quickly in the Senate and that full advice may not have been available to them at that time. If that is the case, I think we should just reject the amendment in this House, send it back to the Senate and ask them to reflect.

If the opposition senators knew the implications of their decision, the only conclusion that can be drawn is that they were inserting a poison pill into the bill—that they were attempting to make this bill unworkable. In that case we will have a quarrel when it returns again to the House. But I do not seek to make a quarrel on this. This is not a matter for political point-scoring, in my view; it is appropriate that a sensible and mature approach be taken. For that reason, I want to give the coalition senators the chance to reflect on their decision and to make the advice of the Treasury available to the coalition through the shadow minister so the shadow minister can bring to coalition senators the results of their actions.

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