Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Hansard source

Parliament is not being sidelined. The fact that we are here dealing with this legislation indicates that the parliament is not being sidelined, Senator Brown. There are a range of accountability matters, issues, reports et cetera that have been outlined in the second reading speech. Secondly, you continue to refer solely to banks. It is not just banks we are dealing with; it is in respect of credit unions and building societies as well.

Thirdly, you refer to a public guarantee for private incompetence. I would just point out that we do not face the situation in Australia that is faced in the US or the UK, for example. There is a big difference between a guarantee and a bailout. We have seen bailouts in the US, the UK, Iceland, France, Italy and Germany. There is a very different set of scenarios and outcomes in those countries where they had to bail the institutions out. They have had to nationalise them or force merge them—and ignore their competition laws in the case of the UK—or provide them with funding to remove the toxic assets. It is very different—they are bailouts. In referring to the Australian circumstances, I think it is overly strong to say ‘a public guarantee for private incompetence’ in the Australian context.

With respect to the executive pay issue—I am sure Senator Brown is well aware, as Senator Coonan is; I think we debated executive pay in another context when the Senate last sat, in the last sitting week—APRA has prepared a set of principles which ensure that short-term risk-taking behaviour is not rewarded. APRA is considering how to best link those principles to capital requirements. The G20—the major 20 economies of the world—have endorsed work on executive salaries and have worked, at the urging of this government, to have the International Monetary Fund and the Financial Stability Forum consider these matters. We will provide the Senate with an outline of the government’s initiatives in this area next week, as per the Senate motion.