Bob Brown (Tasmania, Australian Greens) Share this | Hansard source

We in the Greens support the concept of people being rewarded for their contribution to the nation. But I ask about a nation in which the CEO of the Commonwealth Bank gets, in an average working day, more than the persons who come here late at night to clean our offices get in a whole year. I ask about an Australia in which the growth in CEO pay has increased six, seven, eight or nine times as fast as it has gone up for ordinary workers—who are every bit as committed to and as important a part of this nation’s progress—in the last three or four decades.

We hear—I heard it just then from Senator Coonan—the argument that we have to be able to increase corporate pay and make sure that our corporate executives go from, presumably, millions of dollars to tens of millions of dollars to hundreds of millions of dollars per annum, as we have seen in the United States, in order to keep up with the rest of the world. It is the exact opposite argument to the argument being put forward by the opposition that we must not do what the rest of the world does on an emissions trading scheme; we should let the rest of the world get everything in place before we make any move at all. Here, we have the opposition arguing that we should stay in front, otherwise we will see not a brain drain but a money-chase loss of our executives out of the country.

Of course, the facts do not support that anyway, when you get to look at them. For example, a recent RiskMetrics study found that, between 2003 and 2007, only 17.3 per cent of confirmed departures of executives from the top 50 companies were of those going to other companies. Indeed, only 4.3 per cent were going offshore. The majority of departures were retirements. It was also found in that study that 57 per cent of those replacing senior executives were internal appointments and that only 18 per cent were recruited overseas.

We Greens have been working hard in the last several years—going back into the Howard government’s years and the period before the global recession—to bring some decency into what the Prime Minister has described as the ‘obscene’ payments going to some of the more greedy executives in the corporate system. It is just not reasonable to have corporate executives, rather than being paid for their work, being given totally illogical and indefensible payments, running sometimes into tens of millions of dollars per annum, and with so-called golden parachute severance payments going, in one case in Australia, to over $80 million.

When you get outside the public sector, there is a mythical concept that, in some way or other, these huge payouts, made supposedly to reward executives, are not paid by anybody and that they are part of the profitability of the company. Of course, nothing could be further from the truth. They are paid for by pensioners, shareholders and ordinary workers and through higher prices at the supermarket, in the bank, in the service industries or wherever it might be. This money is being purloined out of the pockets of poorer Australians in the tens of millions of dollars by people, simply because they have the ability to wangle the system.

The figures all show that this process has not only got worse but accelerated in recent decades. What was considered totally indecent in the United States mid last century is now part of the norm in Australia and has been accepted practice for some decades here. We have the situation where CEOs, by dint of where they are, get hundreds of times the pay level of the people who build the buildings, provide the plumbing, check the electrical work, give us the transport systems, work in our schools and do all the basis work that maintains the fabric of society.

As far back as this time last century, President Theodore Roosevelt was warning about the power of corporations over democracy. He said not only that it could be tackled but that it must tackled, and that the corporations must be put in their place. Teddy, as you know, believed in walking quietly and carrying a big stick. Unfortunately, his idea of being able to contain the self-investment of corporations and the power of corporate lobbyists over the body politic has been found to be totally blighted by the passage of history.

Now we are in a democratic system where corporate executives are almost a law unto themselves when it comes to taking obscene—as the Prime Minister has labelled them—payments from the pockets of their fellow citizens, and parliaments have been remiss. I sheet this home directly to the two big existing parties, who have serially exchanged governance at state and federal levels and who allowed this situation to arise.

Thankfully, we now have the Corporations Amendment (Improving Accountability on Termination Payments) Bill 2009 here in the Senate. As we will see in the coming committee stages, the Greens will be amending this legislation. It is a step in the right direction but it is very short of the mark. Last year the Greens attempted a number of times to amend legislation so that golden handshakes could not be as obscene as the Prime Minister described, but serially he and the Leaders of the Opposition—both Mr Nelson and, now, Mr Turnbull—refused to respond to the actions of the Greens in this place. We will be testing the ardour of the government and the opposition in this matter in the committee stages.

I want to make it clear that this legislation is far from the end of the matter. We will be continuing to bring to this parliament measures that will not deny corporate executives a fair go but will have them share a fair go with the rest of the Australian workforce. That is what it should all be about.

We are supporting this bill but we have a series of good amendments which will improve the outcome. Those amendments would give a stronger hand to shareholders, who most directly are disadvantaged by executives being able to take millions unnecessarily but repeatedly out of the companies’ bottom line. It will therefore more fairly compensate the shareholders, who take the risk. We will also be moving to see that, where shareholders have a vote, it is not just indicative but binding. Why should that not be agreed to in a parliament that believes in democracy?

Why is it that the private sector is so far behind in democracy? Why has the private sector rebuffed all efforts to have an improved democracy? Did it not support the war in Iraq to promote democracy? Does it not support the pursuit of democracy, which, we hear repeatedly from our leaders, should be improved elsewhere around the world? I submit that there is far too little democracy in the private sector and it is high time that we legislated to improve that democratic shortcoming. Some of the measures the Greens will be moving in the committee stages will tempt both the government and the opposition to endorse democracy rather than leave things as we have them at the moment, where shareholders are gnashing their teeth and wondering why they take such risk and why sometimes they see such poor results after a series of announcements in the newspapers has indicated that executives are increasing their pay, even where their performance has been abysmal.