Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

I don't believe the government has a role in setting remuneration for employees of any business, including the banking business. The government does not support a cap on the remuneration for accountable persons under the Banking Executive Accountability Regime. Setting of salaries and remuneration arrangements more generally of any private sector business is, ultimately, a matter for shareholders and boards to make decisions on. It is not the role of government to set the size of remuneration payable to accountable persons; these are commercial decisions for an authorised deposit-taking institution to make in line with its policies.

However, the government does have a role in ensuring such policies do not result in perverse outcomes for consumers. This is why the bill includes provisions requiring the deferral of a minimum percentage of an accountable person's variable remuneration for at least four years. This will ensure that accountable persons have clear incentives to make decisions which account for longer term effects on the bank and its customers. Simply capping the remuneration of accountable persons would not provide the incentives that the referral of variable remuneration can, when behaviour of a person is clearly linked to remuneration outcomes.