Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

My question is to the Minister for Finance representing the Treasurer, Senator Cormann. Minister, in response to last week's stunning revelations that the Commonwealth Bank facilitated money laundering through its deposit machines, the Greens and a number of investor representatives have called for swift and decisive action to sanction bank executives, including canning their bonuses, cutting their salaries or sacking them. Yesterday, the bank's board cut cash bonuses to executives to placate such calls. Even after taking a haircut, the CEO of CommBank, Ian Narev, will still earn close to $10 million a year. Does the government believe that it is fair that the CEO of a bank that has a rap sheet as long as my arm gets paid $10 million a year?

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

I thank Senator Whish-Wilson for that question. Obviously, the remuneration of employees of businesses across Australia is a matter for the boards of those relevant companies. In Australia, we have a very robust regulatory framework in place when it comes to the financial services sector. We have a very robust prudential regulatory arrangement. We have a very robust compliance arrangement in place. There are a range of law enforcement processes currently underway, and it would not be appropriate for the government to pre-empt the outcomes and the conclusions of those law enforcement processes. I know that Senator Whish-Wilson would like the government to jump to a conclusion and pre-empt the outcome of those processes, but we don't think that's appropriate.

Stephen Parry (President) Share this | Link to this | Hansard source

Order, Minister. Senator Whish-Wilson, a point of order?

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I have a point of order on relevance. I wasn't asking the government to pre-empt anything to do with the court case; I just asked him if he thought it was fair that the CEO of this bank got over $10 million a year.

Stephen Parry (President) Share this | Link to this | Hansard source

Yes, you did ask the minister if he believed that the CEO should get the salary he did, and the minister did clearly outline at the beginning that it's not a matter for the government, it is a matter for the CBA board. I believe the minister is relevant. I call the minister.

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

Senator Whish-Wilson's question and its preamble went directly to some current law enforcement investigations that are underway, and it is not appropriate for the government to pre-empt the specific processes that are currently underway or reach a conclusion or make a judgement on what should happen, depending on the outcomes. What I would say in a general way, without reflecting on any particular case, is that all banks are expected to do the right thing: to comply with the laws and to—

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

And they haven't.

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

And here Senator Hanson-Young is already being the investigator, the judge and the jury. She is already coming to the conclusion of a process that is still underway. But that is not what the government is proposing to do. We will let the processes that are in place run their course.

Stephen Parry (President) Share this | Link to this | Hansard source

Thank you, Minister. Senator Whish-Wilson, a supplementary question?

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I will be a little bit more general then. Some investor representatives have been questioning the salaries of executives of the major banks for some time. At last year's Commonwealth Bank AGM these investors made an unprecedented first strike when they voted against the executive remuneration report. Minister, do you accept that, if executive salaries at the CommBank or other banks don't even meet their shareholders' expectations, then they certainly don't meet community expectations?

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

What you've just referred to—that is, a vote by shareholders—is precisely the way this is meant to work. The owners of the business delegate certain authorities to the board of the business. The board of any business is responsible, among other things, for the remuneration of their employees. In that context, of course, the board is accountable to shareholders, and that is precisely the way these processes are meant to work. It is not up to the government to determine what the appropriate remuneration arrangements are for employees of these companies in the circumstances that you describe.

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Whish-Wilson, a final supplementary question.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Growing inequality is one of the greatest challenges of our time. Housing is becoming unaffordable to a growing number of Australians. Wages growth is at a record low. Yet bank CEOs still take home massive pay packets. Minister, do you accept that excessive executive salaries go to the heart of income inequality in this country, and something needs to be done?

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

Australia is actually the country of the fair go, and, by any measure, inequality has not worsened in recent years. If you look at all of the credible data, it will show you that the level of inequality has not increased in the ways proposed by some. We believe in equality of opportunity. We believe people in providing people with the incentives to be the best they can be—because that is how they contribute to the overall success of our country—and in creating the best possible opportunity for everyone across Australia to get ahead.