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

The Greens have two amendments to move this morning to the Treasury Laws Amendment (Banking Executive Accountability and Related Measures) Bill 2018. The first one I will move immediately. By leave, I move Greens amendment (1) on sheet 8342 revised:

(1) Schedule 1, item 1, page 20 (lines 8 to 25), omit section 37G, substitute: 37G Pecuniary penalty for non-compliance with this Part.

  (1) An ADI is liable to a pecuniary penalty if:

  (a) an ADI contravenes its obligations under this Part (other than this Division); and

     (b) the contravention relates to prudential matters.

  (2) The maximum amount of pecuniary penalty is an amount at the rate of 10 penalty units for every $1,000,000 in assets, of the ADI within the control (however described) of the part of the ADI's banking business that is carried out in Australia.

  (3) In determining the pecuniary penalty, the Federal Court of Australia must have regard to the impact that the penalty would have on the viability of the ADI.

  (4) Subsection (3) does not limit subclause 1(3) of Schedule 2.

  (5) This section is a civil penalty provision.

This amendment in a nutshell directly relates any penalties or punitive measures to accountable persons or executives to their size under this scheme. We believe that an ADI, an authorised deposit-taking institution, which is liable for pecuniary penalties, should receive a penalty in line with their company size or their value. So the bigger the bank the bigger the fine. It's pretty simple and it's outlined in the amendment. We believe that the maximum amount of pecuniary penalties is an amount at the rate 10 penalty units for every million dollars in assets for those ADIs that are captured by this legislation. There are some more detail in there, and I presume, of course, all the senators have read it. We think it's pretty straightforward and self-explanatory. I'm not sure why you wouldn't support it.

Just before we put that to the vote, I do need to clarify one thing you said, Senator Cormann, in relation to deferred remuneration. In your second reading speech you talked about deferring the variable component of captured persons under this legislation and you said it was for at least four years. My understanding is that it was up to four years in the legislation. Could you clarify that, please?

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

) ( ): The legislation prescribes four years, and so it will be four years unless there are exceptional circumstances.

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

Just to be clear, Minister, up to four years or at least four years? In your second reading speech you implied it was a minimum of four years, but my understanding is it is up to four years—so a maximum of four years.

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

It is four years.

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

Could it be one year? Could it be two years? Could it be three years? Can we clarify this, please.

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

My advice is that the minimum amount to be deferred must be deferred for at least four years.

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

Thank you for clarifying that, Minister.

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

I'm now speaking to the amendments moved by Senator Whish-Wilson. The government will be opposing this amendment. The government considers the civil penalties are set up at an appropriate level to provide a strong deterrent for poor behaviour by banks. These penalties equate to maximums of $10.5 million for small authorised deposit-taking institutions, $52.5 million for medium-sized authorised deposit-taking institutions and $210 million for large authorised deposit-taking institutions. These are tough penalties and substantially higher than the penalties generally available under the Commonwealth legislation. They provide a clear incentive for banks to ensure they comply with the requirements of the Banking Executive Accountability Regime. In contrast, the penalties proposed in this amendment would, in many cases, grossly exceed the maximum penalties currently provided for under the Banking Executive Accountability Regime. For example, for large authorised deposit-taking institutions, the maximum penalty would increase from $210 million to over $1 billion. The maximum penalties for some small and medium authorised deposit-taking institutions would also increase under the proposed amendment. The Banking Executive Accountability Regime has been carefully calibrated to operate proportionately across banks of different sizes. This amendment would adjust that calibration to the detriment of the small and medium authorised deposit-taking institutions. The civil penalties proposed by the government strike the right balance between providing a strong deterrent to poor behaviour by banks and ensuring they are proportionate to the size of authorised deposit-taking institutions.

I also reiterate that these are maximum penalties. In imposing a civil penalty, a court is required to take into account the nature of the breach of the Banking Executive Accountability Regime, the extent of loss suffered and the impact of the penalty on the viability of the bank, amongst other factors.

Deborah O'Neill (NSW, Australian Labor Party, Shadow Assistant Minister for Innovation) Share this | Link to this | Hansard source

Labor will not be supporting this amendment. This amendment seeks to replace the current tiered penalty regime under the BEAR with a sliding scale of penalties. We note that submissions to the Senate inquiry into this bill stated that the maximum penalties under the government's bill are a greater proportion of the size of small and medium ADIs compared to the large banks. However, this amendment ties the penalties to what seems an uncertain definition of what the banks' assets are. This would lead to uncertainty over applicable penalties for individual ADIs. While we note the intent to have penalties set at a more proportionate level, an effect of the formula in this amendment will be to significantly increase penalties for many small and medium ADIs. This could have an impact on the ability of these small and medium ADIs to compete.

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

Before I get to another question to Senator Cormann, I have to respond to Senator O'Neill. I've been hearing about grizzly bears and teddy bears in this place for two days now from the Labor Party. They wanted a regime that's going to be like a grizzly bear—a bear that's got teeth and claws and rips into the banks and makes sure we get some solid action here—and here they're knocking back a simple amendment that, yes, would significantly increase potential pecuniary fines on the banks for bad behaviour. That's why we've done it. I would have thought that was pretty straightforward and exactly what you were seeking, having listened to all your second reading speeches. So I am disappointed that Labor will not support this.

I do take on board your views about total assets, but that is actually quite clearly defined. In any banking analyst's report, you'll get a definition of how the assets or net assets are calculated for the bank. So I don't personally think that's an issue, but, if the Labor Party had a problem with that, they could have talked to us about it and we could have clarified that or included it in the amendment. The amendments have been circulated for some days now, so I do see it as probably a bit of an excuse to just not support a good Greens amendment.

Minister, you mentioned that there's a gradation in the fines or pecuniary penalties for different sized banks and that the top-tier banks' penalties are set at a maximum of $210 million. Is the minister aware that the size of those tier-1 banks is very variable? For example, the market capitalisation of the Commonwealth Bank is about $140 billion as we speak, whereas National Australia Bank is half that at just over $70 billion. How is it fair that the Commonwealth Bank, which is a much larger bank, gets to pay the same penalty as a bank half its size?

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

Yes, I'm aware that different businesses in Australia are of a different size. I'm aware that different banks are of a different size. I know that, among the big banks, some are bigger than others. But it's not appropriate for parliament, the government or legislators to tailor-make penalty arrangements for individual businesses. It's not unusual for certain tiers to be determined and for certain categories to be established and, as I indicated in my primary response to the Greens amendment, the government believe that we've got the balance right and that we've got the categorisation of small, medium and larger banks right.

Rex Patrick (SA, Nick Xenophon Team) Share this | Link to this | Hansard source

I'd like to take this opportunity to put on the record the Nick Xenophon Team's support for this bill. A new accountability framework for the banks and for senior bank employees is long overdue. The Nick Xenophon Team welcomes the delayed implementation for small and medium banks, credit unions and building societies. While the bill may not be perfect, it should not be opposed. The royal commission into misconduct in the banking superannuation and financial services industry is finally underway, and I sincerely hope this will lead to a change in the culture that has adversely affected the lives of so many consumers.

The royal commission will also examine the need for a last-resort compensation scheme for victims of bad financial advice and misconduct. A number of senators in this chamber would be aware of the strong advocacy by former Senator Nick Xenophon on the issue of a last-resort compensation scheme. A last-resort compensation scheme is the only way to ensure that customers who suffer loss from misconduct are compensated. It is a missing piece of a financial services regulatory framework. The Nick Xenophon Team looks forward to seeing the recommendations of the royal commission in relation to last-resort compensation schemes.

I will also take this opportunity to indicate the Nick Xenophon Team's position on the amendments circulated by Senator Whish-Wilson. We do not support the amendment on sheet 8342 relating to executive caps. Whilst we agree that the pay packets of many CEOs in the financial services industry are far from perfect and ought to be reformed, it is the shareholders who ultimately bear the cost of paying the CEO. The direct intervention approach as proposed by the Greens is not an approach that is supported by the Nick Xenophon Team, but we do believe that the issue of executive pay is a debate worth having.

I can indicate that we will be supporting the amendment on sheet 8343, as the penalty regime does not adequately reflect the difference in size between big banks and the smaller regional and customer owned banks. The entire profit of the customer owned banking sector in 2016-17 was $487 million. In contrast, the Commonwealth Bank announced today a $4.8 billion half-year profit. We believe that this amendment will prevent any disproportionate impact on smaller banks and assist in discouraging activity within banks that gives rise to prudential risk. In closing, I'd like to acknowledge the work of the Economics Committee and thank those who made submissions to the inquiry into this bill.

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

Before I get to my next question to Senator Cormann, I might say, for Senator Patrick's benefit—and I did cover this in my second reading contribution yesterday—that the Israeli parliament looked at this issue of executive caps, starting with their own version of a parliamentary inquiry in 2010. At the time it was very progressive legislation around executive caps, and it took the approach that you mentioned, whereby they said that they wanted to give shareholders, especially, more transparency and more say in setting executive caps for the banking sector. That legislation was passed in 2012, but they found that it led to no change at all in the executive salary caps. Then in 2016, four years later, they passed the first legislation internationally capping executive salaries at very similar levels to what we're proposing. Any banker who earns more than that gets a massive amount of tax, and basically it's not worth it. They came to the conclusion that, left to their own devices—many of the big institutional shareholders that control the banks are part of the market system and part of the same ethos, the profit ethos, that drives the banks and a lot of the bad behaviour. But their decision wasn't just about bringing the banking sector into line and holding it to account. It was also fundamentally a question of equity and a moral argument about inequality in their own country. If a banker earns $1½ million, that's still a hell of a lot more than most people will ever earn. It's still 100 times your average weekly earnings. They felt that was sufficient.

Interestingly enough, the bankers association in Israel challenged it in the Supreme Court, as you'd expect they would, and failed. So, they were the first country in the world to do it. And I don't often get up in this place and speak about Israel, but in this case I think they've led the way and there's absolutely no reason we can't do the same thing. So, I will just say that, which I did cover during the second reading debate yesterday.

Senator Cormann, my last question to you, you'll be pleased to know, on this amendment is on the differences in the sizes of the tier 1 banks. As you just agreed, those banks are very different sizes. The Commonwealth Bank is nearly twice the size of the National Australia Bank. Isn't that fundamentally also accepting that those different banks will have different advantages and disadvantages in funding a penalty, if it's capped at $210 million? Essentially, by saying that, given the funds available to CommBank, it'll be twice as easy for them to pay a fine of $210 million based on their market capitalisation. I think that we actually need to differentiate all banks on the size of their assets.

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

I've answered that question. The answer to the initial question is no, and the government believe that we've appropriately calibrated the penalties according to the various tiers, as I indicated in my initial response. We believe we've struck the right balance, and there's not really anything further I can add.

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

Market caps are a pretty blunt instrument to go on because there are all sorts of other types of financing banks go into apart from equity, but it is a value of the bank based on the issue holder's equity and, listed on a stock market, it changes all the time. However, it's a fundamental principle that, for a bank half the size, it's going to be twice as difficult to pay the same fine as a bigger bank. I will leave it at that and let the Senate decide.

I'll just finish by saying that I can't get this vision of a teddy bear out of my mind, Senator O'Neill. Something warm and cosy that helps you sleep at night; that's what this is. We're putting the offer to the Senate to put a brown, black or grizzly bear in bed with these bank CEOs when they go to bed at night-time, and I would urge the Senate to think about that and support the Greens amendments.

Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source

The question is that amendments (1) and (2) on sheet 8342 revised, moved by Senator Whish-Wilson, be agreed to.

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

by leave—I move amendments (1), (2) and (3) on sheet 8343 together:

(1) Schedule 1, item 1, page 4 (line 15), after paragraph 37(1) (b), insert:

(ba) its executive remuneration obligations; and

(2) Schedule 1, item 1, page 12 (line 18), before Division 4, insert:

Division 3A—Executive remuneration obligations

   37DC Cap on remuneration of accountable persons

     (1) The executive remuneration obligations of an ADI are to ensure that the ADI does not pay an accountable person of the ADI remuneration for a period (the pay period) that would result in the remuneration of the accountable person for the pay period exceeding the remuneration cap for the pay period.

     (2) The remuneration cap for an accountable person of an ADI for a period starting in a reporting period for the ADI is the amount worked out using the formula:

number of days in t h e period number of days in t h e reportin g period x 10 x AAWE

where:

   AAWE means the annualised average weekly earnings for the reporting period for the ADI.

     (3) The annualised average weekly earnings for a reporting period for an ADI is the amount worked out using the formula:

number of weeks in t h e reporting period x AWE

where:

AWE (short for average weekly earnings)means the amount published by the Australian Statistician in a document titled "Average Weekly Earnings" under the headings "Average Weekly Earnings, Australia—Original—Full-time adult average weekly total earnings" (or, if any of those change, in a replacement document or under replacement headings) for the most recent index reference period before the start of the reporting period.

   37DE Cap on variable remuneration of accountable persons

     (1) In addition, the executive remuneration obligations of an ADI are to ensure that the ADI does not pay an accountable person of the ADI variable remuneration for a period (the pay period) that would result in the variable remuneration of the accountable person for the pay period exceeding the variable remuneration cap for the pay period.

     (2) The variableremuneration cap for an accountable person of an ADI for a period starting in a reporting period for the ADI is the amount worked out using the formula:

number of days in t h e period number of days in t h e reporting period x 5 x AAWE

where:

   AAWE means the annualised average weekly earnings for the reporting period for the ADI.

     (3) The annualised average weekly earnings for a reporting period for an ADI is the amount worked out using the formula:

number of weeks in t h e reporting period x AWE

where:

   AWE (short for average weekly earnings)means the amount published by the Australian Statistician in a document titled "Average Weekly Earnings" under the headings "Average Weekly Earnings, Australia—Original—Full-time adult average weekly total earnings" (or, if any of those change, in a replacement document or under replacement headings) for the most recent index reference period before the start of the reporting period.

     (4) For the purposes of subsection (1), in working out the maximum amount of variable remuneration that may be paid to an accountable person during a period, any deferral of variable remuneration under Division 4 of this Part during that period is to be ignored.

(3) Schedule 1, page 31 (line 9), after item 15, insert:

   15A Cap on remuneration and variable remuneration of accountable persons

     (1) Division 3A of Part IIAA of the Banking Act 1959 as inserted by this Act applies in relation to the remuneration and the variable remuneration of an accountable person only if the decision granting the accountable person the remuneration or variable remuneration was made on or after 1 January 2019.

     (2) Despite subitem (1), if an accountable person's remuneration or variable remuneration is payable under a contract entered into before the day this Act received the Royal Assent, Division 3A of Part IIAA of the Banking Act 1959 as inserted by this Act does not apply in relation to the remuneration or variable remuneration until 1 January 2020.

     (3) Despite subitem (1), if:

     (a) an accountable person's remuneration or variable remuneration is payable under a contract entered into before the commencement of Part IIAA of the Banking Act 1959 as inserted by this Act; and

     (b) apart from this subitem, the application of Division 3A of that Part in relation to the remuneration or variable remuneration would result in an acquisition of property (within the meaning of paragraph 51(xxxi) of the Constitution) from a person otherwise than on just terms (within the meaning of that paragraph);

that Division does not apply in relation to the remuneration or variable remuneration to the extent that it would result in such an acquisition.

Note: Because this subitem prevents Division 3A of Part IIAA of the Banking Act 1959 from giving rise to such an acquisition of property in relation to remuneration or variable remuneration payable under such a contract, compensation will not be payable under section 69E of that Act.

We've already talked about this this morning, and I certainly did in my second reading speech. The Nick Xenophon Party have indicated they won't be supporting the amendments before the Senate today to cap executive salaries. I am glad that One Nation is going to support the amendments to cap executive salaries. No-one can justify the salaries that are paid by shareholders to the bank CEOs in this country. Our banks are some of the most profitable in the world and our CEOs are some of the most highly paid CEOs in the banking sector on the planet. These amendments before us today, amendments (1), (2) and (3), will put a cap on both variable and fixed remuneration.

Fixed salaries are 10 times average weekly earnings, which roughly works out at about $850,000, double what our Prime Minister makes, so bank CEOs still make a lot of money. The variable component's half that, so it still takes them to well over a million dollars. As I mentioned earlier, this is in line with what the Israeli government capped their bankers' salaries at. They took some firm action. When that vote went to their parliament, it was 56-zero—56 MPs voted for it and zero voted against it. They got to the point where they all agreed that their banking CEOs were paid too much. There was no need for it, it was counterproductive and it only added to inequality in their country. They saw capping the salaries of bankers not just as an economic argument but as a moral argument. I argued in this place in my second reading speech that we have the right to do that as a government because bankers are an unusual breed and they have a privilege to operate in this country that is given to them by the Australian taxpayer. They have a licence given to them by the taxpayer, the voters and the government that allows them to operate and then they're insured against failure through the too-big-to-fail guarantees. They work in a very privileged environment and they literally are given a licence by the Australian people to print money.

I want to make this very clear: the Treasurer talked in his second reading speech in the other place about bringing bank executives more in line with community expectations. I have no doubt at all that, if you go outside these walls and speak to Australians, the expectation of nearly every Australian you speak to is that these salaries cannot be justified. They are excessive, totally unnecessary, inequitable and unfair, and they add to inequality in this country. If government can play an active role in setting minimum wages in Australia, why can't we also play a role in setting maximum wages, especially in an industry that's regulated by the government? It's part of our constitution. The Banking Act very clearly talks about governments issuing a licence to bankers and playing an active role in regulating this industry. As we know, if the financial system collapses, there's corruption or there's instability then it affects every single one of us.

Lastly, I have no doubt about the rotten culture, which everyone has acknowledged—even Senator Cormann tacitly acknowledged it in his speech in the second reading debate today—and the need for this legislation. Believe me, that is a big turnaround from four years ago, when we were having the FOFA debate in this place and Senator Cormann clearly said it was just a few bad apples in the banking industry. I'm glad he's come to the view now that there are some systemic issues and that this legislation is here today because of those systemic issues. I accept that it's more about prudential issues than it is about bad behaviour and adverse consumer outcomes, but nevertheless at least it is something.

We accept there's a rotten culture, and there has been in the banking sector. There have been numerous scandals. We've talked about them ad nauseam in this debate. The only way that you can fix that profit-before-people culture, that profit-at-all-costs culture, is to cap CEO salaries. It's the simplest and easiest way to do that, because the culture of an organisation starts at the top. If CEOs know they're not going to earn $10 million or $20 million this year based on massive returns, there'll be a lot less pressure throughout the organisation to constantly make profits and do all the kinds of things that we've uncovered in our Senate inquiries, like sell to people products they don't want, charge excessive fees and charges to their customers, rip off customers or carry out unconscionable conduct. That's our view. I won't talk about that anymore. I will simply ask Senator Cormann to at least address this when he responds to this amendment. Senator Cormann, do you believe that bankers' salaries are excessive and do you believe the government has a role in limiting them?

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

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

In terms of incentives, if a variable remuneration is deferred for four years—and let's say the variable remuneration, the bonus, is $5 million—what kind of opportunity costs are going to be carried by that particular CEO or executive, Senator Cormann? What is the real penalty of having your remuneration deferred for four years? You still get it four years later. We're not talking about very significant costs. It's hardly an incentive.

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

What Senator Whish-Wilson has said is not quite right. Firstly, there's the provision where payments of variable parts of the remuneration can be deferred for at least four years. But, if there is conduct in breach of the Banking Executive Accountability Regime, my advice is that there is a requirement for the bank to reduce your variable remuneration. There is a penalty, which we are confident will focus the relevant people's minds.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

One Nation will support this amendment put up by Senator Whish-Wilson of the Greens. We are going to support this because I think what the banking executives get in their remuneration package—between $10 million and $20 million—does not pass the pub test as far as Australians are concerned. The minister states that it is not the government's responsibility to get into private business, but this is not the government getting into private business. As I see it, the banking sector is a necessity that Australians have to use. It is a service that is important to their everyday needs and requirements in running their businesses and their lives. It is something Australians have to use.

The fact is that the Australian taxpayer guarantees the banking sector, so we do have a very important decision to make here, because if ever the banking sector were to fail then the taxpayers would be picking up the bills. So the taxpayers do have a right to have an input and a say into the remuneration that is paid—which is out of the realms of common sense. It is important that we have this discussion and the Australian taxpayers have a right to know the government's stance on this and why the government are not prepared to rein it in, when there is another country in the world that has done the same with their banking sector.

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

Can I just quickly ask Senator Cormann: do you agree that remuneration has been part of a problem of poor culture in the financial services sector in recent years?

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

As I've indicated in my primary response, it is not a matter for me or for the government to have a view or to take decisions in relation to the level of remuneration of any employee in the private sector business. It's a matter for that business, that business's shareholders and their boards. We will have to agree to disagree. I understand the Greens and One Nation take a different view. You're entitled to take a different view, but that is not the government's view and it's not my personal view.

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

Is Senator Cormann aware that the previous chair of ASIC, Greg Medcraft, said that he believed remuneration was clearly a driver, particularly in finance, because finance is money, when he was asked this same question? Is the minister aware that Mr Medcraft, who obviously spent a lot of time looking at misconduct and issues within the banks, believed their remuneration structures were part of the problem?

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

Your amendment doesn't deal with remuneration structures. Your amendment is seeking to cap the level of remuneration, which is not what I understand Mr Medcraft talked about in any event. I think I clearly expressed the government's view and I think I have very clearly expressed my view.

Deborah O'Neill (NSW, Australian Labor Party, Shadow Assistant Minister for Innovation) Share this | Link to this | Hansard source

I want to put on the record that Labor will not be supporting this amendment. The fact that this amendment has been raised so late—in fact it only emerged this week and really wasn't raised until this week—suggests that this amendment is more about grandstanding than considered policy to address this issue with banks, of which Labor is very, very aware. The ultimate sign that it is a stunt is that we have One Nation and the Greens voting together. This amendment would not fix issues with the banks that have come to light over recent years. Evidence has not been provided to suggest it would have the impact of addressing cultural issues and poor practices in banks. Labor has consistently argued that the most crucial thing needed to address cultural issues, misconduct and poor practices in the banks is a royal commission. Banker wages need scrutiny, but this must be done in a considered and careful way, and only a royal commission can properly attend to this matter, amongst many others.

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

This will be the last contribution from me. My colleagues and I want to move on to the next pieces of legislation. I can't let Senator O'Neill's brief contribution go unanswered. Senator O'Neill said that Labor believes the best way to tackle culture in the banks is through a banking royal commission. While I agree that it's certainly an important part of this debate, may I remind Senator O'Neill—through you, Chair—that, when I raised a motion in this place over three years ago, to have a banking royal commission for exactly this reason, Labor didn't just oppose it; Senator Dastyari made a public statement that it was a 'Greens' stunt'. I remember seeing some people on social media saying, 'If it's a Greens' stunt, Sam, it's a good one. Support it.' Anyway, we don't need a history lesson. But Labor did fall behind our push for a royal commission and, I will say, Senator Williams's and other people's push for a royal commission. I think it's ironic that I'm being told this is a stunt today when it is exactly what I was told when I was pushing for a royal commission into the banks to try to help fix the cultural problems that we have in our financial services sector.

I accept that this is going to be revolutionary and radical to some, but it's not going to go away. Other countries are looking at this. This debate about excessive executive remuneration in financial services is happening right around the world. Nothing else is working. You can't leave this to shareholders. If we want to look at the larger debate of inequality in this country then we actually have to look at not only how we raise minimum wages, which we desperately need to do in this country, but also how we cap ridiculous maximum wages at the top end of the spectrum. We need to do both if we're going to fix inequality and close the gap.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

I also need to respond to Labor's comments with regard to this. To say that it was a stunt between One Nation and the Greens is absolutely ridiculous. There's no basis to that comment whatsoever. No talks or negotiations have actually happened between our offices. We actually came to the decision this morning after reading the legislation and reading the amendment. It was common sense for One Nation to actually support the Greens' amendment to this.

To hear Labor say this is rushed through and this is political—I've seen them rush through so many things in this chamber when it suits them. The whole fact is that One Nation along with the Greens have been pushing for a royal commission, and I'm very pleased to see it happen as well. To hear Labor many a time grandstand about the workers and what they're paid in this country, bleating from the bleeding heart, and then say that they're going to support uncapped executive salaries is looking after their mates as far as I'm concerned. They don't really care about the workers in this nation who are struggling; they look after their mates. So it's all bleating as far as I'm concerned when they support the government or they don't support the amendments put up. The Australian people will in their own minds think, 'Why would anyone be entitled to receive $10 million to $20 million a year in remuneration?' It's just way out of the ballpark, and Labor can never justify that.

Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source

The question is that amendments (1), (2) and (3) on sheet 8343, moved by Senator Whish-Wilson, be agreed to.

Bill agreed to.

Bill reported without amendments; report adopted.