Speeches

Speech - Adjournment Debate (Income Inequality)

February 16, 2017

HON. WAYNE SWAN MP

FEDERAL MEMBER FOR LILLEY

 

ADJOURNMENT DEBATE (INCOME INEQUALITY)

FEDERATION CHAMBER, CANBERRA

THURSDAY 16 FEBRUARY 2017

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I want to talk about income inequality this morning. Income inequality and wealth inequality is growing and it has emerged as one of the greatest challenges of our generation. It is serving as a catalyst for political instability and it is producing stagnating living standards for working people across the developed world. Over the last 30 years Australia has done better than most in ensuring social equity while maintaining strong economic growth—but of course that record is now under threat from the trickle-down policies of the Turnbull government. As a country we have always prided ourselves on our ability to share our increasing wealth—a core tenet of the fair go which is so integral to our national identity. That is why perhaps this week the salary of Australia Post's CEO of $5.8 million was shocking for so many Australians. This of course is not an outlier—the package ranks a paltry 32nd on the list of the highest paid CEOs in our country today.

This extraordinary pay packet barely scratches the surface of the continuing trend of skyrocketing executive wages under the coalition's watch. Today the top 10 CEOs in Australia each earn more in a single day than the bottom 20 per cent of households take home in an entire year. This is simply obscene. Wage growth has stalled at historic lows for the rest of the country. The CEOs of two major companies recently saw their pay cheques increase by 200 per cent and 280 per cent respectively this year. Increasingly, boards are skirting disclosure agreements by concealing the salaries of key managerial positions in order to hide the ballooning pay of their bosses from shareholders and the Australian people. These dishonest tactics do little to restore the faith the public lost in big business, particularly during the global financial crisis and the great recession. Simply put, ordinary Australians are sickened by executive wages that are hundreds of times larger than those of the people they employ.

When I was Treasurer in the Gillard government, we introduced legislation that sought to shine a light on the boardrooms and to hold those boardrooms accountable for the decisions they made on executive pay. These reforms introduced a two-strike rule, a measure that would spill boards who repeatedly agreed to outrageous executive pay packets. Judging from the ongoing behaviour of some executives today, the two-strike rule was clearly one too many. If we are to deal with the outrageous pay rorts of executives in Australia, boards must know that their jobs are on the line unless they act responsibly. That is why I believe we need to replace the two-strike rule with a one-strike rule. I propose a 'one strike and you're out' rule—that is, when a company's pay report receives a no vote of 25 per cent or more, the shareholders will vote at the same AGM as to whether the board itself should be spilled.

I am not holding my breath waiting for action from the Turnbull government on this critical question. The reprimand last week by the Prime Minister to the Australia Post executive cannot obscure the fact that he is part of this trickle-down racket. He is part of an overpaid and overpowered corporate and financial elite that are imposing trickle-down economics on ordinary working Australians. The coalition is more than content to let the Business Council of Australia and its allies dictate policy to it on his watch. And what is that policy? Wage cuts and tax increases for working people, and tax cuts and unfettered market capitalism for executives like the Prime Minister. He is as blind to inequality as he is to irony: the irony of a former partner at Goldman Sachs publicly chiding a fellow member of the affluent and well-to-do for earning too much.

Rather than take real steps towards tackling income inequality, the Prime Minister has returned to parliament in this term with an even more aggressive and vicious trickle-down agenda, as we can see laid out in the parliament day after day. It is quite clear where the Prime Minister's loyalties lie, and it is not with ordinary Australians. It is now widely recognised that income inequality is not inevitable. It is not an inevitable result of economic growth but rather the side effect of deaf governance and nasty 'survival of the fittest' policies.

Ensuring fair and equitable wages for all Australians has to be central to promoting inclusive prosperity. It is time we held boards accountable for excessive and obscene CEO packages and brought in a 'one strike and you're out' rule.

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