Federation Chamber, Private Members Business
Watch Matt's speech here
Mr KEOGH (Burt) (11:59): I'm very proud to rise today to speak in support of this motion on CEO remuneration. This motion fundamentally goes to the issue of inequality. The Australian people need to understand, when we discuss the concept of inequality and the growing inequality that we are seeing across the Australian community, that the government hasn't even shown up to debate it. The government has abandoned the field when it comes to addressing issues of inequality in this country. You don't need to hear me say that to understand it. If we look at what is happening in Australia now with the rising levels of inequality, it is writ large when we look at the growing disparity between the remuneration of Australian workers and the remuneration of those who run some of the biggest companies in this country.
Average total pay of ASX 100 CEOs last year rose nine per cent. Australian workers would cry to get anywhere near those sorts of wage rises. In fact, that nine per cent was four times higher than the growth in average wages that we have seen in Australia. The median pay for a CEO of an ASX 100 listed business is more than $4 million. But, remember, that's just the median. We've got examples across the Australian corporate landscape that are far higher. The CEO of Domino's, who of course employ some of Australia's lowest paid workers, made $37 million last year. The former CEO of the Commonwealth Bank earned $12 million. That $12 million for the CEO of one of Australia's biggest companies, Australia's biggest bank, made the remuneration of the other CEOs pale into insignificance. There was not even, truly, a market justification for paying a bank CEO $12 million, let alone a consideration of all the misconduct and the destruction of people's lives that have happened at the hands of Australian banks.
The $4 million median salary for ASX 100 CEOs is 75 times the average pay of a full-time worker in those companies. It would take someone two full careers to get close to earning what a CEO earns in a single year. It wasn't always thus. We only have to go back to the 1970s to see that the CEOs of our then-largest companies—companies like BHP—were being paid only six to seven times more than the average for their workforce. This motion is not about cutting wages. All this motion is about is calling on the government to ensure that we have transparency in reporting on the inequality that we are seeing in Australian workplaces, making it clear just how highly, in comparison to their own workers, CEOs are being paid. That is something of which we should take note. We don't need to cut company profits. We don't need to cut dividends to the shareholders and the investors in those companies. But what companies need to think about and what their shareholders should be made very well aware of is just how much of their profit, their revenue—which is used to pay for their workers, their management teams, their consultants and everything else—is going to one individual at the top of the chain, as opposed to the many, many workers that those companies employ.
The crux of it is this: if we want to see real economic growth in this country, ordinary Australians need to have money in their pockets to spend. I wouldn't even know how to spend $12 million of annual salary, but I would certainly not be spending it through the economy if I were earning it. It would end up in other investment vehicles. But, if that money goes into the pockets of ordinary working Australians, it will be spent. That will see real economic growth occur and it will start to see this growing inequality addressed. It will mean that we become a more equal place to live, because we will close that ratio as people become more and more aware of just how much of this money is going into the pockets of CEOs and not into the pockets of ordinary working Australians.