Subjects: Corporate governance.
E&OE...........
KOHLER:
Prime Minister, President Bush has recently signed a corporate reform bill into law in the US, designed to raise the standards of corporate behaviour. Is your Government looking to follow suit?
PRIME MINISTER:
Well I think you';ve got to bear in mind Alan that many of the things that were in President Bush';s bill represented catch-up with what already exists in Australia. We';ll examine what the Americans have done but you never slavishly follow what happens in America just for the sake thereof. Some of the standards applied in Australia have been consistently higher. For example, the separation of the roles of chairman and managing director. One of the things that the Bush bill apparently does do is to oblige immediate and continuous disclosure, something that has been necessary under the ASX rules in Australia for some time. So where there is new ground that can be worthwhile being followed, broken by the American legislation, then we';ll do so. Otherwise we don';t automatically follow something that has no particular application to our country.
KOHLER:
One of the things that President Bush has said is that auditors should be independent and they shouldn';t in particular do no other work, consulting work for the companies concerned. That';s been an issue in Australia. Do you agree with that?
PRIME MINISTER:
Well I understand the reason for that. The Ramsey Report made a number of recommendations regarding auditors and we';re putting out a discussion paper later this month and then developing legislation based on responses. And I think what will come out of that process will draw a great deal of support in this country.
KOHLER:
But in general, do you think that we could do with more corporate regulation, or not?
PRIME MINISTER:
I';m not convinced of the need for a whole lot more regulation. I think there are probably a number of areas where changes can be made, but some of the problems in America are peculiar to that country. That';s not to say we are perfect. We have people who have been engaged in excesses. They have been getting away with murder. And some of them have been punished under the existing law and others may well be. And one of the other things that I want to do is to wait until we get the results of several inquiries, including the HIH Royal Commission, which are now underway.
KOHLER:
Speaking of the HIH Royal Commission, how do you feel when you read reports of the evidence being given there? How do you feel? How do you think Australians feel when they read that?
PRIME MINISTER:
Alan, I don';t think given my position, I should make a comment. I don';t want to say anything or react in any way that might possibly prejudice any proceedings that might later be taken.
KOHLER:
In a general sense…
PRIME MINISTER:
No I';m not going to bounce off what has been before the HIH Royal Commission. But in a very general sense, I can say to your listeners that the public is fed up to the back teeth of people who effectively destroy the asset value of companies and the share value of companies and then walk away with large bonuses in their pockets. I find that that angers people more than any other single example of corporate excess. People don';t mind somebody being very well paid if they';ve done a good job, and I';m pleased about that because we need competent company directors and managing directors doing a good job and providing shareholders with good value. But where people haven';t done so and then walk away with a fortune, everybody has got a right to be angry. I am and I think everybody else gets very angry at that.
KOHLER:
Well just as an extension of that, do you think that there';s a case for the sort of transparency and scrutiny that applies to Government, that applies to you and to politicians, in companies? I mean in particular parliamentary and public service salaries have been known for years. They';ve only just become known in companies.
PRIME MINISTER:
I think all of those things… I think there';s a case for greater transparency. I think transparency is a very good thing and I like things to be made as transparent as possible when you are effectively dealing with public money. But also though I don';t want to generate an envy community, where people who deserve high remuneration because of the contribution they make to wealth generation are robbed of the incentive to go on making that contribution. As in all of these things, one has got to strike a balance.
KOHLER:
I think you';ve been sort of saying, or holding up the prospect of further regulation. Are you in fact warning the corporate community in Australia that if things don';t improve, that you will pass laws?
PRIME MINISTER:
Well Alan there is an element of that in it, yes. I';m saying to corporate Australia, where there are excesses, stop them. Where you can impose self-regulation, if you don';t, then Governments in the name of public anger will do so. But I';m also saying to the 95% plus of men and women in corporate Australia who are honest and ethical, we';re not going to overload you with unnecessary additional regulation.
KOHLER:
Prime Minister, thank you.
PRIME MINISTER:
Pleasure.
[ends]