The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Peter Costello

Peter Costello

Treasurer

11 March 1996 - 3 December 2007

Transcript of 26/09/06

Doorstop Interview
Maitland, NSW

Tuesday, 26 September 2006

12.40 pm

SUBJECTS: Telstra, James Hardie, Life Skills Trade Fair, unemployment, water, local sporting stadium

JOURNALIST:

Treasurer, the Telstra Board announced bonuses overnight and yesterday, what do you make of the decision to give Sol Trujillo $2.6 million in bonuses despite the fact that share values are (inaudible)?

TREASURER:

Well, I think the Board has to make the basis on which the bonuses are paid clear. There should be performance hurdles and the Board should be able to show how those performance hurdles have been met. We have a requirement under Corporations Law than remuneration policy be disclosed to shareholders and it is incumbent upon the Board to do that.

JOURNALIST:

Do you think that the Board should re-think giving Sol Trujillo $2.6 million in (inaudible)?

TREASURER:

Well the way the Board set these things is they have performance hurdles. They set out in advance the levels that one is expected to meet in order to get a bonus and it should be clear what that is, it should be clear how they have been set, it should be clear how they have been met, and it is up to the Board to disclose that to the shareholders and indeed to the market generally.

JOURNALIST:

And will the Government, would the Government consider using its majority shareholding at the AGM to oppose the total remuneration package if it goes to the Telstra executives?

TREASURER:

The shareholders don’t get the chance to vote on individuals’ packages. What we have the, what shareholders have the chance to do is to look at remuneration policies generally, that is for senior executives. These are administered by the Board and we would expect the Board to have in place proper hurdles which they carefully monitor to ensure that bonuses actually produce wealth for the shareholders and the company generally.

JOURNALIST:

And what about James Hardie, which has announced also increased remuneration for its executives?

TREASURER:

Well James Hardie is a company that tried to escape its liabilities in Australia and then it shopped the world for a cheap tax jurisdiction. It hasn’t been able to avoid its liabilities and that is right and proper. Asbestos victims in this country deserve compensation. And it won’t be able to escape its tax liabilities. It will have to comply with Australian tax law. Now, I just wish the Directors of James Hardie were as assiduous in ensuring that they met their liabilities, including their just tax liabilities, as they have been in awarding themselves increases in director’s fees.

JOURNALIST:

So you don’t think they are deserved either?

TREASURER:

Well you know, I would like to see the Directors concentrate on paying the liabilities and meeting their tax obligations and I think if the Directors were able to accomplish both of those things they could be satisfied that they discharged their duties. But until those things have been accomplished I would recommend that the Directors continue to work towards that aim. Thank you.

JOURNALIST:

I am from the local media so I just wanted a comment on the programme today and your visit to Maitland.

TREASURER:

Well I think the programme is fantastic and I want to congratulate everybody who has been part of it, the local council, the local businesses, the students, especially the students, they’ve done a great job, they have created a little community with its own currency. They have shown a great deal of inventiveness in building housing, in building water fountains, in building motor cars, in trading generally and I love the entrepreneurial spirit that I see amongst all of these children and I hope that it contributes to understanding finances and financial literacy generally.

JOURNALIST:

Is it the sort of programme that you would see could be taken up nationwide, because obviously the Government has a big push in this area?

TREASURER:

The Government has a big push to encourage financial literacy. We want to do that because obviously we want children to participate in the economy generally, but also with the adoption of superannuation which we want young people to make their own and to take an interest in, it is important that they understand financial literacy and the programme that I have seen here I would recommend to other schools and other communities around Australia.

JOURNALIST:

Treasurer also one thing that you talked about constantly is record low unemployment rates across Australia under the Coalition Government, are you aware that in the Hunter we have got teenage unemployment of 28 per cent and that a lot of kids these days, it doesn’t look like they have got any kind of a future. What do you say to that?

TREASURER:

Well I think the important thing for young people who are looking for work is to get the best education that they can, and it is not just academic education, I think trade education and one of the things that we are developing up here is a technical education which will prepare them for life and I think with proper education including the opportunity of technical education they will have much better job opportunities. We in fact have a shortage of employees in many trades at the moment in Australia and I would recommend to teenagers in particular to look at a trade education and skills in that area.

JOURNALIST:

Treasurer, also over the last few months you have spent quite a lot of money on funding for NRL and AFL football stadiums, we are still waiting for some funding for Energy Australia Stadium in Newcastle, is that possibly on the cards at all?

TREASURER:

Well when the Government looks at these things it wants to look at the need, it wants to look at contribution from all tiers of government and it wants to look at strategic investment. And we are always open for submissions in relation to that, we are always looking for careful representations from the community and our ears are always open.

JOURNALIST:

Treasurer, just on another national issue, the Government announced today it is setting up an office in relation to water within the Prime Minister’s portfolio. If it is such an important issue, shouldn’t it have ministerial status?

TREASURER:

Well I think the fact that it is within the Prime Minister’s portfolio indicates how seriously the Government does take it and it is actually headed by the Prime Minister himself with his Parliamentary Secretary, Malcolm Turnbull, with a large sum of money with the National Water Initiative of a billion dollars, an extra $500 million in the Budget to the Murray Darling Commission, the Natural Heritage Trust, enormous resources and the Prime Ministerial interest from the top of the Government and I think that indicates how seriously we take it.

JOURNALIST:

But in principle what would you say to the idea, would you welcome Malcolm Fraser as a, Malcolm Turnbull…

TREASURER:

You were back in time there.

JOURNALIST:

…would you welcome Malcolm Turnbull as a ministerial colleague?

TREASURER:

Well, I think he is doing a great job in relation to water and of course in our system of Government people who equip themselves well generally get further responsibilities in the Government and I would welcome any contribution that he has to make.

JOURNALIST:

But not on tax?

TREASURER:

Oh I welcome any contribution that he has to make. Okay, thank you.