{"id":15116,"date":"2014-02-25T07:00:16","date_gmt":"2014-02-24T20:00:16","guid":{"rendered":"http:\/\/nofibs.com.au\/?p=15116"},"modified":"2019-04-14T00:01:26","modified_gmt":"2019-04-13T14:01:26","slug":"need-talk-corporate-political-entitlements","status":"publish","type":"post","link":"https:\/\/archive.nofibs.com.au\/need-talk-corporate-political-entitlements\/","title":{"rendered":"We need to talk about: corporate and political entitlements"},"content":{"rendered":"

\"ENTITLEMENT\"<\/a>By Anon<\/p>\n

25th February 2014<\/p>\n

Our new government says the age of entitlement is over, so lets look at why that\u2019s a good idea.<\/p>\n

If you export a product Austrade gives you grants<\/a> for \u2018promotional activities\u2019 up to $150,000 a year, for eight years. The Export Grant Scheme is worth $150 million per year and runs until 2016.<\/p>\n

The Australian Institute of Export<\/a> says it allows business to commit to: \u201cExtra advertising, create new marketing materials, engage marketing consultants, undertake more trips to prospective markets, and set up promotional offices overseas”.<\/p>\n

On a “marketing visit” you get $300 a day for accommodation, entertainment and living expenses, oh, and a 65 per cent discount on first class airfares. That\u2019s $8277 back <\/a>on a flight from Sydney to New York.<\/p>\n

The Coalition has indicated its support for the Scheme.<\/a> They\u2019ve signaled an increase of $50m to make it a $200m program. Labor introduced an amendment before Parliament <\/a>to close loopholes like paying grants to people assessed \u201cnot to be a fit and proper person”. They also proposed to reduce it to a $125m program, but the Coalition voted against it.<\/p>\n

Warren Truss spoke about the bill last year<\/a>: \u201cLabor does not seem to care about or understand business, and people in business\u2014exporters in this case\u2014simply cannot rely on government programs anymore. How can they know they will actually get a helping hand to break into a new market when the government keeps changing the rules?\u201d<\/p>\n

He went on to say: \u201cAmendments introduced in this bill highlight the government\u2019s mismanagement of its budget, because they are essentially being put in place to save just $25 million”.<\/p>\n

About 2600 businesses (85 per cent of those who applied) will likely get up to $150,000 through the scheme.\u00a0<\/a><\/p>\n

Another entitlement our government wants to expand is the Export Finance and Insurance Corporation (EFIC), which totalled over $513m, \u201cunderpinning exports and overseas contracts\u201d in 2013.<\/p>\n

A third of the board <\/a>at EFIC currently act as directors of mining companies. None of them declared a conflict of interest last year.<\/p>\n

Bruce Brook is currently a director of Newmont Mining Corporation and Boart Longyear, the world’s largest mineral exploration drilling company<\/a>, he was reappointed to the Board as a member and as Chair of the Audit Committee for a second term of three years.<\/p>\n

Annabelle Chaplain is on the board at Downer EDI Ltd<\/a> who, \u201csupport our\u00a0coal and metalliferous mining <\/a>clients at all stages of the mining lifecycle. She\u2019s also on the board at Copper-and-gold miner PanAust Ltd.<\/a><\/p>\n

Jennifer Seabrook, is currently a Special Advisor to Gresham Partners Ltd<\/a> whose biggest asset was a mining company<\/a> and advises mining companies on mergers and acquisitions. She is also a non-executive director of Australian mining company Iluka Resources Ltd<\/a>.<\/p>\n

Luckily the EFIC practices responsible lending<\/a>. \u201cWe have helped eligible companies working on projects such as oil and gas, defence and resources to win and finance contracts”.<\/p>\n

But don\u2019t be fooled, “responsible” can mean many things. The productivity commission review of EFIC in 2011 found<\/a>: \u201cSupport goes to relatively few firms and often on a repeat basis. By value most of the support is targeted to large corporate clients \u2026 more than three quarters of the value of EFIC\u2019s signings in 2010-11″. Just 41 firms received help (out of about 45,000 exporters in 2010-11).<\/p>\n

The productivity commission was unhappy with EFIC\u2019s influence on the environment and the economy. \u201cBecause EFIC is distorting the allocation of resources in the economy, the costs are widespread and include those borne by domestic competitors of EFIC\u2019s clients and, more broadly, the taxpayer. EFIC should be required to release more information relevant to environmental and social impact assessment”.<\/p>\n

The commission also said money EFIC provided to mining companies should be discontinued.<\/p>\n

\u201cEFIC has provided facilities to Santos to develop liquefied natural gas projects in Papua New Guinea and Australia. In a 2011 press release, Santos stated that ECA facilities are a part of Santos\u2019 funding strategy.”<\/p>\n

The commission\u2019s findings were, however, largely ignored, and last year EFIC made its largest ever financing play<\/a>, $150m, for the Ichthys LNG Project in the Browse Basin off Western Australia. The project is owned by foreign companies.<\/p>\n

EFIC gave more to mining companies than anyone else in 2013.<\/p>\n

Anglo Coal Australia got $40m and Xstrata Coal $39.5m for Coking Coal mining loans which EFIC said have: \u201cPotential environmental impact<\/a>“.<\/p>\n

At Senate estimates <\/a>late last year: \u201cEFIC did not disclose the dollar value of its loan to miner Rio Tinto for its $US5.1 billion Oyu Tolgoi mine in Mongolia. But it did confirm it was seeking a cash injection from taxpayers”.<\/p>\n

Remember Tony Abbott rejected a cash injection at SPC citing workers entitlements are excessive (at just $116,427 in 2013).\u00a0 Abbott claimed expenses entitlements for six months in 2013 of $474,707.15.<\/p>\n

Now Abbott is restoring corporate entitlements<\/a> because business needs “relief”.<\/p>\n

But relief from what?<\/p>\n

Recent analysis showed CEOs are paid 150 to 250 times average <\/a>earnings and that\u2019s after their pay tripled between 1993 and 2009.<\/p>\n

An average CEO of a top 300 ASX listed company gets more than $51,000 per week.<\/p>\n

The media might help explain this. Australian Financial Review<\/em><\/a>\u00a0reported recently: \u201cThe end of a period of exorbitant salaries and big bonuses”.<\/p>\n

This \u2018end\u2019 of stuff like this graph<\/a> perhaps.<\/p>\n

But since 2003 our executives remain some of the highest paid because bonuses are calculated in a strange way, more on that later.
\n<\/a><\/p>\n

Maurice Newman, the PM’s Business head, says wages are the issue<\/a> \u2013 but he is not talking about the ones above.<\/p>\n

Newman\u2019s former employer, Deutsche Bank, moved to cap executive pay<\/a> in 2013, \u201cat just below \u20ac10 million ($13.2 million) because of \u201cbroader political debate\u201d in Europe about reining in executive compensation.<\/p>\n

Llyods CEO Ant\u00f3nio Horta-Os\u00f3rio, was forced to defend his decision<\/a> to accept a bonus after, wait for it \u2026\u201cunion leaders called on him to follow rivals at Royal Bank of Scotland and Barclays and waive his payout”.<\/p>\n

In Australia, where fixed pay for CEOs has ‘fallen’ for the second time in more than ten years, cash bonuses have soared<\/a>. “You are much more likely to get a bonus than you were 10 years ago, and that bonus is much, much bigger,” Martin Lawrence of Ownership Matters said.<\/p>\n

The gap between reported pay and real pay is staggering.<\/p><\/blockquote>\n

Mark Clark, head of Regis Resources, disclosed a salary of just $541,000, but he took home $16.46m.<\/p>\n

ANZ boss Mike Smith was paid $9.67m, officially, but he took home $19.1m when the extras were calculated.<\/p>\n

The commentary about these numbers is puzzling, as Fairfax reported<\/a>: \u201cAnn Byrne said the decline in fixed pay – which does not include bonuses or shares in the company – was a result of a higher level of investor scrutiny since the global financial crisis and the introduction of the two-strikes rule on remuneration \u2026”<\/p>\n

The market is responding to shareholder concerns over continual pay increases,” she said, adding the trend was likely to continue downwards as investors and the community continued to put pressure on company directors.<\/p>\n

What community pressure in Australia?<\/p>\n

Consider the two Westfield shopping centre moguls who took home over $21m. Peter Lowy, who was \u2018entitled\u2019 to a pay rise of 43 per cent to $11.5m. He\u2019s also fighting \u2018entitlement\u2019 claims<\/a> from their cleaners, who want \u2018fair wages\u2019.<\/p>\n

Westfield\u2019s greed in America is legendary. \u201cOver the years the company has reaped hundreds of millions of dollars in favourable tax assessments, a recent study<\/a>\u00a0documents: “Los Angeles City Council granted Westfield a special tax break of up to $59 million on a new mall in Woodland Hills it probably would have built anyway. Westfield’s position is that it receives nothing it’s not legally entitled<\/a> to”.<\/p>\n

In America as in Australia the culture of \u201cEntitlement for the rich<\/a> mean cuts in safety net programs for children, women, retirees, and low-income families. They threaten Social Security. They redirect money from infrastructure repair, education, and job creation”.<\/p>\n

Last week\u2019s news that News Corp is legally \u2018entitled\u2019 to claim over $880m in tax concessions, for reasons no one can really explain is instructive:<\/p>\n

\u201cThe Full Court concluded that no actual exchange of currency is required<\/a> in order to realise a ‘currency exchange loss’.\u201d<\/p>\n

So we have a \u2018responsible\u2019 government allowing companies to claim grants for first class airfares and CEOs earning more than ever but the debate is about reducing pay rates for low income workers?<\/p>\n

An end to the age of entitlement is coming but that\u2019s not what we\u2019re talking about in Australia.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Anon 25th February 2014 Our new government says the age of entitlement is over, so lets look at why that\u2019s a good idea. If you export a product Austrade gives you grants for \u2018promotional activities\u2019 up to $150,000 a year, for eight years. The Export Grant Scheme is worth $150 million per year and […]<\/p>\n","protected":false},"author":7,"featured_media":15118,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[3434,585,1637],"tags":[1634,1635,1448,848],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/archive.nofibs.com.au\/wp-content\/uploads\/2014\/02\/ENTITLEMENT.jpg?fit=799%2C400&ssl=1","jetpack_shortlink":"https:\/\/wp.me\/p3t0mw-3VO","jetpack_likes_enabled":false,"jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/archive.nofibs.com.au\/wp-json\/wp\/v2\/posts\/15116"}],"collection":[{"href":"https:\/\/archive.nofibs.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/archive.nofibs.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/archive.nofibs.com.au\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/archive.nofibs.com.au\/wp-json\/wp\/v2\/comments?post=15116"}],"version-history":[{"count":0,"href":"https:\/\/archive.nofibs.com.au\/wp-json\/wp\/v2\/posts\/15116\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/archive.nofibs.com.au\/wp-json\/wp\/v2\/media\/15118"}],"wp:attachment":[{"href":"https:\/\/archive.nofibs.com.au\/wp-json\/wp\/v2\/media?parent=15116"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/archive.nofibs.com.au\/wp-json\/wp\/v2\/categories?post=15116"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/archive.nofibs.com.au\/wp-json\/wp\/v2\/tags?post=15116"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}