Wage Push Targets Exec Salaries

Date: 05 February 2003

Unions are calling for tax changes to put the brakes on multi-million dollar executive salaries and corporate "golden goodbyes."

In a submission to the Senate Economics Committee, the ACTU is proposing to remove the company tax deductibility for executive remuneration in excess of $1 million.

ACTU Secretary Greg Combet said the changes are needed to stop ordinary taxpayers from subsidising excessive corporate payments and to provide a financial incentive for companies to rein in remuneration packages.

The tax plan comes as unions step up their campaign to increase Australia's legal minimum wage to $12 per hour.

ACTU submissions in the Minimum Wages Case being filed today with the Australian Industrial Relations Commission include evidence that the top CEOs' average income last year leapt from 67 times to 89 times the Federal Minimum Wage in just 12 months.

"The pay increase alone for Australia's top 100 CEOs last year was enough to pay the minimum wage increases of 59,000 low-paid workers," Mr Combet said.

"The Federal Government cannot urge wage restraint for workers earning less than $500 a week, but do nothing about executive incomes of more than $20,000 a week."

Under the ACTU's tax plan, companies could face higher tax bills if they pay over $1 million per year in individual salaries or termination payments. Executives' take home pay is not affected.

"Over time, the new arrangements would be factored into salary and conditions negotiations between companies and their high-paid executives. The effect would be to curb the growth in executive salaries, raise tax revenue or both," Mr Combet said.

The ACTU has also proposed regulations to require the boards of public companies to establish remuneration committees comprised of independent directors and require all options packages to be subject to performance benchmarks, which are disclosed to shareholders.

The Industrial Relations Commission will begin hearing the Minimum Wages Case next month. The ACTU seeks a $24.60 per week increase in award rates for 1.7 million low paid workers.

For further information

Contact:	Jeremy Vermeesch
Union:	ACTU
Phone:	0396635655
Contact Mobile:	0408 513 849
Fax:	03 9663 8220
Email:	jvermeesch@actu.asn.au
WWW:	http://www.actu.asn.au/

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