Howard And Costello Forgetful

Bob McMullan - Shadow Treasurer

Media Statement - 21 March 2002

John Howard and Peter Costello seem to have forgotten their promise more than nine months ago to introduce laws allowing receivers to claw back performance bonuses paid to executives when a company is insolvent or trading at a loss.

Evidence to the Federal Court this week highlighted the reluctance of One.Tel directors to repay their $14.6 million in bonuses, in spite of encouragement from fellow director James Packer. When Mr Packer demanded Jodee Rich pay back the bonus, even though the company was running at a loss, Mr Rich replied: "I don't think I will".

Nine months ago the prime minister promised to prevent bonuses being paid in future when a company was trading at a loss or insolvent.

"… the Commonwealth intends to amend the law so that in future, where bonuses are paid in the circumstances where those bonuses were paid to the bosses of One.Tel, that money will be refundable and can be used to meet the lawful and legitimate entitlements of the workers and also the other creditors of the company. Once again, this is an example of the determination of this government, whilst being a great supporter of the capitalist system, to prevent a recurrence of this type of thing in the future." [John Howard in response to a question from Kim Beazley, Hansard 4 June 2001]

But still there is no sign of the legislation. This is another case of the government's inaction being much louder than its words. Mr Howard and Mr Costello should say whether they intend to proceed with the legislation. Or has Mr Costello told Mr Howard: "I don't think I will"?