There’s no reason for bank executives to earn any more than 10 times the average national wage, says a federal Greens MP.
Adam Bandt says the Greens will move amendments to new laws relating to banking executives.
The legislation will introduce the Banking Executive Accountability Regime (BEAR), a scheme aimed at making banks more accountable.
But the Greens want more.
“This bill should include hard caps on how much bank executives at the top are able to pay themselves,” Mr Bandt said on Monday.
“There is no reason that the base salary should be many more than 10 times the average wage. That would start to make Australia a more equal place.”
Mr Bandt says bank executives earn up to 100 times the national average wage, but the Greens want to see it capped at 10 times.
That would still equate to an $840,000 base salary and an up to $420,000 variable bonus component, he said.
“Surely there comes a point where after you’ve earnt your first million a year, what’s the point – you’re still living a very comfortable life,” he said.
Earlier, Labor MP Brian Mitchell said he expected the legislation in its current form to lead to changes in the way bank executives are paid.
Under the bill 60 per cent of a bank chief executive’s bonus will be held in a reserve account for four years so it can be stripped if they’re found to have failed in their duties.
Mr Mitchell said he wouldn’t be surprised if that meant less generous bonuses for senior executives in exchange for larger base pay and allowances.
“Time will tell,” he said.
Meanwhile Liberal MP Nicolle Flint revealed fears that another layer of regulation on the financial sector would detract from Australia’s global competitiveness and that BEAR went against world’s best practice.
She said the financial sector had faced 24 reviews, reports and inquiries since 2013, was subject to almost 40 regulators at any one time and had faced 16 recent legislation changes.
“The banking executive accountability regime adds yet another layer of regulation to the ever-growing compliance faced by our financial institutions, adding another detractor to our competitiveness relative to those international sectors,” she said.
Ms Flint also spoke out against the banking royal commission, saying while a “bank bashing mentality” might be politically beneficial in the short term it would hurt Australian businesses, shareholders, employees and customers in the long-term.