Time to stop the rorts.
This speech focuses on reforming Capital markets and the policies PeopleFirst are implementing to do that.
These are:
1) Make Superannuation voluntary
2) Make Superannuation Boards hold annual AGMs so members can vote for the board members
3) Prevent Superannuation Funds from voting in company AGMs unless they get direct proxies from their members.
4) Use just one stock exchange.
5) Ban shorting.
6) Abolish payroll tax and fund it with a 1.5% turnover tax on shares and unhedged derivatives.
It goes without saying we cannot have unelected yes men and women controlling $3 trillion in capital. When you control that kind of money you control Industry.
It beggars belief how weak the Liberal party has been on the issue of corporate governance around Superannuation, especially given the Unions control it. But that’s the Liberal Party for you – weak and insipid.
The last point is very important. It is estimated around half of the shares traded on the ASX is by foreign owned high frequency traders that use automated algorithms. These HFTs scalp the market and manipulate share prices up and down using huge volumes. They often do this on behalf of large fund managers to manipulate the price lower so they can buy cheaply. It’s collusion and it stifles true price discovery.
The funds raised assuming a drop of 30% in turnover on the ASX could fund the abolition of Payroll tax. This is productivity destroying tax that is compliance heavy.
While an agreement with the States would have to be made provided they were all better off you could make it happen.
It is crazy to reward speculators gambling but not employers who are producing.
The existing Government policy is only destroying productivity.
Senate on 10/10/2024
ADJOURNMENT – Economy
Senator RENNICK (Queensland) (17:48): This morning I was pleased to release the People First policies in regard to capital markets. Earlier this week I also spoke about policies in regard to monetary policy. But I must say that it’s interesting to note, after five years in this place, the lack of policy discussion by the major parties when it comes to serious economic reform in this country. Granted, the Labor Party did make a slight amendment to income tax cuts this year—income tax cuts that were first introduced under the Morrison government in 2019. But the geniuses in that government decided to wait five years before they’d actually introduce them. A great way to lose an election is to introduce income tax cuts five years down the track. Generally, the way you’d do it is put out some income tax cuts every year so that people feel like they’re avoiding bracket creep.
Apart from that, the only other two discussions we’ve had this year are the debate over building 6,000 new houses in the next five years—that’s hardly going to put a dent in helping to house the 600,000 immigrants that are coming into this country every year—and a discussion of how many boards we’re going to have on the RBA. That discussion is like shuffling deckchairs on the Titanic. Who cares how many boards the RBA has? What we need to be discussing is serious structural economic reform in this country. I am pleased to say that the People First Party will discuss it. This is the reason why I quit the LNP. I wanted to spend the last eight months of my term actually discussing real policy for a change rather than carrying on with the clown show in this chamber where you argue, shout and scream over rats and mice. We need to deal with serious structural reform in this chamber.
In the first place, we have to start with superannuation, because governance of superannuation funds is appalling. It is a complete and a disgrace that in what is considered to be a democratic country we do not allow superannuation fund members to vote for their boards. Those boards then go on and vote in company AGMs. The big ASX 200 but all companies listed on the ASX control the bulk of Australia’s economy. If we are going to live in a democratic society, we have to reward the capitalists. We call ourselves a capitalist society and, while I don’t believe in free markets for the same reason I don’t believe in fairies at the bottom of the rose garden—they don’t exist—I do believe in fair markets, I believe in the risk-reward paradigm and I believe in rewarding capitalists. They are the people who have money in superannuation funds. They are—believe it or not—the workers. There is a false dichotomy between capitalism and the worker. It’s the worker who gets out of bed and puts their nose to the grindstone, whether they are a carpenter or labourer using their hands, because that’s what their capital is, or a teacher or nurse using their heart and passion or a scientist or an engineer. These people are all capitalists and they all pay their superannuation. They should be allowed to vote on how their capital is allocated. That is one of the policies the People First Party is advocating.
The next step in that is that superannuation funds cannot vote at company AGMs unless they have received direct proxies from their members. They have no right to assume what the member wants unless they have direct instructions. Our industry is now being driven by ideology and not productivity. If we want to turn this country around, we need to be attracting people who are looking at balance sheets, looking at profit-and-loss statements, understand cost management and understand entrepreneurship, not sitting round a boardroom discussing woke ideas and doing a ‘welcome to country’ at every meeting. It’s not good enough.
The other thing that we also need to look at doing is changing the way the energy markets are being priced. They are currently being priced in five- to 30-minute blocks. This is creating an enormous opportunity for arbitrage on the energy markets. That means that people are making a riskless profit. That’s often where the speculators come in to play. We need to tackle speculation in this country. It’s out of control on the ASX, because Howard got rid of stamp duty. Well, it wasn’t him, but he should have leaned on that when he brought in the GST. The state premiers got rid of stamp duty on marketable securities and not payroll tax. We need to get serious about productivity in this country, and speculators are a parasite on the capital market. We need to destroy speculators stone-cold dead as well. We need to stop speculating on energy markets, because it is driving up energy costs and it’s making it harder for this country to be productive.
