G20 moves must suit economy: opposition

The federal government's ability to push through key decisions of the Group of 20
leaders summit may be thwarted by coalition resistance to capping corporate salaries
and imposing tougher capital requirements on banks.
The opposition has signalled a reluctance to back both measures, urging the
government to be careful about adopting policy that does not suit Australia's
relatively strong economy.
The G20 leaders committed their governments to imposing stricter risk-taking rules
for financial institutions and stronger governance that aligned the pay packets of
company bosses with long-term performance.
Acting opposition leader Julie Bishop says the government should ensure its response
was tailor-made for the local economy.
"What we have to be careful about is that we just don't adopt whatever the G20
determines is right for the global economy," she told Sky News on Sunday.
Opposition treasury spokesman Joe Hockey warned there could be adverse consequences
if banks were required to hold additional capital.
"Already you are seeing the Australian banks run a very tight line with small
business (lending)," he told ABC television.
The opposition is also reluctant to back any government-imposed cap on executive
salaries, saying the issue should be left to shareholders.
"I don't think there's a role for government," Ms Bishop said, adding the coalition
was prepared to consider the recommendations of a Productivity Commission inquiry
into director and executive remuneration.
The commission is scheduled to hand down a draft report on Wednesday.
Mr Hockey says companies will find ways around any new rules on salaries.
"I'm prepared to bet ... that bankers are still going to get massive remuneration
packages over the next few years," he told the ABC.
"They'll simply restructure it to fit in with global changes."
The government could morally pressure companies to reduce executive salaries and
termination payments, but at the end of the day it was a matter for shareholders.
"It's their money, it's not taxpayer money," he said, adding that people who worked
hard and engaged in enterprise deserved to be rewarded.
Shareholders should be the ones to speak up about "ludicrous" payments to chief
executives, Mr Hockey said.
Treasurer Wayne Swan, on his way home from the G20 summit, said Australia was
leading the way on capping executive pay, with some of the toughest legislation in
the world before parliament at present.
Draft laws will require shareholder approval before a company executive can receive
a termination payout of more than one year's base salary.
"We need to have action in this area. The public ... are just sick and tired of some
of these obscene packages," Mr Swan told the Ten Network.
The opposition also wants the government to establish a securitisation market that
would provide alternative funding to smaller financial institutions.
"My concern at the moment is that there is a lack of competition between the major
banks and other financial institutions," Mr Hockey said.