Corporate welfare should come with strings

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Businesses receiving government corporate welfare should be required to follow industrial relations and OHS laws, and should put caps on executive and board payouts.

There is a clear national interest. Governments (state and Federal) gives tax concessions and other support to many different kinds of business, in order to create jobs and ensure economic growth. Business – the executives and board members – often see this as a green light to line their own pockets.

If a company wants money, it should give Australia a commitment to maximise local jobs, a commitment to respect IR laws – by not exploiting workers or refusing their rights – and make a commitment about curbing excessive executive salaries.

Too often the profit driven nature of extreme capitalism comes at the expense of a company’s workforce. Minimum wage is used to exploit vulnerable workers. In times of economic downturn, it is the workforce who suffer – not executives.

Amazingly, business is still lobbying for minimum wages and the Award safety net to be weakened:

“Paying more to employ people simply because regulations are being consolidated is unacceptable,” Mr Anderson said.

A case in point is the Pacific Brands – who recently announced the relocation of manufacturing of iconic Australian brands overseas. Over 1800 workers lost their jobs as a result of this decision. The CEO, other executives, and the board all received large pay rises in the 12 months leading up to the announcement.

The TCF industry has already lost tens of thousands of jobs due to the lack of any industry policy under the Howard Government. Pacific Brands was in receipt of government support.

Future government corporate welfare should come with contractual oblibations on the part of the companies.

UPDATE:

Rudd wants the money back:

“I think what Pacific Brands has done is, frankly, in so many respects, beyond the pale,” Mr Rudd said on Fairfax Radio Network.

“In terms of the money they have got from the government, we will go through all of that in terms of what can be extracted back from them.”

According to Michele O’Neil, national secretary of the TCFU, Pacific Brands had accepted $17 million from the federal government over the past two years.

Pacific Brands is also trying to avoid a public boycott through blackmail – saying that any boycott would put the remaining jobs at risk.

UPDATE II:

Pacific Brands have announced they are seeking $7 million in public funding:

The application seeks to have taxpayers reimburse the company’s investment for research and development under the industry’s Strategic Investment Program Scheme.

Under the scheme, companies are entitled to a proportion of what they invested in the previous financial year.

Pacific Brands has already received $14.5m from the two previous years.

“Yes, we have an application for funding,” a company spokesman said.

“It’s for money spent on Australian-based research and development.”

A spokeswoman for Industry Minister Kim Carr, said the grants process was “not a process the Government controls” and was “done at arm’s length”.

The spokeswoman said the only way the Government could claw back funding from Pacific Brands was if the company moved any factories or equipment offshore before 2015.

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