Senate Economics Legislation Committee [Part 2], , 1:36:06 to 1:43:22
Senator Price questions the Commissioner on his executive team's experience with small business and discusses executive remuneration.
Topics: Public service staffing, Government spending
Speakers: Rob Heferen, Senator Jacinta Nampijinpa Price, Unknown Speaker, Speaker 4
>> Thank you chair. Um just have a quick question. Um >> uh Commissioner Hefren, can you tell me have you ever run a small business?
>> No, I have not.
>> Worked in a small business? How >> What about your executive team? Have any of them ever run a small business? I'm
not aware of the um I I know some have partners who run small businesses, but I'm not aware of
their I only asked because I I found it concerning I suppose that you hadn't realized or understood the that small the small business use of credit card payments as a cash flow tool. Um what is your annual um salary package,
um to be uh I know this is going to fall short but um I'm not entirely familiar with my I mean it's a lot I get paid a lot. I'm very well remunerated. Um uh now we have something the annual report which is not actually a reflection of my salary package. So the remuneration tribunal determines my um salary and condition. So I can take it on not to provide the precise figure, but it is in the or I mean my cash salary I'm pretty sure saying that it's over $800,000 but as the precise number I need to take
>> would it be about 928,980?
>> Uh well sounds like you know what it is
>> just wanted to confirm I suppose.
>> Uh I mean one little trap with that though is that that also takes into account the cash salary plus superanuation. Now given at the you know end of the u my age and long-term public servant that superanuation is probably um in one sense for an annual salary inflated but I don't want to quibble. It's it's a lot. I'm very well remunerated.
>> Okay. Are you aware that nearly 40% of small businesses pay themselves less than $40,000 a year, sometimes nothing at all to stay afloat?
I haven't haven't looked at the data of of salaries for employees of or owners of small business who pay themselves a I mean I could apprise myself of that if
if you would like me to. I suppose um I just want to understand that there is an understanding um of of the significance of the decisions that are made and how they impact obviously cash flow for small businesses and their viability, whether they can stay afloat, whether the owners themselves can actually pay themselves um a wage as well.
>> Oh, I'm certainly aware of the financial difficulties that a range of businesses are in. Um, I mean, I think it's I don't know if you're attempting to make the link because I have a um, uh, you know, by public service standards a very high salary that I don't recognize that others don't have as high a salary. I mean, I do. Uh, I understand that. I understand the pressure that people are and I think it goes to the question of the use of credit cards. Um and certainly in the consultations that we're dealing people who uh work a lot with um people who are struggling uh are concerned about the use of credit cards because if a credit card is used and a payment is missed um then obviously the interest rate in the credit card is quite punitive uh far more so than say so if they come to speak with us and say we can't make a payment um and if people are in generally difficult circumstances we'll inevitably wave the GIC the general interest charge but even if the general interest is imposed that's only imposed the long-term bond rate plus about I think 7 points so about 11%. Uh which of course is you know much lower than the 20% that someone or 25% whichever card system they're in. Uh so the the point I was making before about managing the cash flow as I understand it that the much more as it's put to me the uh a very common arrangement is businesses who are liquid uh use the interest rate period on the credit card to effectively manage their cash flow more effectively. But it's not a question of not being able to make the payment. It's being able to use the credit card because they know when the payment time comes they'll be able to meet it.
>> Absolutely.
>> Yeah. And so that's a that's an issue about you know the constructive use of uh the interest rate period that the credit card offers to manage the cash flow of their business better. And when I'd heard the when we had the discussion about managing cash flow I jumped to the conclusion of people who are in financial difficulty using the credit card and of course that's a very different situation. people in difficulty using a credit card is obviously that's not the optimal time to
come to realize now though that um not being able to use a credit card is going to cause financial difficulty for a number of well small businesses.
>> Certainly they have to um to the extent they couldn't use a credit card and have that interest free period that changes and and I might might make the point that that's not just a small business issue. In fact, we're hearing that loud and clear in our consultations from large business. Many large businesses use their credit card in exactly the
same way. So is it good to make decisions by jumping to conclusions or did you consider perhaps consulting small businesses during that time?
>> Um I wouldn't say jump to conclusions. There was a lot of work done, a lot of analysis done, a lot of thought put into it. So,
>> small businesses spoken to during the
sorry, you might have been in the in the um committee when I spoke before and answered uh Senator uh Senator Blair's Bla's answer and I was quite quite clear um when we went through the process and outline the process in quite some detail so for the benefit for the committee I won't go through it again but we had a series of um points for to the minister to you know to determine the path forward and each point the minister would as Minister Mulino would come say I'd like you to check this I'd like you to check that and so went through that process and as I said to the committee before if we had our time over again knowing then what we know now we would have had uh a more open conversation early with small business and sorry if I could finish please Senator um a more open conversation with business and their representatives essentially to share the problem that we' faced rather than coming with a this is what we're going to do and here's a transition period.
>> I I I suppose you said and when I'd heard um that when we had the the discussion about managing cash flow I jumped to the conclusion of people who are in financial difficulty using the credit card. So jumping to conclusion that's was my reference into
>> I beg and and that's uh forgive me that's probably a loose bit of loose speech on my part so I I apologize for that. Um, I hope you'd appreciate someone in my role. Well, and my stature fairly rarely jumps to anything.