Don’t complain if you don’t vote

08/10/2009 - 00:00


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Compulsory voting raises the hackles of many people but could there be merit in extending the concept to local councils and companies?

LOCAL council elections are coming up later this month, but most people in Western Australia wouldn't know anything about them.

History tells us that only a very small portion of eligible voters bother to vote at council ballots.

The proportion is likely to be even lower than normal at these elections, because in most cases the mayor of each council is not up for re-election.

An exception is Fremantle, where the retirement of Peter Tagliaferri, combined with the recent election of the Greens' Adele Carles to state parliament, has heightened interest in the local poll.

The Fremantle Chamber of Commerce is energetically working to get local businesses focused on the poll, to ensure the successful candidate truly reflects the wishes of a large sample of eligible voters.

The chamber, like most informed people, recognises that local councils - the so-called third tier of government after the federal and state governments - can have a big influence on residents and businesses.

Anybody undertaking a land development, a new building or even renovating an existing building knows that gaining approvals in a timely manner can be fraught.

The regulatory issues handled by local councils may not be as big as the policy issues dealt with at a state or federal level, but they are still significant.

The relevance of local councils will be diminished somewhat by the state government's proposed planning overhaul, which includes the creation of expert panels to assess and decide on larger building proposals.

Nonetheless, local councils will retain control over many development proposals and numerous smaller regulatory issues.

And based on past experience, it is likely that the candidates who get elected this month will be those who appeal to the small minority of residents and activists who make a big noise about local issues.

The wishes of the majority will not be reflected in the election outcome, because that majority will stay silent.

Company shareholders are another group that historically stays mute.

Despite that, the Productivity Commission last week issued a report that proposed giving shareholders a bigger say over executive remuneration.

The commission's report was, for the most part, a valuable contribution to the debate over executive pay.

It does not believe there is a general failure in pay setting across Australia's 2000 listed companies.

The report instead highlighted some notable trends, including the fact that very large incomes are generally limited to a small group of companies.

The chief executives of Australia's top 20 companies earn on average more than $10 million a year, which is 150 times average weekly earnings, while chief executives at the smallest 500 companies average around $180,000.

The top 20 includes the likes of Wesfarmers' chief Richard Goyder and Woodside's Don Voelte; they are well paid but they don't attract criticism because they are doing a good job for their shareholders.

The commission rejected some of the sillier ideas, like putting some sort of arbitrary cap on executive salaries. This would be unworkable, and more importantly is not desirable.

It correctly identified big payouts to failed chief executives as one of the biggest problems.

The commission's most interesting reform proposal was to give shareholders more say.

Shareholders are already able to vote on each company's remuneration report. In many cases, this vote has sent a strong signal to directors that their shareholders are not happy.

However the vote is not binding on the board of directors.

The commission has proposed that boards must face re-election if shareholders' concerns on consecutive remuneration reports are ignored. It has dubbed this a 'two strikes' rule.

Like any form of voting, the objective is to ensure that the outcome accurately reflects the wishes of the majority.

Maximising participation in polls does not guarantee this objective will be met, but it's an important step.

That is why many people favour the system of compulsory voting that Australia employs at state and federal polls.

The integrity of the polls is enhanced by broad participation.

It may not be realistic or legally possible to extend this policy to local councils and listed companies but it's a concept that deserves debate.


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