Show us the money

The need for transparency about politicians’ pay and assets is long established and continues to grow. But there is a similar need to reveal the pay packets of powerful people in business.

So the new code put out by the New Zealand Stock Exchange (NZX) requiring companies to disclose their chief executive’s salary package is welcome. It is also good to see the call by the International Monetary Fund (IMF) for New Zealand to require detailed disclosure of the pay packets of top banking staff.

The requirement for more information is based on the general right of the public to know and of investors to know specifically where their money is going. Right now, that information is limited. Companies only have to report the number of employees who earn more than $100,000 and how many people earn in salary bands above that sum. And the salaries of the chief executives of New Zealand’s biggest banks are known only because the figures are disclosed in the annual report of the banks’ Australian owners.

This won’t do, and the Reserve Bank’s rejection of the IMF approach is stuffy and typical of the bank’s lack of transparency and openness. The bank seems to believe that the requirement to disclose details of top bankers’ pay is not ‘‘material’’ for New Zealand banks ‘‘nor particularly meritorious’’.

This is nonsense. People who have money in the banks or invest with them are entitled to know what the top staff are paid. Often, in fact, their salaries are enormous and do not obviously reflect their actual usefulness. Instead, they are just part of a pernicious and decades-long ideological fashion of overpaying the already rich and powerful.

The bank needs to throw off its backward-looking ways and become modern and transparent. A good time to start would be when the present governor, Graeme Wheeler – a man with no clear sympathy for transparency – finally leaves in September.

The New Zealand Shareholders Association, by contrast, has welcomed the NZX code requiring openness about executive salaries.

Shareholders, after all, have a vital interest in the people who make decisions about their investments. They are entitled to know what they’re paid: it’s part of being accountable.

It is ironic, given these two important moves towards transparency, that a lapse in parliamentary openness has just been revealed. Neither former prime minister John Key, nor former Opposition leader David Cunliffe are included in the annual list of MPs’ assets.

This is not because the two retired politicians declined to fill out a return, it seems, but because the man who administers the list – former senior official Maarten Weavers – is taking literally the requirement that to be included in the list they must be MPs when it is published.

This is a stuffy and pedantic interpretation of the rules and it flies in the face of public accountability. It goes against the whole spirit of the registry.

In fact, of course, the registry is woefully vague and inadequate, even for those MPs listed. It gives maddeningly little detail on the size of the politicians’ assets. That too needs to change.

The salaries of top business people should be made public.