Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Hansard source

I thank the honourable member for Page for his question. Australia has a very sound system of corporate governance and corporate regulation. Under the Australian Constitution, the Commonwealth has a corporations power, but it is a limited power. As a result of High Court decisions, the Commonwealth has had corporations legislation struck down in the past. In order to rectify that, it has been necessary for the Commonwealth to have a referral from the states so that it has full constitutional power over Corporations Law. That referral, which has been made in the wake of constitutional challenges, was for a limited period and is due to expire on 15 July this year.

The Ministerial Council for Corporations and the Standing Committee of Attorneys-General recommended in July 2004 that the referral be extended for another five years to 2011. The Ministerial Council for Corporations endorsed that decision in November 2004. South Australia and Tasmania have taken the necessary steps to extend that referral. Western Australia, Queensland, New South Wales and Victoria have not yet done anything. I make it clear that, if this referral is not given to the Commonwealth before July 2006, Australia’s system of Corporations Law will, in significant respects, be unconstitutional and there will be no certainty in the administration of companies in this country.

I hope the reason why the referrals have not been given is that the states have not yet got around to it and that they intend to do so before July 2006. I was concerned, however, that the Premier of the member for Lilley’s own state has suggested that the states may not be giving that referral of the Corporations Law because they believe that, by refusing to give that referral, they will undermine the government’s industrial relations legislation.

It is known that the states want to take a constitutional challenge to the industrial relations legislation. It is known that that legislation is based on the corporations power. But if the states decide, as a technique in trying to undermine that industrial relations legislation, that they will not extend the referral to the Commonwealth, the whole system of Corporations Law in Australia will be under threat. As a consequence—and I cannot put this any more strongly—Australia’s economic position will be under threat. This is not a plaything. The Corporations Law governs every company in Australia. If that law is at risk of being declared unconstitutional, then the effect on the Australian economy would be very severe.

There are now, unfortunately, only three months to go before those referrals can be effected. I call on each and every one of the states to immediately take the steps that are necessary. We cannot afford to have the Corporations Law at risk for one day in relation to its importance here in Australia and the economic effects such uncertainty would have.

See this speech in context