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

I thank the honourable member for Hughes for her question. I can inform her that the corporate regulator, the Australian Securities and Investments Commission, continues to take successful action against corporate wrongdoers. Last week ASIC banned two Melbourne directors who were associated with an unregistered managed investments scheme from providing financial services. This followed a successful action last year where the Federal Court made orders regarding the companies, prevented the companies from operating their scheme and permitted the assets of the scheme to be returned to investors. The action by ASIC ensured that $2.8 million was returned to 26 investors—that is, a repayment of all moneys.

Last year ASIC secured convictions against 27 people, with jail terms of 97 years; 58 company officers were banned; 12 auditors and liquidators were disciplined or deregistered; 60 companies were wound up; and, 215 criminal civil and administrative proceedings were undertaken. The success of Australia’s national corporate regulation depends on a referral of power from state governments. The Commonwealth does not have unqualified power over corporations. The High Court has found that on a number of occasions, and this system can be maintained only if the states refer their residual power over corporations to the Commonwealth government.

Mr Speaker, you will recall that on two occasions I have raised the matter in the House that the current referrals are due to expire on 15 July, and I am pleased to report that many of the states have now extended that referral. However, the date for the referral, 15 July, is less than four weeks away. If we do not receive the remaining referrals, Australia’s system of corporate regulation will collapse. I regret to inform the House that one government has still not got around to referring this power, and that is the New South Wales government. Again, the New South Wales government has not been able to refer to the Commonwealth its corporations power, which underpins all of the Corporations Law. This is not a matter to be played around with. Recently in the Australian Financial Review, Professor Ian Ramsay was quoted as saying:

It’s hard to imagine this delay is simply due to tardiness ... I suspect it reflects brinkmanship ...

It is brinkmanship coming out of the New South Wales government—the factional controllers of the Leader of the Opposition—in relation to Corporations Law. We had the Investment and Financial Services Association, IFSA, putting out a press release yesterday calling on the states to extend the referral power and saying we are risking:

... the regulatory framework and governance underpinning around $1 trillion worth of Australian savings and investments.

I call on the Leader of the Opposition to get in touch with the New South Wales government as a matter of urgency and to instruct his union backers and factional allies to give the referral to the Commonwealth—a referral which underpins the whole system of corporate regulation in this country, a referral which is necessary to $1 trillion of investments which are held by average Australians—rather than play brinkmanship.

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