Cameron Thompson (Blair, Liberal Party) Share this | Hansard source

I am glad that the member opposite has wound up. He spent a lot of time reviewing the Parliamentary Secretary to the Treasurer’s website and he has been following his press releases very closely, so I am surprised that he was not able to fill the whole time allocated to him. I would have thought he would have made a bigger effort to properly review this legislation, because it is significant legislation. For the member opposite to say that some motherhood statements made by the Leader of the Opposition in his budget reply speech amount to a policy is an absolute farce. It is a joke. I can sit here and say that I am going to reduce red tape, in much the same way as the Leader of the Opposition did. There has never been a government in the existence of time that has not proclaimed that it wanted to reduce red tape. That is about as innovative as us all turning up here today. There is nothing to it. It is a motherhood statement. He trumpets that and says that that is the way to be going ahead while we have these real, legitimate improvements which were won as a result of careful consultation and consideration by the parliamentary secretary and the government. I think that it is important that we consider them and take them seriously and that we do not just spend our time sniggering behind our hands because we do not like the way the parliamentary secretary writes his press releases.

There are a lot of very good things to be considered in the Corporations Legislation Amendment (Simpler Regulatory System) Bill 2007 and related bills and one of the major things that I thought was remarkably—and not surprisingly—glossed over by the member opposite was the issue of employee share ownership schemes. I noticed he said:

Personally, I believe much more needs to be done on employee share ownership schemes.

I do not know whether that is going to be Labor Party policy. I do not know whether Dean Mighell and those sorts of people would endorse the idea of employee share ownership schemes. Do you think they would? The Australian Bureau of Statistics reports that in 2006 the number of employees that received shares as part of an employee entitlement had increased from 404,300 in 1999 to 501,100. It is something that is popular among employees, and there are an increasing number of AWAs that facilitate this kind of sharing in a firm’s profitability for employees and encouraging that kind of outcome. That is part of the flexibility that you get through the new industrial relations system that the government has introduced. The opposition just cannot get their heads around that.

I can hear the member for Prospect saying, ‘Yes, personally I support an increase in employee share ownership schemes,’ but do honourable members really think we would ever get that from the puppet representative of the ACTU, as Prime Minister of Australia? I doubt it. That would go to the very bottom of the bottom drawer and would not be seen again, despite the innovative and motivational impact that employee share ownership has on people. It makes them want to increase their productivity and the profitability of the companies in which they work. Companies which increase their competitiveness enhance the outcomes not only for them but also for their employees and the people of Australia. The member for Prospect would have us believe that reducing red tape is simple. Apparently, the Leader of the Opposition just does a press release and—voila!—he has fixed red tape. Isn’t that amazing? He can fix it. He does a press release and—bing!—it has happened. What a sad reflection on the member for Prospect’s understanding of just how difficult it is to get sensible, focused reform.

We are engaging here in a careful balancing act. On the one hand, there is the need to effectively protect shareholders and others in the community who rely on this industry. The managed funds investment industry has $1.1 trillion in consolidated assets. We want to provide people with protection, so they can trust the industry in that what they are getting is a very carefully managed and controlled investment. On the other hand, we want to facilitate that investment, to make it as easy as possible. This is a balancing act. If you make it too easy, standards can slip. If you make it too regulated, there is the red tape that the Leader of the Opposition promised to wipe out overnight. This is a balancing act which obviously the member for Prospect just does not understand.

These reforms are not just part of the balancing act that must be engaged in between the government and the industry; the process also draws in all the states. It is part of the COAG reform agenda. Not only are the minister and the government negotiating this with the industry; they are also negotiating it with the states. They have done that very effectively. The other governments of Australia are following the government’s lead and participating in the process. As a result of this consultative process with the business and investor community, we have 32 measures to simplify and streamline Australia’s corporate and financial services law. They follow in the wake of a paper which was distributed by the parliamentary secretary last November, called ‘Corporate and Financial Services Regulation Review—Proposals Paper’. After its distribution, 100 submissions were received. The paper indicated the kinds of measures we are now seeing implemented here by the parliamentary secretary. I congratulate the parliamentary secretary. I think these measures are major achievements, and he is right to trumpet them as he does in his press releases. Australians need to know that the government is forging ahead with these achievements. We do not need the kind of carping criticism that came so glibly from the member for Prospect. He thinks that tomorrow he can issue a press release, written in invisible ink on the back of a stamp, and everyone will then be so much happier. As a result of the efforts of this government, in 2006 the World Competitiveness Year Book ranked Australia third out of 61 countries for the protection of shareholders’ rights and share market financing. At the same time we are providing further protections for shareholders.

I want to talk about some of the areas in which this legislation will be making reforms. In particular, there is the proposal to remove the need for what is called a ‘statement of advice’ when providing financial advice with a simpler document called a ‘record of advice’. The threshold for that change would be $15,000 or less. So the government is saying that small shareholders or investors seeking advice can get it in a more simplified form without having to pay the added cost and without the difficulty of seeking the more complicated statement of advice. That is one area in which changes are being made. There is also the issue of fundraising. We know that often the need to raise funds for investment can come up very quickly, so it is important that we facilitate businesses having the flexibility, and the investment markets having the opportunity, to quickly raise funds in a flexible manner. That is where we come to the issue of encouraging employee share ownership. The government is reducing the cost of raising funds by, for example, removing various disclosure requirements. We are also taking steps to encourage employee share ownership. Unlike the opposition, a stated goal of the government is employee share ownership. The coalition parties want to see it proceed, to the great benefit of all Australians.

There are also changes to a company’s reporting obligations. In that process, for example, we have looked at what is the definition of a ‘large proprietary company’, which requires a high level of company reporting. We have looked at that taking into account where the economy is today and the changes in the way companies operate. When we seek to identify a large proprietary company, we are seeking to identify companies that are economically significant. That is what it is supposed to identify. A lot of the thresholds that apply in identifying those companies have been redefined. There are changes to the current operating revenue and assets thresholds to the tune of 150 per cent. This measure is expected to result in cost savings for about 33 per cent of companies currently required to report.       

The bill facilitates companies doing their reporting on the internet but at the same time requires them to make hard copies available to shareholders who prefer to get them in that manner. This is, of course, merely moving with the times and making sure our requirements fit. In making the change to identifying what a large proprietary company is, we have adjusted things so that future changes to those thresholds can be made more easily by regulation. I think that is an important step because inevitably there will be changes, and the definition of what constitutes an economically significant company will continue to evolve.

Members might want to talk about the interesting issue of the impact of telephone monitoring during takeover bids. There has been some discussion of that in a recent very high profile case—that is, the Qantas takeover bid. During takeovers, all advice from all parties, both the target and the takeover proposer, is currently required to be recorded. This bill will repeal those requirements. Quite a deal of consultation with industries and other parties involved in those processes has quite clearly determined that the benefits gained from monitoring are very small, given the onerous burdens that it places on the companies participating, whether they be targets or proposers of a takeover.

I said earlier that this process has required consultation not only with the industry but also with COAG. I note that the elements of the bill which needed to be considered by the Ministerial Council for Corporations have been so considered, and the council has given its approval. Not only has the parliamentary secretary achieved a great step forward in providing improvements in regulations covering company reporting, fund raising, takeovers and compliance; he has been able to bring with him the other Australian governments involved in the COAG process. So the government has made good progress in this regard, and I look forward to many more meaningful changes of this sort coming forth from the government.

As I indicated at the outset, the process of eliminating red tape continues. We cannot drop the ball on this and governments need to continue the process. We can all stand up and say, ‘Oh, yes, we will get rid of red tape,’ as the Leader of the Opposition has done, but to specify how you will do it is where it comes down to the devil being in the detail. The glib statement, ‘Yes, I will wipe out red tape,’ might impress the member for Prospect but it does not impress the industry, which relies not only on the government’s regulations for its credibility but also, in effect, on the government’s good management for its profits. If you want to have a competitive industry it has to be accessed easily. In this regard the government has the balance right. I commend the parliamentary secretary and thank him for the opportunity to speak in this debate.

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