Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

The Cross-Border Insolvency Bill 2008 has the full support of the opposition, and it has the full support of the opposition because it is exactly the same as the Cross-Border Insolvency Bill 2007—with the exception of the change of the date—which was introduced by the previous government last year. Sadly, this piece of legislation did not get an opportunity to be passed by the parliament, but I note that the government introducing this bill today finishes the good work that was done by the Howard government in this area.

In modern economic life we live in an increasingly globalised world and we have constant electronic communication and asset transfers. There was a time in the past when cross-border complexities would have been restricted to the largest companies in the world, but of course in the world we live in now we have an increasingly changing international environment. Therefore this bill is very timely.

However, when it comes to security and certainty in terms of cross-border insolvency, which is something that is integral to economic confidence for individuals and companies, we have seen that the law has not kept pace with the changes within the international system. In response to that, in 2007, the then Parliamentary Secretary to the Treasurer, Chris Pearce, introduced a draft Corporations Amendment (Insolvency) Bill 2007 that contained an integrated package of reforms to improve the operation of Australia’s laws. It was the first comprehensive package of insolvency law formed since the Harmer review of 1998. The then parliamentary secretary, the member for Aston, well understood that insolvency law is at the very heart of financial and contractual relationships which enable trade and commerce to take place. The development of the draft bill was also greatly assisted by the efforts of the Insolvency Law Advisory Group, a group put together under the former coalition government.

The bill before us will help strengthen Australia’s leadership role in this area, thanks to the hard work and foresight of the previous government. Australia needs a secure and transparent system of enforcing unsecured and secured credit claims. This bill creates certainty that will help business secure loan capital and at a lower cost, which in turn will deliver important economic benefits for Australian business and for Australia.

The bill will take a systematic approach to improving outcomes for creditors and deter misconduct. The bill will give greater weight to measures that are already in place and, in terms of the globalisation of people and of companies, it will provide greater certainty. When an insolvent debtor has assets and/or creditors in more than one country, this bill is vital in terms of security for trade and investment. It will lead to cooperation between foreign and local courts and local foreign insolvency professionals who are involved in cross-border insolvency cases. It will lead to greater legal certainty for trade and investment. It will lead to fair and efficient administration of cross-border insolvencies. It protects the interests of all creditors and other interested persons, including the debtor. This bill will lead to protection and maximisation to the value of the debtor’s assets and facilitate the rescue of financial businesses, protecting investment in employment.

There is no financial cost for these important measures. There already exists a level of cooperation and coordination with other nations in cases of cross-border insolvency. This bill just builds on those existing measures. However, that said, the bill certainly does deliver increased certainty and continues Australia’s leading stance and development in this area. This is extraordinarily important. Given the number of cross-border insolvency cases, it will no doubt increase certainty for individuals and corporations in Australia who are involved in any cross-border insolvencies. I therefore recommend that the House support the bill and it has the full support of the opposition.

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