Ian Goodenough (Moore, Liberal Party) Share this | Hansard source

In speaking in support of the Corporations Legislation Amendment (Deregulatory and Other Measures) Bill 2014, I would say that the corporate governance reforms being proposed are in the context of maintaining the competitiveness of Australian industry in the face of growing competition from emerging countries in our region and capitalising on the economic development opportunities provided by recent free trade agreements. A more efficient private sector will be the key to economic growth and prosperity for our nation.

Currently, the cost of compliance with government legislation and regulation continues to be a major impediment for businesses across Australia. If our domestic industry is to be competitive then the administrative burden of excessive bureaucracy must be lifted. Business leaders in my electorate have raised concerns that their operations are being restricted by an increasingly complex multi-tiered regulatory system, often so complex and technical that it is necessary to engage specialist consultants to achieve compliance. Small businesses to large corporations engaged in multimillion dollar projects alike are affected. The cost of compliance, coupled with additional project holding costs imposed by delays, has a detrimental effect on the financial viability of both business operations and key economic development projects.

The challenge for the Australian government is to foster a strong, competitive environment by reversing overregulation, addressing the factors which increase the cost of doing business in Australia and reforming the regulatory system to increase productivity. The development of strong policies for the business sector in the areas of corporate governance, financial services regulation and industry are required to promote the economic development of our nation.

Since being elected, this government has introduced more than 400 measures across the whole of government, resulting in a net reduction of over $2.1 billion in compliance costs. During this process, approximately 11,000 pieces of legislation and regulation have been repealed, removing some 57,200 pages from the statute books. The coalition government is addressing the way policymakers approach the issue of future regulation across government departments with the introduction of mandatory regulatory impact statements for all cabinet submissions and a deregulation unit in every portfolio. This will ensure that new regulation is introduced sparingly and as a means of last resort.

As I have previously stated in this parliament, the greatest challenge facing Australia in the 21st century is increased international competition from emerging economies in our region. In a globalised economy with free trade and mobility of investment capital across international borders, a nation's economic performance will determine living standards. Over the next decades, Australia will face unprecedented competition for resources and energy as populations seek to improve their standards of living. We will be competing with billions of people who value education and are prepared to work long hours to produce, earn, save and invest to get ahead economically.

This bill is part of the Abbott government's legislative agenda on deregulation. It contains a number of measures designed to improve productivity, competitiveness and the efficiency of government processes and which are expected to reduce business compliance costs by approximately $14 million a year. The proposed amendments achieve a fair and equitable balance between safeguarding consumer and shareholder rights and eliminating unnecessary red tape which is constricting business whilst maintaining accountability and transparency and promoting adequate disclosure.

Firstly, this bill seeks to abolish the existing requirement for directors of public companies to hold a general meeting at the request of a minimum of 100 shareholders—in a bid to prevent the calling of meetings for frivolous or trivial reasons. Experience has shown that activist and lobby groups with less than one per cent of the shareholding in public companies have been able to call general meetings—at significant administrative cost to the public companies—in order to move resolutions which have attracted little support. It is proposed that the new threshold for calling a general meeting be at least five per cent of the votes that may be cast at a general meeting. It is estimated that this measure will save businesses around $1.5 million per annum in compliance costs and it is supported by industry groups such as the Australian Institute of Company Directors, the Governance Institute of Australia and the Business Council of Australia, as well as shareholder groups such as the Australian Shareholders' Association. Groups comprising a minimum of 100 shareholders will continue to be able to put resolutions on the agenda of general meetings and be able to circulate statements to other shareholders.

Secondly, the bill proposes to remove the requirement for unlisted disclosing entities to prepare remuneration reports. This measure is expected to save unlisted disclosing entities approximately $8.5 million in compliance costs. The remuneration reports are not relevant in the case of non-listed entities because, unlike listed entities, unlisted entities are not required to have their remuneration report adopted by shareholders.

Thirdly, the bill attempts to clarify circumstances in which entities, including companies, registered schemes and other disclosing entities, may change their financial year end dates. The bill clarifies, but does not change, the legal operation of the existing law. This measure will put beyond doubt the conditions under which directors can determine that a financial reporting year is to be shorter than 12 months by more than seven days.

Fourthly, the bill contains an amendment which seeks to exempt certain companies limited by guarantee from the need to appoint an auditor. This change is expected to predominantly benefit public entities with a not-for-profit focus, such as sporting and recreation related organisations, community service organisations, education-related institutions and religious organisations. Currently, all public companies are required to appoint an auditor even if they are not required to conduct a full audit of their financial records. This unnecessarily imposes a $4 million compliance burden on business, which this bill seeks to reverse.

A fifth measure proposed gives the Remuneration Tribunal the authority to set the remuneration of the chair and members of the Financial Reporting Council, the Australian Accounting Standards Board and the Auditing and Assurance Standards Board. This will bring the setting of remuneration of those office holders into line with the remuneration setting of public officers more broadly and improves the efficiency of government processes.

Lastly, this bill aims to streamline the operation of the Takeovers Panel by allowing the panel to perform functions whilst members telecommute from overseas. It removes an outdated procedure requiring members to be present in Australia, which is likely have a positive impact on business through the more efficient resolution of applications being considered by the Takeovers Panel.

The package of reforms contained in the Corporations Legislation Amendment (Deregulatory and Other Measures) Bill 2014 will serve to ensure that the Australian economy is able to compete on a level playing field with emerging economies in our region. The growth of free trade within a globalised economy characterised by mobility of capital and investment across national borders requires the Australian economy to be in good shape to stay competitive with the rest of the world. I commend the bill to the House.

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