Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Hansard source

That is right: you want brevity; you ain't getting it—not on this. While I do appreciate that you have been a lot more open in recent times and you have accepted some Labor propositions, we moved amendments to increase the assets and turnover cap that were contained in this bill. What you had originally was the government saying, 'You can only access with asset and turnover caps of five mill.'

The last time this bill was considered, we recommended via an amendment that it go up to $10 million. You have now increased it to $25 million. So it is now open to a broader range of companies—and that is a good thing. If it forms an alternate platform for people to be able to access capital, that is a good thing. By the way, the government has never acknowledged that this is as a result of the amendments that Labor put forward. I am not heartbroken about it. I think we can live. But it is interesting, Assistant Minister, that the last time you stepped forward, the government said that this was a great bill and that it was reflective of broad consultation and broad agreement, and we then put it to a Senate inquiry process and you saw that agreement unravel and you saw people indicating in very forceful terms how bad that framework was. You made the amendments, which is a good thing, but I think you should take this a step further.

I certainly recognise how wretchedly difficult and risky this is for a government. Changing the Corporations Law in this way, particularly where public companies have been central to the operation of the Corporations Law, is difficult. But guess what? That is what disruption is about. In this age, where everyone talks about digital disruption, that is what this is going to do. It requires us to think differently. You have set up and you promote regulatory sandboxes as being oversighted by ASIC and you say, 'This is a good thing,' but you are not prepared to actually create a safe harbour within this legislation to allow private companies to work.

We had suggested previously to the government a way to overcome this issue. We appreciate that this is a significant hurdle. This is not a political issue per se within government; this is about risk management—and I totally get that. But you could easily sidestep this, in that, once a company, a small business or a start-up elects to use an intermediary, a crowdfunding platform, the usual expectations triggered under the Corporations Act are suspended and are replaced by another set of expectations. We put that forward by way of an amendment the last time, and it has not been picked up this time. Apparently, it is too hard. It is not; it could be done.

Why we signalled our preparedness to work in a bipartisan way with the government on this was to say, 'We're not going to play games on this issue; we understand the risks that are involved, but there is a way around it.' Frankly, we as an opposition are not prepared to countenance this; we think a smarter way to do it is to get this right the first time. This does smack a bit of the government just trying to chalk up a win. They just want to get this legislation through and chalk up a win and have the halo effect of a win and then next year come along and say, 'Now it is time to fix it'—which is just crazy. It is going to take ages to get this framework up anyway. I reckon you have at least a six-month lead time to get this done. So why do it that way?

We got caught out through the way in which some of the previous orders of the day had been managed and we did not get a chance to circulate the second reading amendment that we are intending to move, where we basically indicate that, while not declining to give the bill a second reading, we are calling on the government to present on the first day of the autumn sitting of the House legislation that contains a genuine and comprehensive framework for the introduction of equity crowdfunding that, firstly, can actually be used effectively by both unlisted public companies and privately held firms; secondly, provides improved protections for retail investors, stronger than those currently proposed by the government; and, thirdly, avoids placing a heavy regulatory or investor relations burden on start-up enterprises and small businesses.

We are not comfortable, and we are going to put on the public record that we are not comfortable, with the watering-down of the protections from five to two days, and we think that you need to avoid placing a heavy regulatory or investor relations burden on start-up enterprises and small businesses. We think that there is a better way that this can be managed and that it should be done properly the first time. As soon as I get my colleague to countersign the amendment, we will be on our way. We certainly think that the amendment needs to be considered by the government because, as I said earlier, we are going to be coming back anyway to fix this.

I understand that the Treasurer is very energetically pressing the case for Treasury to consider this very quickly and thoroughly—and I take the Treasury representatives who briefed us on this at their word that this happening—and the Treasurer mentioned it in his second reading speech. Once Treasury gets its advice to government, and this is going to be changed. So get it right the first time and do not deny the ability for a new stream of funding to support early stage innovation companies or small businesses. And, again, do not compel companies or firms as to when they go public. As a Labor representative, I am here saying that it is not the role of government to force the arm of small businesses as to when they make the decision to go public—because, as you well know, once they make that decision, it is hard to wind it back. It does take time to wind it back, and the conditions and circumstances in which that occurs are completely different.

I have indicated that we are going to move a second reading amendment, which will be seconded by the member for Eden-Monaro, and we are seeking that that be considered as part of this process. I repeat: we are very prepared to work with the government on this. We have a demonstrated record of bipartisanship in trying to support this early. There was a moment when that broke as a result of the government rushing through legislation without consulting genuinely with us. They have attempted to do that, albeit they had already made up their minds and they were communicating a decision that had been made, rather than actually entertaining a proposition that they would alter the most fundamental objection that we have on this in terms of the way in which it is being closed up.

We do believe this needs to be referred to a Senate inquiry to determine whether or not the changes contained in this bill will allow the system to be used in a much broader way, which we are concerned is the case. We also want to test whether or not it is wise for us to water down investor protections, as envisaged by this bill, as opposed to another regulatory response that could alleviate the concerns that have been expressed by some that campaign gaming will be used in a disruptive and wilful way against small enterprises, start-ups, small businesses and the like. There has to be another way to fix that. Again, if there is any way that we can lighten the burden on small enterprises and start-ups so that they do not have to have very complex or complicated investor relations management regimes, that would be good too.

Again, we are just as keen as the government to see an equity crowdfunding platform or framework in place. We referred to CAMAC the actual investigation or inquiry in the first place. We supported the government in progressing this further, even though after some great work by CAMAC, which is acknowledged by those opposite, they then, insanely, tried to shut down and abolish CAMAC, which plays a vital role in advising governments in complicated areas like this. Anyhow, we think that it still has a role to play, as evidenced by its equity crowdfunding investigation. Having said that, we are committed to working with the government, we do not want to play games on this and we hope that the government will play ball. I move:

That all the words after "That" be omitted with a view to substituting the following words:

"Whilst not declining to give the bill a second reading, the Australian Government is required to present on the first day of the Autumn sitting of the House legislation that contains a genuine and comprehensive framework for the introduction of equity crowdfunding to Australia, that:

(1) can be used effectively by both unlisted public companies and privately held firms;

(2) provides improved protections for retail investors, stronger than those currently proposed by the Government; and

(3) avoids placing a heavy regulatory or investor relations burden on startup enterprises and small businesses.

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