Andrew Leigh (Fenner, Australian Labor Party, Shadow Assistant Treasurer) Share this | Hansard source

Part 1 of schedule 1 of the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill 2017 contains a safe harbour for directors for liability for insolvent trading. That safe harbour is intended to support directors to restructure the business and to continue operating to the overall benefit of the company and the stakeholders. Labor acknowledges the intent of the legislation to ensure that directors who honestly and diligently seek to turn around a business are not prevented from doing so.

Labor moved amendments to the bill to strengthen the safe harbour and to protect against its misuse, including increasing the proof that directors must show. Those amendments were not accepted by the Senate. Labor also moved amendments to require a review of the safe harbour after two years to ensure that there are no unintended consequences. That amendment requires that the review look at the impact of the availability of the safe harbour to directors of companies and at the conduct of directors in the interests of creditors and employees of those companies, as well as any other matters that the minister considers relevant. It must be undertaken by three persons who, in the minister's opinion, possess appropriate qualifications to undertake the review, and it requires a written report which must be tabled in each house of the parliament within 15 days after the day on which the report is given to the minister.

This is an important amendment and I commend Senator Gallagher in the other place for her work to ensure that this amendment passed the Senate. Labor will be watching to ensure that the safe harbour does not have a negative effect on workers being paid their entitlements. We will move to make changes if the safeguards in the bill are not effective.

Part 2 of schedule 1 of the bill sets out new provisions to stop the enforcement of ipso facto clauses that are triggered when a company enters administration. Labor has supported government amendments to fill gaps that were identified as part of the Senate inquiry and Labor is supportive of part 2 of the amended bill.

Question agreed to.

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