Jim Chalmers (Rankin, Australian Labor Party, Shadow Treasurer) Share this | Hansard source

I'll be relatively brief because the member for Parramatta and the member for Whitlam before her have characteristically nailed all of the important points. The Treasury Laws Amendment (2021 Measures No. 1) Bill 2021 is really two bills smashed into one; two schedules smashed into one set of legislation, and I think for not the right reasons. The reason why these two things are being considered together is that the government knows we are prepared to be accommodating when it comes to the conduct of virtual AGMs, recognising the difficulty in COVID time of getting shareholders together. We want to make sure that we can find ways to make that more meaningful, to make sure that shareholders can hold executives and boards accountable in the time of COVID, but we are prepared to be reasonable about the conduct of those AGMs for a little while longer.

The second schedule in the bill, as the member for Parramatta and other speakers before her have pointed out, is much more problematic from our point of view. It weakens Australia's continuous disclosure framework and the misleading and deceptive conduct provisions permanently. The reason I emphasise 'permanently' is that there's a big problem here. The government says: 'The economy is going so well that we can pull out this extraordinary support for workers. JobKeeper has got to end because things are going so well. The whole world has returned to normal and the Australian economy is galloping. There's no need for these extraordinary measures in our labour market.' At the same time and on the same day, the same government says: 'Oh, no, things are really difficult. We need to leave these accommodating arrangements in for business so that they can dodge their continuous disclosure obligations.' Those opposite can't make those two arguments at the same time. They have to choose. It's one or the other. Are things going really well and provisions need to be pulled out, or are things really difficult and so we need to leave provisions in? They can't have one approach to one part of the economy, the labour market, and another approach to another part of the economy, the corporations subject to continuous disclosure.

As I said, we've got our concerns with the first bit. We're prepared to be supportive. There's absolutely no reason why we can't consider those two bits separately. But the government, in the usual way for the usual political reasons, has left them together. There are lots of problems, as others have said, with the changes proposed to the continuous disclosure regime. From conversations today, I know that elements of the business community have a different view to mine. That's part of a respectable exchange, and I'm grateful for the conversations that I've had throughout the course of the day. But we do have issues of substance and substantial concerns with the second schedule, and that's why we are taking the steps that we're taking in the House today.

As we know, these were supposed to be temporary measures, but instead, in my view, the government is using this pandemic as an excuse to make them permanent in a way that will do a lot of damage to the way that our markets operate in this country. What's being proposed here is in many ways a solution looking for a problem. It's one of those things that the government has had in the top drawer for some time, and they are hoping that Australians are sufficiently distracted by what's going on with the pandemic, cuts to JobKeeper and the rest of it that they are able to get away with making these changes permanent. We saw it in responsible lending laws. We've seen it in other areas as well.

If you go to the facts and you go to the views of important stakeholders, you discover a few things about what's really going on here. The Liberal Party, those opposite, are obsessed with class actions, when class actions make up under one per cent of cases filed in the Federal Court. They affect only a tiny number of companies that have done the wrong thing. Think about these changes more broadly. Just last year, 195 senior company executives from King & Wood Mallesons found that only every fifth person thought these changes should be made permanent. Over 80 per cent said that the changes hadn't altered the way in which companies were making disclosure decisions.

There's strong opposition to these changes, from the Australian Shareholders Association—we should listen to them—from plaintiff law firms and from the Australian Council of Superannuation Investors. In my view, if the government were confident that they had a good case to make here, they wouldn't have truncated the inquiry process. They made that Senate process so short that many who wanted to make a submission were unable to do so in time. We already know that ASIC and the ACCC have advised the government that the pre-COVID continuous disclosure and misleading and deceptive conduct provisions should be retained. ASIC told the Treasury that these arrangements were a 'fundamental tenet of our markets and particularly important during times of market uncertainty and volatility'. ASIC said that the laws were working well, that they operated to increase the attractiveness of Australian markets for investors and that the economic significance of a fair and efficient capital markets dwarfs any exposure to class action damages.

So this bill as it stands, the second part of it, will hurt mum-and-dad investors, a point that the member for Whitlam has made repeatedly. It will weaken Australia's Corporations Law. It will make it easier for companies and company directors to get away with withholding information from or providing misleading information to their shareholders, and without proper disclosure rules that is much more likely, in our view. These rules don't just protect the retail shareholders—that's incredibly important—but they make businesses stronger and more attractive to investors as well.

Those are all the reasons why we are not supportive of the second schedule. We are not especially surprised to see the government using this pandemic as an excuse to try and make these temporary arrangements permanent. They are never on the side of ordinary Australians—ordinary mum-and-dad shareholders, ordinary workers, ordinary people trying to save for their retirement. Really, right across the board, we've seen lots of examples. Again I return to the fundamental point: if the economy is so weak and uncertain that business requires the extension of what were proposed to be temporary arrangements, then why doesn't that apply to workers who will have their JobKeeper cut this month as well? You can't have it both ways. Either the economy is too weak to remove support or it's too strong to leave it in there. What we're seeing here is a pretty blatant attempt to permanently change—in a detrimental way; in a way that key stakeholders don't support—the arrangements which are so important to the efficient functioning of markets in this country.

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