House debates
Wednesday, 23 May 2007
Governance Review Implementation (Treasury Portfolio Agencies) Bill 2007
Consideration of Senate Message
Consideration resumed from 10 May.
Senate’s amendment—
(1) Schedule 1, item 24, page 10 (lines 20 to 32), omit subsection 601AE(1A), substitute:
(1A) If the Commonwealth continues to act as trustee in respect of the property, subject to its obligations as trustee, the Commonwealth:
(a) in the case of money—must credit the amount of the money to a Special Account (within the meaning of section 5 of the Financial Management and Accountability Act 1997); or
(b) otherwise:
(i) may sell or dispose of the property as it thinks fit; and
(ii) if the Commonwealth does so—must credit the amount of the proceeds to a Special Account (within the meaning of section 5 of the Financial Management and Accountability Act 1997).
Note: ASIC may, for and on behalf of the Commonwealth, perform all the duties and exercise all the powers of the Commonwealth as trustee in relation to property held on trust by the Commonwealth (see subsection 8(6) of the ASIC Act).
1:56 pm
Chris Pearce (Aston, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source
I move:
That the amendment be agreed to.
The proposed amendment to the Governance Review Implementation (Treasury Portfolio Agencies) Bill 2007 is technical and minor in nature. The amendment clarifies the Commonwealth’s obligations under the Corporations Act in relation to managing property that a company held on trust immediately prior to its deregistration. Under the current law, all property that a company held on trust immediately before deregistration vests in ASIC. ASIC may either continue to act as trustee or apply to the court for the appointment of a new trustee. Under the bill, ASIC will be subject to the FMA Act and as such will no longer be able to hold property on trust in its own name. Rather, this obligation will be transferred to the Commonwealth. ASIC will still have the authority to perform all of the duties and exercise all the powers of the Commonwealth as trustee in relation to any real or personal property or money held on trust by the Commonwealth.
On one interpretation of the original bill, the Commonwealth would be subject to a new non-discretionary operational obligation—that is, to sell or dispose of all property that a company held on trust immediately prior to its deregistration in a manner the Commonwealth thinks fit and subject to its obligations as trustee. ASIC would act on the Commonwealth’s behalf as the trustee but would face undue inflexibility and cost in complying with the new obligation to always divest itself of the subject property. Amending the bill so that the Commonwealth will have discretion as to whether to sell the trust property or not is more consistent with preserving the current operating arrangements than requiring the Commonwealth to sell the property. It was always envisaged that moving ASIC to the FMA Act would not affect the nature of the obligations owed by the trustee. Consequently, it is proposed to amend the bill to ensure the current framework continues as intended. This will preserve the current level of flexibility in ASIC’s management of trust property, for which, of course, it acts on behalf of the Commonwealth. As a result, I commend the amendment to the House.
Question agreed to.