Christopher Pyne (Sturt, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

by leave—I present the supplementary explanatory memorandum and move government amendments (1) to (9):

(1) Schedule 2, item 166, page 48 (line 7), omit "of officers", substitute "of disclosing officers (see subsection 293C(1))".

(2) Schedule 2, item 166, page 48 (line 8), before "officers", insert "disclosing".

(3) Schedule 2, item 166, page 51 (line 24) to page 52 (line 32), omit section 293C, substitute:

293C Disclosure of material personal interests of officers

Disclosure by officers

(1) This section applies to each officer (a disclosing officer) of an organisation or a branch of an organisation whose duties include duties that relate to the financial management of the organisation or branch.

(2) A disclosing officer of an organisation must, in accordance with subsection (5), disclose to the committee of management of the organisation details of any material personal interest that the officer has or acquires in a matter that relates to the affairs of the organisation.

Civil penalty:   100 penalty units, or 1,200 penalty units for a serious contravention.

(3) A disclosing officer of a branch must, in accordance with subsection (5), disclose to the committee of management of the branch details of any material personal interest that the officer has or acquires in a matter that relates to the affairs of the branch.

Civil penalty:   100 penalty units, or 1,200 penalty units for a serious contravention.

(4) A disclosing officer does not need to disclose an interest under subsection (2) or (3) if:

  (a) the interest:

     (i) arises because the disclosing officer is a member, or a representative of a member, of an organisation or a branch and the interest is held in common with the other members of the organisation or branch; or

     (ii) arises in relation to the officer's remuneration as an officer of the organisation or branch; or

     (iii) relates to a contract the organisation or branch is proposing to enter into that is subject to approval by the members of the organisation or branch and will not impose any obligation on the organisation or branch if it is not approved by the members; or

     (iv) is in a contract, or proposed contract, with, or for the benefit of, or on behalf of, a related party of the organisation or branch that is a body corporate and arises merely because the officer is on the Board of the related party; or

  (b) the officer has given a standing notice of the nature and extent of the interest under section 293D and the notice is still effective in relation to the interest.

(5) A disclosure made under subsection (2) or (3) must:

  (a) be made as soon as practicable after the interest is acquired; and

  (b) provide details of:

     (i) the nature and extent of the interest; and

     (ii) the relation of the interest to the affairs of the organisation or branch; and

  (c) be made:

     (i) at a meeting of the committee of management (either orally or in writing); or

     (ii) to the members of the committee of management individually in writing.

The disclosure is made under subparagraph (c)(ii) when it has been given to every member of the committee of management.

Committee of management must record details of disclosure in minutes of meeting

(6) An organisation or a branch contravenes this subsection if a committee of management of the organisation or branch (as the case may be) fails to record details of a disclosure made under subsection (2) or (3):

  (a) if the disclosure is made at a meeting of the committee of management of the organisation or branch—in the minutes of the meeting of the committee of management at which the disclosure is made; or

  (b) in any other case—in the minutes of the first meeting of the committee of management after the disclosure is made.

Civil penalty:   100 penalty units.

(7) An organisation or a branch contravenes this subsection if a committee of management of the organisation or branch (as the case may be) fails, within 28 days of being requested in writing to do so by a member of the organisation or branch, to provide to the member details of disclosures made to the committee of management under subsection (2) or (3).

Civil penalty:   100 penalty units.

(4) Schedule 2, item 166, page 55 (lines 13 to 15), omit subsection 293F(3), substitute:

(3) Subsections (1) and (2) do not apply if:

  (a) subsection (4) allows the officer to be present and take part in a discussion with respect to the matter; or

  (b) the interest does not need to be disclosed under section 293C.

(5) Schedule 2, item 166, page 56 (after line 32), after subsection 293G(5), insert:

Arm ' s length terms

  (5A) Subsections (1) and (2) do not apply to a payment made to a related party if the payment is made on terms that:

  (a) would be reasonable in the circumstances if the organisation, or the branch, and the related party were dealing at arm's length; or

  (b) are less favourable to the related party than the terms referred to in paragraph (a).

Small amounts given to related party

  (5B) Subsections (1) and (2) do not apply to a payment made to a related party if the total of the following amounts is less than or equal tothe amount prescribed by the regulations for the purposes of this subsection:

  (a) the amount of the payment;

  (b) the total of all other payments given to the related party, in the financial year, in relation to which subsections (1) and (2) do not apply to the payment because of this subsection.

  (5C) In working out the total of the payments referred to in paragraphs (5B)(a) and (b) disregard:

  (a) amounts that have been repaid; and

  (b) amounts that fall under any other exception in this section.

Payments to members that do not discriminate unfairly

  (5D) Subsections (1) and (2) do not apply to a payment made to a related party if:

  (a) the payment is given to the related party in their capacity as a member of the organisation or the branch; and

  (b) making the payment does not discriminate unfairly against the other members of the organisation or the branch.

(6) Schedule 2, item 166, page 57 (line 2), omit "293C(1) or (2)", substitute "293C(2) or (3)".

(7) Schedule 2, item 166, page 59 (line 34) to page 60 (line 1), omit "officers of the organisation or the branch, and by the organisation or branch, under Division 2", substitute "the organisation or the branch under sections 293BC, 293G and 293H".

(8) Schedule 2, item 166, page 60 (line 5), omit "Each", substitute "Unless exempted under section 293M, each".

(9) Schedule 2, item 166, page 60 (after line 27), at the end of Division 4, add:

293M Commissioner may grant exemption from financial training

(1) An organisation or branch of an organisation may, in writing, apply to the Commissioner for an officer of the organisation or the branch to be exempted from the requirement to undertake training under section 293K.

(2) The Commissioner may grant the exemption if the Commissioner is satisfied that the officer has a proper understanding of the officer's financial duties within the organisation or the branch because of the officer's:

  (a) experience as a company director; or

  (b) experience as an officer of a registered organisation; or

(c) other professional qualifications and experience.

(3) The Commissioner may grant the exemption subject to any conditions that the Commissioner considers appropriate in the circumstances.

I am pleased to move the government amendments that have been circulated. They will improve this bill and, importantly, fix a number of implementation issues that have arisen under the current framework. In 2012 the now Leader of the Opposition introduced amendments to this act which were rushed through the parliament with minimal consideration. Since that time, a number of issues have arisen that need rectification.

Interestingly, a number of the issues that have arisen as a result of the now Leader of the Opposition's own amendments have been bizarrely identified by those opposite as reasons not to support this bill. For example, Labor members have said in this debate that disclosure goes above and beyond the Corporations Act. For the benefit of members opposite, I can advise that the level of disclosure was introduced by the now Leader of the Opposition himself in his second reading speech, saying:

This bill will require the rules of registered organisations to provide for the disclosure of remuneration, including board fees, of the five highest paid officials of the organisation as well as the two highest paid in each branch, to the members of the organisation. Determining the five highest paid officials will be based upon monetary remuneration rather than non-cash benefits. However, where an official's remuneration is required to be disclosed, that disclosure will require non-cash benefits paid to the official to be identified.

These requirements came into effect on 1 January this year under the current act as implemented by the Leader of the Opposition.

Labor members have said in this debate that disclosure is too invasive and covers family members. The government agrees and again notes that this level of disclosure was introduced by the now Leader of the Opposition himself. I will quote him again. He said:

Under the amendments proposed by the government, registered organisations will be required to amend their rules to provide for the disclosure of transactions between the organisation and related parties, which may include the family members of officials.

These requirements came into effect on 1 January this year.

Labor members have said in the debate that even those with lots of experience require the training, but this was another requirement introduced by the now Leader of the Opposition. His new training requirement required that all existing officers received training before 1 July.

Today the opposition will have the opportunity to put its money where its mouth is and support fixing these problems that have come up as a result as the Leader of the Opposition's rushed amendments. These amendments are common sense. They amend the disclosure requirements for officers of registered organisations to more closely align them with the Corporations Act so that the requirement to disclose material personal interest applies only to those officers whose duties relate to the financial management of the organisation. They remove the more invasive disclosure requirements for officers of registered organisations to report family members' material personal interests and thereby more closely align with the Corporations Act.

The amendments align the material personal interest disclosure requirement for officers of registered organisations with the Corporations Act so that disclosures need to be made only to the governing body and not to the entire membership. They limit disclosures of related payments to payments made above a certain prescribed threshold with certain other exceptions based on the exceptions of the Corporations Act and member approval of related party transactions.

Finally, the amendments provide the Registered Organisations Commissioner with the discretion to waive the training requirements of officers of registered organisations if the commissioner is satisfied they fully understand their financial duties because of their level of qualification—for example, if a member is a certified and practising accountant.

Let me be very clear: unless these amendments pass the parliament, officials of registered organisations will continue to run the very real risk of being in breach of the laws as they stand today in relation to the issues identified by the opposition that I mentioned earlier. If this bill and these amendments are not passed, officials of registered organisations must declare all material personal interests of their family members under the current law or face financial penalties. So the opposition has a decision to make. It can either support the coalition's efforts to clean up this mess created by the Leader of the Opposition or it can allow its laws to prevail and see the consequences of that. I commend the amendments to the House.

Question agreed to.

Bill, as amended, agreed to.