Andrew Murray (WA, Australian Democrats) Share this | Hansard source

I also rise to take note of this report as a longstanding member of the committee and I stress that the four speakers who have spoken to this report are all extremely active and informed members of the committee. That being so, I do not want to repeat the points already well made by the previous speakers to the report. I think they should be noted by the government, the wider corporate community and the regulator.

I want to repeat that ASIC should get credit for being so available and accountable. Its officers do not hesitate to appear before the corporations and financial services committee and estimates committee, with its full range of executives as required. In my experience, ASIC has been very accessible and open and, I might say, very mature in reaction to sometimes sharp and warranted criticism and so on. However, I confirm the views Senator Sherry just expressed—that is, that ASIC cannot stand on its own.

There are times when the government needs to react with some speed and with some sense of both the import and the need for pre-emptive action. I refer particularly to the events in my own state known as the Westpoint scandal. Scandals like that, where a large number of investors—some very unsophisticated, some somewhat sophisticated—have lost their money, have in Western Australia resulted in state ministers losing elections and being turfed out of office and, indeed, in governments being shaken. I refer to the Court government, which was badly affected by what was known then as the finance broking scandal. It is a reminder to politicians that the electorate will take vengeance if it feels that the political world is not sensitive enough to real issues.

The chair of the committee remarked that Westpoint had proved to be a pack of cards and had collapsed. The difficulty with the Westpoint situation is that it is more than one pack of cards and you have to keep going back and unpacking the next pack of cards, and they will collapse and it goes on and on. With respect to that, the government needs to decide what it can do to assist the regulator to act and close down these matters earlier. In that regard, the one thing that is clear to me is that the issue of the imprecise and difficult regulatory hole left by this promissory note issue—as outlined earlier by Senator Sherry and as covered in the oversight report—does need legislative action. I would urge the government not to wait any longer, but to actually address that issue.

A second issue I wish to refer to briefly is the proposed revision to Corporations Law and issues of disclosure as announced by the government. Part of that is a desire to have another look at the business judgement rule. I am not at all averse to reviewing, refining and improving Corporations Law, and the government is entitled to do it—in fact it would be derelict in its duty if it did not. However, I want to caution that adjustments to the business judgement rule should be done with great care. I think we have to be very wary of changes, and that the business judgement rule is not loosened and weakened to the benefit of corporate executives and directors who might be a little loose on the ethical side.

A third issue I wish to briefly deal with is the issue of insider trading and what is known as the Vizard matter. In that area, I think insider trading is so hard to pin down that ASIC need to pursue this with greater vigour and with more determination than they have. In particular, I think a hands-off attitude to the areas of perjury or alleged perjury and a relatively hands-off attitude to the potential of Mr Lay being obliged to be a witness need to be readdressed. I would suggest that ASIC show more interest in that area than they are at present.

The last area I wish to touch on—and as I said my colleagues on the committee have covered many areas quite fully and I do not need to repeat them—is the issue of insolvency laws. The corporations committee has produced an excellent report on the way in which insolvency laws need to be revised, and in my view many of the problems that ASIC is dealing with could be beneficially affected if the consequent legislative changes proposed by that report were introduced into law. So that is an area where I think ASIC should be urging the government to get on with it and to assist in beneficial reform.

Question agreed to.