Sam Dastyari (NSW, Australian Labor Party) Share this | Hansard source

Lower than politicians, I may add, Senator Williams. The last Labor government undertook substantial industry consultation on the proposed reforms, issuing an options paper: 'A modernisation and harmonisation of the regulatory framework applying to insolvency practitioners in Australia' and a later proposals paper: 'A modernisation and harmonisation of the regulatory framework applying to insolvency practitioners in Australia'. This formed the basis of draft legislation, but the proposed legislation did not pass the parliament prior to the 2013 election.

The Insolvency Law Reform Bill 2015 enacts many aspects of Labor's proposed reforms to the corporate and personal insolvency framework and some new proposals from industry. This government commissioned the Productivity Commission to examine the impact of personal and corporate insolvency regimes on business exits in its Business Set-up, Transfer and Closure Inquiry Report. It made a serious of recommendations. Despite generally supporting the insolvency framework reforms, we do have some concerns around some aspects of this bill. Some fine detail of the bill is deferred to a legislative instrument called the Insolvency Practice Rules. The intended Insolvency Practice Rules have not been released yet and should be released to allow insolvency practitioners to prepare for regime change.

The bill claims a compliance saving of $50 million, but the industry association, ARITA, rejects this compliance saving, saying that regime change will cost them substantially. The government have foreshadowed further changes to the insolvency framework as part of their innovation statement. In order to minimise the cost of regime change to the industry, the government should promptly release any proposed reforms and try to harmonise the phase-in of these two separate tranches of insolvency law reforms.

In conclusion, this is a bill that Labor will be supporting. This is a bill that enacts a series of measures, many of which had actually been proposed by the previous Labor government; but, in doing so, we do want to raise our concerns that, through greater transparency, greater certainty can be given to the industry and that, with a few transparency measures that can easily be undertaken by the government, a lot more certainty can be given to industry.