Jenny McAllister (NSW, Australian Labor Party, Shadow Cabinet Secretary) Share this | Hansard source

I rise to speak on the Commonwealth Registers Bill 2019 and the four related bills being considered together as a package by the Senate this evening. Together these bills are for an act relating to a government registry regime and for related purposes; an act to amend the law relating to corporations, business names, registration and consumer credit and to deal with consequential measures relating to the enactment of the Commonwealth Registers Act 2019; an act to amend the Business Names Registration (Fees) Act; an act to amend the Corporations (Fees) Act; and an act to amend the National Consumer Credit Protection (Fees) Act 2009.

Taken together, these bills have two primary aims. They create a new Commonwealth business registries regime which will allow ASIC and other business registers to be updated to provide a more user-friendly and streamlined registry service. They also introduce a new director identification number which will make it compulsory for company directors to provide proof of identification before registering their companies. This will improve the ability of regulators to combat illegal phoenixing, which costs the Australian economy billions of dollars every year and causes enormous pain to the people affected within the supply chain.

Labor has led the advocacy for both of these reforms and we will support this bill. I am pleased that these bills have been brought before the Senate. For many years, Labor and our allies in the community have been raising the issue of illegal phoenixing, but very little has happened. The senate inquiry led by Doug Cameron reported in December 2015, making a recommendation about director identification numbers. Nearly five years ago that Senate committee concluded its work, having taken evidence about the harm that was being done by illegal phoenixing, yet only now are any practical measures being brought before the Senate. But delay is a consistent theme with this do-nothing government.

After receiving the banking royal commission final report, Prime Minister Morrison and Treasurer Frydenberg took six months—not to do anything, but to release an implementation timetable. One year after the report was on their desks, the government had only completed six out of the 76 recommendations made by Commissioner Hayne. Now the government has announced a further delay. We are calling for the royal commission implementation delays to be limited to no more than six months. It's pretty reasonable under the circumstances. We acknowledge the role that the banks are playing in the crisis. We support a strong banking system and the recent measures that have added needed liquidity and financial support during COVID-19. But the Australian public rightly have an expectation that these recommendations will be implemented.

The government cannot continually delay important and essential reforms, like the implementation of the commission's recommendation, in the same way that it has delayed these reforms associated with business registries modernisation.

Equally disturbing is the delay in reforms to payday lending. One of the bills before us is an act to amend the National Consumer Credit Protection (Fees) Act 2009. Labor has consistently advocated for greater protection for consumers in these areas, in response to ongoing concerns about improper behaviour. We've backed up our advocacy with action. In government we enacted the National Consumer Credit Protection Act 2009, and that created a national regime for the regulation of consumer credit for the first time. In 2012 we made further enhancements, including additional protections regarding small amount credit contracts and consumer leases.

Despite the sound groundwork laid in this area, once again the government has failed to act in a timely way, and it has neglected the other reforms that are necessary to enhance protections for consumers under this act. The government started a review of the small amount credit contract sector in August 2014, at about the same time that the Senate inquiry into phoenixing was wrapping up its work. It was the same year, incidentally, that it started the wheels turning on a business registers modernisation regime. In 2017 the exposure draft on payday lending was released, and after a three-month consultation period that all wrapped up in November 2017.

But, despite having the legislation ready to go and the exposure draft in place, nothing has happened. So, with Senator Griff late last year, I introduced the National Consumer Credit Protection Amendment (Small Amount Credit Contract and Consumer Lease Reforms) Bill 2019. And we've introduced it here as a private senator's bill, a bill that, embarrassingly, seeks to legislate the government's own legislation that it has been sitting on for years. With the support of Senator Griff we've been working through the provisions of that act and an inquiry on the bill in the Senate Economics Legislation Committee. I look forward to that committee reporting and I'm confident it will add to the body of evidence about the need for enhanced consumer protection here. But, if the government had any idea what was going on in the community, they wouldn't need an inquiry and they wouldn't need additional evidence; they would have acted. But, typically, in this area, as in so many other areas, all we get is delay.

Now we turn to the modernisation of business registers. Well, our business registers are in need of modernisation. Currently they operate on severely outdated and inefficient information technology infrastructure. This infrastructure has not evolved with changes in technology or with the needs of business over time. And again the story here is delay. The government first committed to modernising business registers back in 2016. Back then, it was part of an attractively named 'national business simplification initiative'. The intention of that initiative was to reduce the time businesses spent interacting with government so they could get on with the business of keeping the economy moving. Well, in its most recent budget update, the 2019-20 Mid-Year Economic and Fiscal Outlook, only $60 million was allocated to the project. This is a big project. As we've been told time and time again in estimates when we've asked about it, it's a very complex project. The scope is substantial. But the government's track record in implementing infotech projects is really, really poor. The government needs to ensure and provide some guarantees in this place that it is going to invest what is necessary to complete this project successfully.

Similarly, director identification numbers have been on foot for a long time. They're important. The implementation of legal frameworks for director identification numbers will provide a unique identifier for directors of Australian companies and it will provide traceability for those directors over time. Labor has advocated this for a very long time. Without Labor's work on this issue, the Liberals would continue to allow fraudsters to rip off small businesses and their employees. Every year, illegal phoenixing costs Australian workers and businesses billions of dollars. It sees company directors strip businesses of their assets when times get tough, not pay their debts to workers, and then vanish completely, only to start a new business later on. And in many cases directors do this numerous times.

In 2018, a report by PwC estimated that the annual direct cost of phoenix activity to the Australian economy could be between $2.9 billion and $5.1 billion, and this includes up to $3.2 billion worth of unpaid invoices for services provided and up to $300 million of unpaid entitlements for Australian workers. I return again to the fact that these issues were canvassed extensively by a Senate inquiry spearheaded by my friend Senator Doug Cameron.

This place is only now coming to grips with the recommendations made in that report about director identification numbers.

We have long urged the government to act on illegal phoenixing. We commend the government for finally getting around to doing something. We will support this legislation. We encourage the government to implement their long-overdue measures as soon as possible and to properly resource their implementation.