Nick McKim (Tasmania, Australian Greens) Share this | Hansard source

Before my contribution was so reasonably interrupted, I was reminding my colleagues in the LNP that John Howard made a commitment to Australia being 'the greatest shareholding democracy in the world', and this legislation crabwalks the Liberal Party away from that. It's important that people understand that, under the existing system of continuous disclosure, civil action can be taken either by ASIC or by private litigants where there is a failure to disclose material information, regardless of knowledge, recklessness or negligence. Schedule 2 of this bill relieves directors and CEOs of this burden. Instead, successful civil action will require proving that those running a company knew that they were in receipt of relevant information and that they should have disclosed it to the market. As the Law Council of Australia put it in their submission to the Senate inquiry:

Boards and senior executives will be able to say they were not negligent with respect to the information that should have been disclosed if they did not have it, whether or not they ought to have had it …

That is the distinction that I am referring to here. While ASIC would still be free, of course, to pursue criminal action against a company for a failure to disclose information, regardless of their state of mind, it would have to clear the much higher criminal hurdle of 'beyond reasonable doubt', rather than the civil hurdle of 'the balance of probabilities'.

So schedule 2 of this bill will pave the way for the insider traders to make hay. It will be a boon for private equity and the other large institutional investors who expect to be the first to know. This is going to be 'wink and a nod' stuff. The rich and the powerful will get the good oil. The well-connected will get the winks and the nods. 'Buy or sell ahead of the great unwashed,' they'll say to themselves, and the companies and their bosses who participate in or facilitate this will with a little cunning—and they've got plenty of that—be immune to any repercussions. Schedule 2 seeks to make permanent the changes introduced temporarily last year when the market was shocked by the pandemic. But newsflash for colleagues: that shock is now in the distant past. So now the government—