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

The Greens will be supporting the Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2023, so what I want to do in my second reading contribution is basically foreshadow the amendment to this legislation that we intend to move. It's the amendment on sheet 1796, which has been circulated in the chamber and is standing in my name. That amendment would repeal changes made by the previous government two years ago that weakened Australia's continuous disclosure laws and weakened Australia's misleading and deceptive conduct provisions.

Under the pre-COVID continuous disclosure regime, which was introduced by the Howard government in 2001, companies and directors were required to disclose publicly any information that was not generally available and that a reasonable person would expect to have a material effect on a company's share price. If a company or company director failed to comply with these obligations, they could face a civil penalty action either by shareholders or by ASIC. However, a director was not liable for a civil penalty proceeding for breaching those obligations if he or she took all reasonable steps to ensure that the company complied with its disclosure obligations and, after taking those reasonable steps, believed that the company was complying with its obligations.

But, as a result of the changes made by the previous government, the situation now is that companies and directors that failed to disclose price-sensitive information, either at all or in a timely fashion, are liable to shareholders for that failure only if the company or director acted with knowledge, recklessness or negligence. That means it's now easier for companies and directors to get away with failing to provide price-sensitive information to the market. It means it's now easier for companies and directors to get away with withholding information from or providing misleading information to the market and shareholders. The only reason given by the previous government for the changes it made was the asserted need to protect Australian companies and directors from the risk of opportunistic class actions.

The changes made by the previous government put the interests of individual company directors above the interests of mum and dad investors. Even then, not all business organisations supported these changes. In a 2020 survey of 195 senior company executives that was conducted by the law firm King & Wood Mallesons, 80 per cent of company executives said that the changes made by the previous government were a bad idea. The previous arrangements were pro-shareholders. The government's changes were against the interests of shareholders, and they should have been rejected.

Now, Senators, I've got a confession to make. Up until now my speech has been entirely plagiarised. Up until this point—save for an introduction and putting the previous government's changes in past tense—I have recited verbatim from the speech given by the now minister, Mr Jones, in his second reading speech in the House on 15 March 2021 to the Treasury Laws Amendment (2021 Measures No. 1) Bill 2021 that introduced changes to continuous disclosure obligations. I have to say, I really couldn't have made a better case for why the previous government's changes that watered down continuous disclosure obligations need to be overturned than the case that was then made by the now minister when he was in opposition. I couldn't have made a better argument as to why the government should support the Australian Greens' amendments today, because that was exactly the position taken by the now minister Mr Jones when he was in opposition.

So I really hope that the government's able to support our amendments, because disclosure of information of the type that is caught by these amendments is critical to the functioning of a market. People have a right to know what's going on inside companies so they can make better-informed investment decisions. Continuous disclosure obligations never should have been watered down. Today we are giving the Senate and this parliament an opportunity to correct that error.