Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

My question is to Senator Coonan, the Minister representing the Minister for Revenue and Assistant Treasurer. Is the minister aware that the Cowra Abattoir, which attempted to sack and then rehire workers on lower rates of pay under Work Choices, was placed into liquidation in recent days? Can the minister confirm that the administrator’s report found that over $1 million was transferred to related companies during the same period in which the Office of Workplace Services conducted its investigation, such transfer reducing the funds available to pay workers’ entitlements? Can the minister further confirm that these loans are the subject of an ASIC investigation? Given that the government’s Office of Workplace Services, at the insistence of the Prime Minister, thoroughly investigated the financial circumstances of the company, can the minister indicate whether OWS ever alerted ASIC to these suspect transactions? Minister, when precisely did ASIC first become aware of the transfer of these funds?

Helen Coonan (NSW, Liberal Party, Minister for Communications, Information Technology and the Arts) Share this | Link to this | Hansard source

I thank Senator Wong for the question. I will certainly share with the Senate information that I can provide, given that obviously the recent events are issues that are operational in terms of what ASIC might be doing. I can confirm that ASIC is the appropriate independent statutory authority responsible for the enforcement of the Corporations Act and for matters that relate to it. It is working closely with the administration—I certainly can confirm that. It would not be appropriate to comment further on the exact substance or status of those inquiries at this particular time, but there is some information that I can give to the Senate in response to Senator Wong’s question which I think will be helpful.

Speaking generally, the law does provide a framework for the investigation of allegations about improper transactions and unfair loans or transactions with related parties occurring before a company’s entry into external administration. Directors must provide the administrator with information about the company’s affairs and financial circumstances, including transactions entered into before the company’s collapse. The administrator must then make a report to creditors about any recoverable transactions. He may also report about possible insolvent trading. The law also requires the administrator to lodge with ASIC as soon as practicable a report about any offences or any breach of duty or trust in relation to the company. A liquidator is able to recover the proceeds of improper transactions entered into before a company’s collapse, for the benefit of creditors, or indeed trace those payments.

Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

Mr President, I raise a point of order. It is very interesting for the minister to read into Hansard details of the operations of the Corporations Law. I am sure senators are aware of that. The question was about when and if OWS alerted ASIC to the suspect transactions which have resulted in workers having insufficient funds to meet their entitlements.

Paul Calvert (President) Share this | Link to this | Hansard source

The minister has two minutes to conclude her answer, and I would remind her of the question.

Helen Coonan (NSW, Liberal Party, Minister for Communications, Information Technology and the Arts) Share this | Link to this | Hansard source

Thank you, Mr President. I am sure it is highly relevant to the question for the Senate to be aware of the arrangements that are likely to apply as these investigations are undertaken. The law imposes heavy sanctions on persons who enter into agreements or arrangements that aim to avoid payments to employees that they would be entitled to in a liquidation. A person can be liable for a penalty of up to $110,000 or 10 years imprisonment for such actions. The legislation enacted by this government in 2000 sends a very clear message indeed to corporate employers that deliberate avoidance of the obligations to employees is not acceptable.

It is important that one not leap to conclusions, and that you allow ASIC to carry out its proper function to investigate what media reports suggest, and that is—and this is a suggestion—that the administrator has identified possible improper transactions by the company in the period prior to the company’s entry into administration, including a possible transfer to a related entity. That is not proven; that is rumoured. It is entirely appropriate that this matter be investigated and that I not be invited to comment, on behalf of the minister, on the substance of the allegation or indeed on the process whereby it will be investigated. It is being attended to.

Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Can the minister advise whether ASIC became aware of the suspect transactions via information received from OWS, or is it the case that it was only via the administrator’s report? If so, does the minister consider it acceptable that the OWS review of the financial statements of the Cowra Abattoir gave it a clean bill of health at the same time as the owners were moving funds to other allegedly related companies? Finally, will the minister guarantee that ASIC will investigate OWS’s knowledge of the movement of funds out of the business and the reason for its failure to provide this information to ASIC?

Helen Coonan (NSW, Liberal Party, Minister for Communications, Information Technology and the Arts) Share this | Link to this | Hansard source

I will say this very slowly for Senator Wong’s benefit: while the matter is being investigated and while it has not yet been established, it is hardly appropriate for me to comment, on behalf of the minister, about events and matters that have not yet been established. I am aware that Senator Wong would like me, and invites me, to enter into this speculation together with her. I do not accept the proposition upon which she bases her question, in the absence of a concluded piece of evidence.