Mr COSTELLO (Treasurer) (6:22 PM) —in reply—Firstly, I would like to note that, when drafting this legislation, an existing anomaly in the Trade Practices Act was carried into the Financial Sector Reform (Consequential Amendments) Bill 1998 . It is not a defect or error in the drafting of the bill but rather reflects the fact that the amendments mirror the Trade Practices Act. Subdivision E, in particular section 12ED of the amendments, will imply into contracts for the supply of financial services a warranty that the services will be rendered with due care and skill.

If the consumer makes known any particular purpose for which the services are required, there is an implied warranty that the services will be reasonably fit for that purpose. It is not technically possible to breach this provision in a way that leads to criminal sanctions. The provision simply implies a contractual warranty. The same situation arises under the Trade Practices Act.

The government has noted concerns that have been raised about the fact that the bill appears to attach criminal sanctions to breaches of implied warranties. This is not in fact the case, and the bill will have no effect on the rights of parties to contracts into which certain terms are implied by the bill. To make the position absolutely clear the government had intended to clarify the operation of the bill on this question by way of a chairman's amendment, but this has not been possible. The government intends to address this anomaly in the Corporate Law Economic Reform Bill which is proposed to be introduced into the House next week. In the meantime, this anomaly will not affect the technical operation of the provisions.

I take this opportunity to summarise the debate to say that this is major reform of the Australian financial system. This bill puts in place a regulatory system for Australia which will be leading edge in the world. This is something that is being watched very carefully internationally and it gets new prudential regulation, particularly—(Quorum formed) I thank the member for Kalgoorlie (Mr Campbell) for calling a quorum so that people would come into the House to hear the conclusion of this debate. This bill brings to a conclusion substantial reform of the Australian financial system. It puts in place world-class regulation. It puts Australia at the forefront of regulation. It will cut costs and it will ensure that the Australian financial system takes us forward into the next century.

I acknowledge the support that the opposition has given in relation to this. I pay tribute to the officials who have worked hard to bring this about. This is important regulation and it will ensure that the Australian financial system is governed in a prudential, fair and stable way. One of the lessons that we have learned from the Asian financial crisis is the importance of having a stable, well-regulated financial system, and this bill will ensure that Australia has such a system into the next century.

Question resolved in the affirmative.

Bill read a second time.