Senator IAN CAMPBELL (6:23 PM) —I think Senator Murray is quite right: there is a debate about this matter. When I first had to turn my mind to it, I had a number of conflicting views put to me. Some managers and directors are not overly opposed to 28 days because there are benefits in some respects. But a number of shareholders and shareholder groups are opposed to 28 days if they are trying to take action against a company and against directors and are trying to get something resolved. For example, if control of a company has passed and a group of dissident directors are quickly trying to organise an extraordinary general meeting, they want to move quickly. I know that, even under the current law, some groups of directors who have approached me believe that it is very hard to take action against directors who they believe are acting against the interests of shareholders.

So if shareholders who believe that directors are acting against the interests of the company want to call an extraordinary general meeting, they have to go through the process of getting together enough minority shareholders to petition for an extraordinary general meeting and then have to wait 14 days. I think it is 14 days, but for the sake of the argument it does not really matter. The argument is that this is not a provision that is protecting directors from a meeting and that shorter periods are better for directors. Shorter periods are, for many minority shareholders, not a bad idea. They allow them to take action and get that action.

I know that Senator Murray and people like Shann Turnbull—who try to promote shareholder activism, as I and the government do—would see that having to wait 28 days to have an extraordinary general meeting because of this new notice provision would be an eternity. I would like to put to bed the argument that having long notice periods is pro-shareholders and directors are opposed to it because it hurts them. Long notice periods can be quite harmful to shareholders trying to take action.

The main source of support for 28 days is actually international funds. The push comes from people in Florida, and I am not saying this in a derogatory, xenophobic way. It comes from large international fund managers who would prefer to have 28 days because they are further away. I have put it to them—my friends from Florida, San Francisco and other places—that, with modern telecommunications and with the facilitation of electronic commerce that is in this bill and in the CLERP bills, the requirement for it is reducing as time goes by; it is not increasing.

As with a number of these other matters, this does deserve further focus. Again, this was one of the amendments that was supported by the joint parliamentary committee in its initial inquiry. As you say, Senator Murray, the existing requirement is for 14 days. The government has extended it to 21 days. We thought that for the domestic mums and dads—which is the cliche of the 1990s—the mum and dad investors, who are the great bulk of shareholders in Australia, and even for institutions in Australia, so Australian institutional investors, 21 days is a 33 per cent increase on what they have at the moment. It is a long time for an institution, with all of their expert advisers on these matters, to make up its mind about how it is going to vote at an EGM or an AGM.

But really the benefit you are trying to deliver is to foreign shareholders, and that is where I struck the balance. Twenty-one days is what we regard as a nice balance. Again, it is not something that I would seek to die in a ditch about or fight for the rest of my political life about. The government will oppose this. This is not one of the ones that we regard as a bit here or there. We do think that moving out to 28 days is quite a significant change: you are doubling the notice period. It is quite a significant change. The government at this stage remains opposed to 28 days.

What I am prepared to say, however, is that I would be very pleased to see a bigger debate amongst the general corporate law community about 21 days versus 28 days. I have really not seen a lot of argument that favours 28 days. As for shareholder groups like the ACA and the Australian Shareholders Association, you cannot strongly oppose something like 28 days versus 21, but I know that the push for this comes from overseas because they want a bit of extra time in which to consider these things. That is a legitimate concern.

When I try to balance these things, my general approach is to weight it in favour of the great bulk of shareholders in Australia and Australian institutions, who are not really worked up about whether it is 21 days or 28.

There is a downside, Senator Murray, as you have suggested. The downside is it takes longer to get things done. I will reassert for the third time that it is a detriment to small shareholders who are trying to take action against directors who they believe are not acting in the interests of the shareholders. A case I have had put before me at least half a dozen times in Western Australia while I have been in this portfolio has been where a hundred shareholders want to get together and call an EGM because they think the directors are selling off company assets.

Small shareholders come to me saying, `We are trying to get this EGM together; we want to stop these directors selling this mine'—or prospect or whatever—`but they are going to flog it off to someone else before we get to the EGM. Once we get to the EGM it is too late.' This is in a 14 day scenario. They have to get their petition together and organise the EGM and in the meantime these directors, they believe, are acting in this way. Longer notice periods can be to the significant detriment of small shareholders. I think we have found a balance. I am convinced about it, but it is something that could constructively be considered by the committee of which you are a member.