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Monday, 23 September 2002
Page: 4614

Senator WONG (2:50 PM) —My question is to the Assistant Treasurer, Senator Coonan. Can the minister confirm that submissions have already been obtained from the public on the report on auditor independence provided to the government by Professor Ramsay in October 2001? Further, can the minister confirm that, of the 11 proposals in CLERP 9 dealing with auditor independence, all of them are substantially the same as that proposed by Professor Ramsay? Why, then, are further comments being sought on these proposals, instead of legislative action being taken?

Senator COONAN (Minister for Revenue and Assistant Treasurer) —Thank you, Senator Wong, for your question. Yes, it is the case that the proposals in CLERP 9 on auditor independence pick up all of the recommendations of Professor Ramsay and in fact go even further. Rather than simply rest on our oars and our laurels, the government believe in consultation. We think that it is appropriate—

The PRESIDENT —Order, Senator Kemp and Senator Conroy! The opposition asked a question; I think you should give the Assistant Treasurer the opportunity to answer it.

Senator COONAN —that we put out a detailed paper containing a number of recommendations relating to auditors' independence—which is one of the key planks of the government's response on corporate governance—and that we have careful regard to the very sound recommendations of Professor Ramsay. But there is no reason just to rest there. It is important that the government go and consult. We have said that we would consult extensively on this exposure draft on CLERP 9 before we committed any view to a legislative response.

I do not know whether they have Senator Wong working at all on corporate governance on the Labor side. Of course, she would not have been able to do it in the past 13 years. But Labor's paper on corporate governance was a slipshod policy attempt which really did not address this issue in any significant way. It was nothing more than a cobbling together of existing laws—what the government had foreshadowed. It pinched stuff from Ramsay and from Senator Campbell. In fact, this paper fails to say how Labor will address many of the issues it lists, including auditor independence. It is littered with words like `ensure' and `examine' and it is a sure sign that Labor, as usual, has taken the easy way out of framing thorough, well-reasoned, constructive policy. CLERP 9 is a well thought out proposal. It is well thought out in relation to auditor independence, and it is certainly one that will allow both the business community and all other entities having an interest in this matter to have a view and to bring their views to the government so that we can have a legislative response in place and a draft bill by 22 November.

Senator WONG —Mr President, I ask a supplementary question. Is the minister aware of the proposal in CLERP 9 to facilitate improved shareholder participation by electronic means and in particular the proposal to request that the ASX's Corporate Governance Council prepare guidelines for their use? Can the minister confirm that in August 2001 the former minister for financial services appointed Professor Elizabeth Boros to investigate ways companies can use technology to improve investor relations? What did Professor Boros recommend and why haven't guidelines already been developed?

Senator COONAN (Minister for Revenue and Assistant Treasurer) —To start with, thank you very much for the supplementary question, Senator Wong. Obviously you have to change the law to be able to facilitate electronic assistance in this kind of way for auditor independence. That is precisely what is being done in CLERP 9. Senator Wong must have realised that in fact CLERP 9 and the proposals that have been put out will give opportunity for further consultation. It is very important that both the response to CLERP 9 and any draft legislation be consulted upon. It is important that all advantages can be taken of modern and more effective ways of ensuring auditor independence, including by electronic means. That is precisely what this government is doing. It is doing it within a time frame that will enable a response by early next year.