Senator CONROY (12:04 PM) —I want to correct the record. Senator Campbell, I know it was six years ago, almost to the day, but in fact you are wrong. Back in 1998, as the then parliamentary secretary, you attempted to pass a law through this parliament directing the adoption of the international accounting standards, and it was defeated. It was actually removed. To suggest that there was some process is in fact wrong. You tried to mandate the adoption, and this parliament rejected your attempt. You stand here today and say some sort of process has been gone through, but there was no process. You tried to mug the rest of the country by foisting your view about the accounting standards Australia should adopt. You tried to move it in parliament. There was no process. You had been convinced by a few mates at the Stock Exchange that this was what we needed to do.

For the record, Labor has consistently supported moving to international accounting standards, as has Senator Murray on behalf of the Democrats. We are not motivated by some desire to stop us getting there. We have consistently supported the adoption of international accounting standards. Fundamentally Senator Murray, Labor and the government have supported the time frame of 2005, albeit with warts on. But some of the developments in the last 48 hours do cause us to think about where we are going and where we are pushing on to. Let us be clear about this: back in 1998 the International Accounting Standards Board was a joke. It had no funding. It was a part-time operation and the quality of the standards that existed in 1998 was considered to be a joke. That is not my opinion; that is a broad international opinion.

It is a credit to all involved that the International Accounting Standards Board has been professionalised. Sir David Tweedie is somebody who deserves our support. He has met with Senator Murray, he has met with me—both here and in London on numerous occasions—and I know he has met Senator Ian Campbell and Parliamentary Secretary Cameron since then. Sir David Tweedie deserves support because Sir David Tweedie has his heart, his mind and his intellectual rigour in the right place. He wants to stand up to vested interests. He wants an internationally credible set of standards. But let us not forget that, back in 1998, this board was a joke. Senator Ian Campbell and this government tried to foist on this country a set of standards that was considered to be a joke. One of the reasons it was defeated was that a very credible set of people in this country who understood the issues said, `You can't adopt this process. It is a joke. The quality of the standards that you're asking us to adopt is a joke. The International Accounting Standards Board itself does not have the resources or the intellectual grunt to do it.'

Why is that? It is because here in Australia we actually do have a whole string of people who are internationally credible on accounting standards. We have punched above our weight for many, many years, and we have done that because we have had a rigorous domestic standard-setting process. My concern about the new regime that we are moving to is how we are going to retain that set of credible people. Already many people have resigned from the Australian Accounting Standards Board. It is a miracle and a credit to David Boymal and those who are soldiering on on that board that they can be bothered, because they have got the message from this government and from the FRC that they are simply to adopt whatever standard is approved by the International Accounting Standards Board.

The good news is that most of the standards being put forward are of a sufficient quality to deserve our support. But there are some, as has now been proved with IAS 39, which are of a good quality and which are not going to be part of this process. If we go down the path that we are blindly going down at the moment, we will adopt standards that are not necessarily better than the standards we currently have. That is a matter that this parliament should be concerned about, because our ability to attract capital to this country, keep our markets liquid and allow our good ideas to be converted into commercial operations is critical. We will be increasing the cost of capital in this country if we blindly adopt these standards, particularly with the hole that now exists in them.

I know people keep saying, `We've just got to blindly adopt these and it will lower the cost of capital.' I say to you: no, Australia is a price-taker on this issue. We are not a big component of the world market. We must be at the cutting edge of accounting standards. We must have a better set of standards than most other countries so that international investors know they can come to this country, pick up a set of financial reports and know that they are meaningful—something they cannot do in many countries in the world at the moment. Many countries that are signed up to the international accounting standards have no intention of implementing them. The quality of the financial reports and the investors that we need to attract to this country will depend on the choices that unfortunately are not being made by the Australian Accounting Standards Board, with all the qualities of the people that are on it; they will be determined by a group of people who really have no serious qualifications and have had no serious discussion.

I repeat again to Senator Ian Campbell: read the evidence, read the testimony. I know he has many other responsibilities now, but he is behind the times. The testimony of the Chair of the Australian Accounting Standards Board, then a participant on the FRC and now the chair, confessed—agreed—that there was no process, there was no consultation and there was no paperwork. There was no paperwork at the FRC that was circulated more than 24 hours beforehand, which meant nobody read it. Nobody had time to actually study the proposal, and it was just a resolution. There were no supporting documents. There were no quality arguments taking place. This is admitted by the FRC's new chair. I am not making this up; he said it on the public record. He would not allow that process that took place to take place again, Senator Campbell. So do not just stand up here and repeat your arguments from 1998. It is six years on and a lot has happened—a lot of good things have happened—but do not try and defend this process.

Under the new structure you are proposing—as has been explained—the chair of the FRC's first recommendation for increased transparency is to sack most of the board and replace them with six or seven people. That is the first recommendation. He wants to neck the board and say, `We don't need all these representatives from all these different organisations; we just need a commercial operation, run like a board of a company. There will be no representation from interest groups and no representation from users of financial reports—nothing at all. That is the structure we're moving to.' I say: let us put it out, let us shine the light on it and let us at least have a transparent process so that people can make an informed decision. The FRC have got a couple of tough decisions to make in the next few months about where they go now, what they do about IAS 39 and what they do about the undermining of the rest of the international standards.

David Tweedie will be shattered today, following that vote and that veto in the European Commission, because he has fought hard to get decent standards internationally and he has been done over by the recalcitrance of vested business interests in Europe and by the French. That is what has happened. Let us make sure that Australia can defend itself from bad outcomes internationally. Let us make sure we maintain some integrity and transparency in our processes. Let us try to support those standard-setters on the Australian Accounting Standards Board. Give them some power. Senator Ian Campbell, I urge you to listen to this. I urge you to understand that, if we just make the Australian Accounting Standards Board a rubber stamp, no-one will bother to serve on it. That intellectual grunt that we have developed over many, many years will be frittered away because everyone knows there is no point in being on the board if we have to adopt what we are told to adopt internationally. So let us shine some light and restore some independence and integrity to the Australian Accounting Standards Board. It is faced with challenging times. It deserves our support. It does not deserve to be gagged and directed by people who are not competent to be giving it orders.