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Wednesday, 25 February 1987
Page: 722

Mr LIONEL BOWEN (Attorney-General)(4.39) —in reply-I thank all honourable members for their contributions. The Australian Stock Exchange and National Guarantee Fund Bill is not opposed and I welcome that. A number of honourable members raised a couple of points which I will do my best to answer. The honourable member for Dundas (Mr Ruddock) raised the issue as to whether there might be a danger in the sense of what he called business rules which could be the subject of disallowance. We do not see any particular problem with that position because that is virtually the situation that has existed for a long time. The Bill merely continues the pattern that has existed in previous legislation. I am assured that the stock exchanges have no difficulties with this approach. The same principle applies to parliamentary disallowance. In other words, the rules will operate until such time as there may be a disallowance; so there will be no interruption of what might have been the intention of the Australian stock exchange. I am sure that if there were some suggestion of disallowance the exchanges would be well aware of it.

The honourable member for North Sydney (Mr Spender) raised a couple of matters. One of them related to the question of drafting. It is a bit of a perennial problem in the Ministerial Council that the Victorian draftsmen feel that they can write legislation in plain English and the Commonwealth draftsmen feel that they can do it better. There is a contest about whether they are both using plain English. As far as we are concerned the important thing is to get simplicity in drafting-drafting that can be understood. I accept that some of the matters are of a contentious nature in terms of how extensions of what was intended might be interpreted. We have achieved a fair amount of success in this area despite objections from those who do not have to do the drafting. That is no criticism of any comment made but it goes to the issue of whether the drafting could have been done in simpler English.

I make the point that it is very important that we understand that what has been achieved is of some significance, because this is a co-operative scheme. There is a need for the Bill. If we relied on what are called separate schemes or arrangements we would have to get approval by each State's Supreme Court and there would be all the difficulties of calling meetings of affected parties in each State. We have overcome this to a fair degree. The drafting was done so as best to meet the complexity of that matter.

The honourable member for North Sydney raised a very interesting point about the problem of compensation and limiting payment to $50,000 when it is related to loss in terms of property damage. That is referred to in proposed new section 122w, on the `limits of compensation'. I am advised that the Executive Director of the Australian Stock Exchange was invited to raise any matters in the Bill that he might have felt were of concern. This matter was not raised. When looking at the Bill I think that the advice given was right-we are looking at a claim having a limitation of $50,000. The honourable gentleman acknowledged that but he asked whether it would not be more appropriate when dealing with an actual loss where a dealer has become insolvent for it to be related to a percentage of the total. For example, 14 per cent of the sum we have at the moment would be in excess of $2m and that is a pretty substantial amount. I ask the honourable gentleman to consider that it is expected that where there is a loss of property there will be compensation by the return of the property in specie. In other words, there would be no limit.

One could hardly draw a distinction between the loss of cash and other damage worth $50,000 and say that compensation should be greater than $50,000. It would be better to return the property, which would be the objective of this proposed new section. We are saying that, while each client can be paid only $50,000, a client who might not have had available shares transferred to him should have them transferred from the insolvent. I think that is the explanation of the proposed new section. Therefore, it is not thought that there needs to be any distinction in the matters that the honourable gentleman has raised. Whilst it is acknowledged that $50,000 cash could be of some value, it would be of more value if we could replace the property which was the subject of the transaction that was not brought to fruition because of insolvency. That could well be done if the property still existed. I ask the honourable gentleman whether that satisfies the issue. I commend the Bill to the House.

Question resolved in the affirmative.

Bill read a second time.