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Monday, 21 June 2010
Page: 5878


Mr RIPOLL (1:48 PM) —It is a pleasure for me also to speak on the Corporations Amendment (Corporate Reporting Reform) Bill 2010 because it is an important further step in the reform agenda of the Rudd government in making sure that we help small business and we ease their regulatory burden and their compliance costs and basically make life easier for them to do their business. It is always interesting to follow a speech from a member of the opposition who, on the one hand, supports our reform and the changes we are putting forward in this area, complains about them as you might expect, and then talks about how this is something we are somehow not getting right—yet they had 12 years in government themselves to do something of similar ilk but did not. We have come to this place with a view that you need to take action to make things happen. That is what we have done by introducing this bill. Even though the opposition complain about this bill, I understand they will be supporting it because it is good legislation. That is important to note.

This amendment bill has a number of very important and key parts, particularly reducing red tape and the regulatory burden on companies, improving disclosure requirements and implementing a whole range of important refinements to our regulatory frame work, to make sure that small business, in particular companies limited by guarantee, have the right sorts opportunities in front of them. There are no extra compliance burdens, regulatory burdens or other costs placed in front of them to do their job. It was back in December 2009 that the government announced the reforms aiming to cut red tape. This was part of our wider agenda, part of our agenda coming to government about what we would do in this area. It was also about improving Australia’s corporate reporting framework.

It is well understood in this country and overseas that Australia has well-regulated, strong, robust corporate governance systems and networks through our Corporations Act and our regulatory system. We are further cutting red tape to strengthen and add to those areas, rather than to weaken them. The reforms in this bill will ensure that Australia’s financial reporting framework remains strong and not just in accordance with world’s best practice but ahead of world’s best practice.

This bill will establish a tailored financial reporting regime for companies limited by guarantee and it will predominantly serve those in the not-for-profit area to reduce their burden and their costs, to let them get on with the business of what they are doing—they serve mostly sport and recreation and charitable organisations. The bill will also continue to ensure that we have the appropriate levels of transparency and disclosure and that we maintain a very strong standing in that area.

The proposed amendments introduce a three-tier differential reporting framework, exempting small companies limited by guarantee from reporting and auditing certain requirements and providing other companies limited by guarantee with streamlined assurance requirements and simplified disclosure in the director’s report. It also means that, for example, the distribution of annual reports to members will be streamlined and can be provided only when members actually ask for those reports, rather than being sent out to everybody. The bill also changes the way dividends can be paid: rather than being based on just profit they can also be based on the capacity to pay—that is, based on more flexible solvency requirements, which is also important. The bill will also relieve companies that are parent entities of the requirement to prepare financial statements for both, which really means that it can be done in one place. The bill goes through a range of other transparency and utility of disclosures contained in the director’s report and an extension of requirements.

There is a lot that I have to say in this area, but I am conscious of the time and I want to give the minister an opportunity to sum up debate on this bill. I am very supportive of this. It is part of our wider agenda in terms of reducing red tape, compliance costs and burdens, and to make sure that small business gets a company tax cut—from 30 per cent down to 28 per cent. In the end, while some people may speak of being the friends of small business, it is the ones who actually take action who are their real friends. I have no doubt that, in the amendments that we are putting forward, that is exactly what we are doing. I fully support this bill and I congratulate the minister for his good work.