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Thursday, 26 February 1987
Page: 667

Senator GARETH EVANS (Minister for Resources and Energy)(10.53) —in reply-I thank the Senate, particularly Senator Alston, for the support for the Australian Stock Exchange and National Guarantee Fund Bill. A couple of matters need some quick attention in reply. The first matter relates to the Executive Director of the Australian Associated Stock Exchanges. It was the view of Senator Alston, and apparently also Mr Spender in the other place, during the course of this debate that there should be no limit on compensation for any one claim for loss of property in the event of a dealer insolvency. The Government's response to this expression of concern is as follows: The Executive Director of the Australian Associated Stock Exchanges was invited to raise any matters of concern he had with the Bill in January 1987 and no comment was received from him on the aspect raised by the honourable senator. The Ministerial Council on Companies and Securities can see no reason in principle for different limits on compensation between clients who have lost money and clients who have lost property. To ensure that the insolvency of one broker does not prevent clients of another broker from missing out on being able to claim from the fund, there are two limits set. Each client can be paid only $50,000 and the most that can be paid in total to all clients of one insolvent broker is around $2m, that is to say, 14 per cent of the $15m in the fund. If a broker fails to deliver property and it is still in existence, it will be given to the client. If not, $50,000 can be paid to the client. This is clearly a sensible result. If money has to be found from the fund to replace property, a client should do no better than a client whose $50,000 in cash was not properly used to purchase shares. I hope that that is not only a sufficient explanation of procedural issues involved here, in terms of who made what representations to whom and when, but addresses the substantive concern raised.

As to Senator Alston's references to the desirability of a national scheme and the support of the business community for that, I can only utter my usual heartfelt personal amen to that. I hope that this is one example of the difficulties of operating the federal system which can, sooner rather than later, be eventually overcome. In the meantime, we have a need, as Senator Alston acknowledged, for better funding of the National Companies and Securities Commission. I want to make a point or two about that. The Attorney-General, Mr Lionel Bowen, has recently publicly indicated that the States collect fully $137m in companies and securities fees but put back less than half of that-$65m-into companies and securities regulations. The Commonwealth Government, of all those participating in the scheme, is the only one which puts more back into companies and securities administration than it takes from the business community in revenue. The Attorney has recently publicly indicated that he is pursuing with the NCSC the question of why it does not appear to be using the 1,400 people who presently exist on the ground in the State corporate affairs commissions. Even if we cannot get the States to exercise a bit of responsibility and put some more funding into the NCSC, an alternative is for the NCSC to be able to utilise such skills as exist on the ground in the CACs. This issue is lively and current, but the Government has very much to heart the interests of ensuring the effectiveness and viability of the NCSC, hopefully by better co-operation in these respects from the States.

Senator Alston —Do you have an objection to private sector funding of the NCSC?

Senator GARETH EVANS —That is not a proposition on which I would wish to take a position in my representative capacity.

Senator Alston —The Attorney seems to be well and truly against it.

Senator GARETH EVANS —I will seek his views on that subject and no doubt he will make them known in due course, if he has not already. With those short remarks, not being one of those lawyers who have devoted hours to reading this Bill, I commend the Bill accordingly to the Senate.

Senator Sanders —You don't have trouble sleeping? It looks like it would be very soporific reading.

Senator GARETH EVANS —I think that is indeed the case. I do not have any difficulty at all in sleeping after dealing with you lot in here day after day, I can assure you.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.