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Wednesday, 22 June 1994
Page: 1880


Senator BOLKUS —On 8 June 1994, Senator Vanstone asked me a question about the Australian Securities Commission. I seek leave to incorporate the answer in Hansard.

  Leave granted.

  The answer read as follows—

  Senator Amanda Vanstone asked the Minister representing the Attorney-General on 8 June 1994 the following question and supplementary question without notice:

  (a) My question is directed to the Minister representing the Attorney-General. Is the government satisfied with the performance of the Australian Securities Commission? Does the government agree that the following factors are currently inhibiting the performance of the ASC: inefficiency, underfunding by the government, and political sensitivity? Is it not true that each of these factors is currently inhibiting the ASC? If the minister denies that any of them is operating to inhibit the ASC, which ones does he say are not so operating? Is it not true that the ASC recently offered funding limitations and political sensitivity as an excuse for apparent inefficiency?

  (b) Mr President, I ask a supplementary question. I thought that the minister might be smart enough to avoid that, so that perhaps he could get some information. I will give him some clues: is it not true that the ASC failed to follow up concerns raised by some directors and the solicitors for Dennewan Limited because it judged it to be a mere internal dispute? Is it not also true that an inquiry by Arthur Andersen revealed a number of Crimes Act and Corporations Law offences have been committed by officers of Dennewan? Is it not equally true that funding for Aboriginal housing has been put at risk by the ASC's and ATSIC's inattention to this matter? Is it not also true that ATSIC knows of at least 12 other matters similar to Dennewan? The bottom line is: what is the Attorney-General going to do about it? Would he not be better advised to spend a little less time putting out press releases on reform of the private legal profession and a lot more time concentrating on public sector legal services and law enforcement, which is, after all, his direct responsibility?

  Senator Nick Bolkus—The Attorney-General has provided the following answers to the honourable senator's questions:

  (a) The national scheme for corporate regulation which commenced on 1 January 1991 has for the first time presented Australia with a truly national Corporations Law and a single, well-resourced regulator, the Australian Securities Commission. The ASC is an independent statutory body accountable to Parliament.

  The ASC and other agencies involved in the national corporate regulatory scheme have an annual budget appropriation which is very significantly greater than the total funding previously provided to the former State and Territory Corporate Affairs Commissions, the former National Companies and Securities Commission and other relevant agencies. While precise figures for the total funding of those bodies are unavailable, it is estimated that the ASC's budget is of the order of 40-50 per cent greater than that previously available to the State and Territory Commissions, the NCSC and other relevant agencies.

  The ASC, like any other regulator, is required to prioritise its functions and direct its resources to those areas which it assesses as most requiring attention. It does so within this significantly increased funding level and it adjusts its priorities from time to time in accordance with its perception of the seriousness of emerging and developing matters, including matters that may be raised in a parliamentary context.

  The efficiency of the ASC is, by comparison with its predecessors, believed to be far higher. The ASC is currently further developing and expanding its range of performance measures so as to better demonstrate this increased efficiency. In the course of this work, it is participating in a review of the efficiency and effectiveness of the whole national corporate regulatory scheme currently being undertaken jointly with the Attorney-General's Department and the Department of Finance. Additionally, of course, the ASC is directly accountable to the Parliament through the Parliamentary Joint Committee on Corporations and Securities, established by the Australian Securities Commission Act 1989.

  (b) The Attorney-General has been advised by the Australian Securities Commission that:

  Some complaints regarding the affairs of Dennewan Limited were received by the ASC in June and July 1993.

  Upon examining these complaints, the ASC concluded that the complaints as made primarily related to the internal affairs of the company and did not give rise to any need for subsequent action by the ASC in accordance with its ordinary priorities for the allocation of resources.

  The affairs of Dennewan Limited again came to the attention of the ASC as a result of enquiries by the Attorney-General's Department, following receipt by the Attorney-General of several representations in relation to the matter. The ASC thereupon took action it considered appropriate having regard to the facts and assertions then made known to it.

  In November 1993 the ASC became aware of a proposal by the Aboriginal and Torres Strait Islander Commission (ATSIC) to commission a report by Arthur Andersen & Co into the affairs of Dennewan Limited.

  As a result of the commissioning of that report, the ASC decided to defer further consideration of the affairs of Dennewan Limited pending receipt of the Arthur Andersen & Co. report.

  The final report of Arthur Andersen & Co. was forwarded to the ASC on 24 May 1994.

  The ASC has now reviewed that report and has commenced its own enquiries.

  The carrying out of enquiries by the ASC is a matter within the independent authority of the ASC under the ASC Act.

  The Attorney-General has no power to give directions to the ASC in relation to a particular case. Additionally, it would be inappropriate to comment upon the course of these enquiries while they remain current.

  I am advised that the ASC and ATSIC put liaison arrangements in place in November 1993 to deal with complaints raised by ATSIC relating to the affairs of Aboriginal owned and controlled companies.