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Wednesday, 9 May 2012
Page: 2884


Senator CORMANN (Western Australia) (10:35): So the bill is now on, is it?

Senator Jacinta Collins: Yes, Senator.

Senator CORMANN: The bill is now on! So here we go. This is a government that is in outrageous shambles. This is a government that is weak, that is incompetent, that is dysfunctional, that is divided, that could not run a—

Senator Fierravanti-Wells: A chook raffle!

Senator CORMANN: They could not run a chook raffle. I was going to say something else there, Mr Deputy President, but I would not have wanted to be unparliamentary.

We are dealing here, of course, with the Corporations Amendment (Phoenixing and Other Measures) Bill 2012—a very serious issue. Phoenixing activity is something that the coalition is very concerned about. It is activity which is typically associated with directors who transfer the assets of an indebted company into a new company, of which they are also directors, effectively in order to avoid paying debts that they are required to pay.

The government has previously attempted to address this, and again and again, parliamentary committee after parliamentary committee has pointed out the deep flaws in the government's approach, has sent the government back to the drawing board, has told the government: 'The way you are trying to go about it is not fixing the problem; the way you are trying to go about it is going to capture all of the companies across Australia rather than just targeting companies that are actually engaged in fraudulent phoenixing activity.' And here we have a report before us, which I have not actually been able to officially see yet—which nobody in the Senate other than members of the committee have been able to officially review yet. I am led to believe that there are some recommendations in the report on this bill, from government members, on how this legislation needs to be improved and needs to be amended, yet the Senate has not been given an opportunity to even consider the report that Senator Polley, on behalf of the Chair of the Senate Economics Legislation Committee, has just tabled.

So this is a government that is in disarray. This is a government that has to continue to chop and change with the program because it does not have a clue what it is doing. This is a government that can never follow proper process. This is a government that always gets itself into trouble because it would not know what proper process was if it fell over it. People across Australia are sick and tired of this government. They know that this is the worst and most incompetent government in the history of Federation. They know that it is a weak, incompetent, divided and dysfunctional government. The chopping and changing with the program here in the Senate today is just another reflection of the deep division and dysfunction in this government.

We in the Senate are now being asked to make a judgment on this legislation without having the benefit of being able to properly assess and review the report of a committee that was charged by the Senate to review the merits or otherwise of the legislation. Quite frankly, that is not good enough. There is a proper process to be followed here. When the Senate asks one of its committees to review the merits or otherwise of a piece of proposed legislation then all senators from across the chamber should have the opportunity to properly review its findings, to make judgments on whether or not they might want to change a previously held position.

As I have said, the coalition are strongly opposed to fraudulent phoenixing activity, and we support all appropriate measures to stamp out this practice. The problem is that this government's approach does not do that. This government's approach does not actually do anything to fix fraudulent phoenixing activity—in fact, this government, in this legislation, has not even defined what phoenixing activity is! This is a piece of legislation that gives a blanket increase in powers to ASIC, which will impose all sorts of additional burdens and risks on companies across the board and which, despite repeated attempts to achieve some improvements to the government's approach, has not been improved in any way, shape or form.

We have to remember that last year the government included a series of different measures, supposedly to target aspects of phoenixing activity in the Tax Laws Amendment (2011 Measures No. 8) Bill and the Pay As You Go Withholding Non-compliance Tax Bill 2011. After these particular bills were examined by the House of Representatives Economics Committee, that committee made a unanimous and bipartisan recommendation that the govern­ment not proceed with those provisions. The House Economics Committee made a unanimous finding that the government got it wrong, that the government's approach was incompetent—that it was not right, that it was not going to achieve what the government said it wanted to achieve. This is the House Economics Committee, because the only committee report that I can rely on as a senator in relation to the government's approach to phoenixing activity is the House Economics Committee inquiry report, related to a different bill! I have not had the benefit of being able to review the Senate Economics Legislation Committee inquiry report into this bill—which is a completely outrageous change in process, and mismanagement of process, which of course we have come to get used to from this bad and terrible Labor government. In its report the House Economics Committee:

notes concerns from the business community and its representatives that the Bills potentially apply to the broad range of directors whether engaged in phoenix activity or not. The committee recommends that the Government should investigate whether it is possible to tighten the provisions of the Bills to better target phoenix activity.

That was the assessment of a committee that included government members. Given that it had Labor members on the committee that came up with that sort of assessment, that is as damning as you are going to get from a Labor member of parliament in relation to their own government. As I say, go back to the drawing board, you have not got it right. You have come up with a piece of legislation that is targeting all company directors and all companies. You are telling us you are trying to fix phoenixing activity but in fact you are coming in with this grab-all of red tape, of additional powers for ASIC that is going to have implications for company directors across the board. Go back to the drawing board is what Labor members of the House Economics Committee said.

I gather that Labor senators on the Senate Economics Committee inquiry equally had concerns about the government's approach to this legislation. But I would not know because I have not been able to review what government senators of the Senate committee actually thought in relation to this particular piece of legislation.

Senator Marshall interjecting

Senator CORMANN: Senator Marshall, it has only just been tabled. I was asked to make this speech on the second reading on behalf of the coalition within two seconds of Senator Polley having tabled the Senate Economics Legislation Committee report, which was due for tabling later this afternoon. This chopping and changing by this government is just another sign of a government in disarray. It is another sign of a government that has lost the plot. It is another sign of a deeply divided, weak and incompetent government where nobody knows who is in charge anymore, nobody knows who is doing what. This is a government that is all over the place. I say to the people of Australia, 'You are right, this is a government that should be up for the chop.' This is a government that should face an election sooner rather than later, because they are in their dying days. The level of incompetence that is now on display here today, the level of dysfunction, the level of absolute incompetence and disarray that is yet again on display here today in the Senate just shows to anyone who did not already know that this is a government that deserve to be kicked out at the next election and the sooner the better.

After the damning assessment of the government's previous attempt to introduce measures to arrest phoenixing activities when Labor members of the House Economics Committee told the government to go back to the drawing board, the government did exactly that. The government withdrew the provisions in relation to phoenixing from the Tax Laws Amendment (2011 Measures No. 8) Bill because clearly on reflection they conceded that those provisions did not actually appropriately target phoenixing activity. So here we have this latest foray, and pardon for being suspicious, pardon for suspecting that this incompetent government wants to avoid scrutiny by the Senate. What have the government got to hide? Why are the government tabling a report that is supposed to advise senators on the merits or otherwise of the government's approach on phoenixing and then trying to ram this legislation through within two seconds of having tabled the report, before anyone has got a proper chance to consider the findings and recommendations in that report? It might well be that on reading the coalition senators' dissenting report and considering the recommendations that we have made on how this legislation could be improved, Senator Siewert might be of the view that the coalition perspective on this is quite reasonable and quite legitimate. It could well lead to a change of position by the Greens or otherwise. But this arrogant, contemptuous government come into this chamber and want to rush through a piece of legislation that they clearly believe has got some flaws in it because if they were confident that this piece of legislation would stand the scrutiny of the Senate they would not ask the Senate to pass judgment on it before we have been able to properly consider the report that was tabled only a little while ago.

I understand that this arrogant government and this arrogant minister do not take seriously the role and responsibility of the Senate to scrutinise the activities of executive government. This minister does not care much about the proper democratic processes. This minister knows that proper scrutiny by the Senate is a bit of a nuisance when you have got a bad and incompetent government like the current one, coming in with one bad piece of legislation after the other. This is a minister who knows that he is part of a bad, incompetent government and part of a divided, deeply dysfunctional government. He of course knows that the reason the Senate is being messed around like this today is that his government cannot organise the processes properly. This should be of serious concern to any of the reasonable and mature people on the Labor side, but nobody is here to stand up and take a stand against what is being asked of the Senate today.

As I have mentioned, the coalition are strongly opposed to fraudulent phoenix activity and we support all appropriate measures to stamp out this process. We recognise that phoenix activity can cause significant harm to workers and small business people who are denied their legitimate entitlements. If left unchecked, it can erode the reputation of Australia's strong business community and reduce confidence in our world-class corporate regulatory framework. However, we are concerned that the government's approach to this important public policy matter is confused, ad hoc, piecemeal and not appropriately targeted.

The Corporations Amendment (Phoenixing and Other Measures) Bill 2012 is meant to enhance the ability of ASIC to combat phoenix activity. The bill gives ASIC significant new discretionary powers to place a company into liquidation. These powers can be used in a wide range of circum­stances. The bill also alters the publication requirements of corporate insolvency notices to allow for publication on a single ASIC administered website. Finally, the bill establishes a duty for receivers, adminis­trators and liquidators to notify the secretary of FaHCSIA upon their appointment to a company that is a paid parental leave employer.

Look at this. The attendants in the Senate are very helpful. We of course had to ask for this document. As I am on my feet speaking on this legislation, being asked to pass judgment on this legislation on behalf of the coalition, I am being handed a copy of the still warm report. It is a photocopy; it is not even a properly printed copy. I bet that the Senate printers were not even ready to have it properly printed. I am being handed a copy of this report as we are standing here debating this legislation. This is outrageous. This government every day is going from bad to worse. Whenever people across Australia think that it cannot get any worse it does, and we are continuing down this slippery slide to the next election, which no doubt will result in a pretty firm judgment by the Australian people.

This is a report that includes recom­mendations by the government as well. Government senators on this committee are unhappy with this legislation. Government members of this committee are recom­mending that the government review proposed subsection 489EA(6). I am sure that Senator Siewert and Senator Marshall—Senator Marshall, are you on Economics Committee?

Senator Marshall: I am a participating member like you are.

The ACTING DEPUTY PRESIDENT ( Senator Cameron ): Senator Cormann, address your comments through the chair.

Senator CORMANN: I accept that admonishment, Mr Acting Deputy President. Here we have got three recommendations from the government senators on this committee to change this piece of legislation. So even government senators do not think that this legislation is up to scratch. Even government senators think that this legislation needs further change.

This incompetent, dysfunctional, weak and divided government, which is treating this Senate chamber with absolute contempt, wants all senators to consider this legislation, this set of proposals, without having had the benefit of properly considering both the recommendations by government senators and the recommendations that were made in the very good dissenting report by coalition senators. I suspect that this will be the first time that Senator Marshall will be able to read the coalition senators' dissenting report, because it is not usual practice that government senators are provided with a copy of dissenting reports before they are tabled. There are some very good recommendations in the coalition senators' dissenting report. The first is:

That the Senate oppose this Bill.

The second is:

That the government undertakes a comprehensive and co-ordinated legislative approach to combating fraudulent phoenix activity that includes an appropriate definition of 'fraudulent phoenix activity'.

It might well have been that the eloquent words of Senator Bushby, who is the Deputy Chair of the Senate Economics Legislation Committee, might have persuaded Senator Marshall to change his mind, or, if not Senator Marshall, perhaps Senator Siewert. Who knows? The point is that the reason we do these reports, the reason we have these inquiries into legislation, is so that the Senate has a proper opportunity to assess the legislation based on the judgment that was made by one of its committees.

Recommendation 3 by coalition senators is:

That regulators including ASIC ensure that they fully utilise existing legislative and regulatory powers to combat fraudulent phoenix activity.

One thing that became very clear during the inquiry, as I understand it, is that ASIC actually already have a lot of powers that at present they are not utilising, either because they have not got the resources or because they are not appropriately prioritising those activities. They have already got a lot of powers that they could use to better target fraudulent phoenix activity. Forever increasing regulatory powers, forever increasing red tape, does not do anything to fix the problem any better. If you have got an organisation that is not utilising its powers now, either because it has not got the resources or because it has not got the appropriate prioritised agenda, that organisation will not do anything just because the government, with the flick of a pen, increases its powers and increases red tape.

Recommendation 4 from the coalition senators' part of the report is:

That any proposed broad new powers for regulators such as ASIC that would apply to corporations and directors that are not engaged in fraudulent phoenix activity be subject to proper public scrutiny and debate rather than be bundled into legislation that is supposed to apply to only one discrete policy area.

I could not have said it better myself. What a sensible recommendation by the coalition members on the Senate Economics Legislation Committee. But, of course, senators across the chamber will not have had the opportunity to properly consider the findings and recommendations that were made by coalition senators, because nobody in this chamber has actually had an opportunity to review the coalition senators' dissenting report and recommendations.

I finish where I started. This is a serious policy issue. This is an issue that the coalition actually wants to see properly addressed. This legislation does not do that. For the government now to come in in another fit of incompetence, to abort proper process and to force the Senate to deal with this legislation without actually having had an opportunity to consider a report that was put together, at its request, by a committee of the Senate is just completely outrageous and inappropriate. It is just another demon­stration of an arrogant, incompetent govern­ment on its last legs, a government which clearly does not know where it is going these days, a government that is so focused on itself that it does not know how to focus on the public interest anymore. This is a government that is so weak, so incompetent, so divided, so deeply dysfunctional. It is time for this government to go. It is time for this government to face the Australian people so that the Australian people can pass judgment on this terrible and ongoing Labor Party incompetence.