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Wednesday, 9 May 2012
Page: 2896


Senator MARSHALL (Victoria) (11:30): I rise to speak in support of the Corporations Amendment (Phoenixing and Other Measures) Bill 2012. It is a pleasure to speak on this bill, as it is great Labor policy. Before I get into the substance of my speech I would like to comment on some of the previous contributions. I want to commend in some respects the contribution just made by Senator Fierravanti-Wells, but unfortunately I think she will probably be dragged into the office of the shadow minister, Senator Cormann, because Senator Fierravanti-Wells's contribution has really made his look very ordinary. It is very clear when you contrast the two contributions that Senator Fierravanti-Wells has actually come to grips with some of the issues and some of the problems that this bill is trying to seek to address. Given Senator Cormann's contribution, one would not even think that he had the most basic understanding of what the actual problem was. So I do feel for you, Senator Fierravanti-Wells. You should not come in outshining the shadow minister in the way you did, and I am sure he will have some very harsh words for you.

It was an extraordinarily ordinary contribution by Senator Cormann, who ran a line about the fact that he did not have access to the committee report prior to it being tabled today. I flicked through the Notice Paper to see whether Senator Cormann is a member of the Senate Economics Legislation Committee, and indeed he is. He is a participating member of the committee. As every senator in this place would know, the committee has to meet and endorse the draft of the report prior to it being circulated. All Senator Cormann had to do was ring up and say, 'I would like to see a copy of that report,' just like every other senator can do and does have to do. But for some reason it is beyond Senator Cormann to have the wit or the nous to actually help himself and ring up, and get a copy of the report so that he could be informed by it.

He then went on to acknowledge that the only part of the report that the committee does not have access to and that government members do not have access to is the opposition's dissenting comments, which of course are kept secret from everybody else—but not the report itself, as everyone knows. I do not really think we can believe very much of what Senator Cormann has to say on this bill. He certainly was not portraying the reality about the existence of the report to the Senate, and I suspect the rest of his contribution was equally as poor.

I also want to pick up on what Senator Fierravanti-Wells said. She very clearly identified the serious nature of this problem and how it has been ongoing. In fact, I like the example that she used, in that, when she was practising in this field as a solicitor in the nineties, a director had gone through the phoenixing of 10 to 12 companies yet was still around. I think that demonstrates that there is a very serious problem.

Senator Fierravanti-Wells's position—reflected also in the dissenting comments in the report—is that we should have a look at what existing powers ASIC has and utilise them before we go into relegislating. If Senator Fierravanti-Wells knows this has been a problem for 20-odd years, ASIC obviously does not have the power to do something about it and they need extra legislative muscle to tackle this problem. Of course, that is why the government are legislating, because we need to give ASIC the powers and the ability to crack down on phoenixing. It simply is not good enough to say, 'We acknowledge that this problem is there and we think it is terrible but we are going to allow it to flourish.' That is what the opposition are saying today. They are going to oppose this legislation. They acknowledge that it is a serious problem that needs to be dealt with, but they are going to oppose it and let this problem flourish.

Senator Fierravanti-Wells at least had one criticism of the legislation, saying that it does not go far enough. If it does not go far enough, that is something the government will have to revisit. But, Senator Fierravanti-Wells, put up some amendments. If you want it to go further, put up some amendments for the government to consider. But let us go as far as we want to go. We think we are going far enough at this point in time. We may have to come back and revisit this in the future if it does not close the loopholes that have been identified, but if you do not think it goes far enough, support how far it does go and put up some amendments to make it go further. We can accommodate that fairly easily; we can at least look at amendments. You would think you would do that. But to simply say, 'We do not think it goes far enough, so we are going to say no' is really just the way this opposition work in this place and of course in the House. Their answer to every problem is to simply do nothing and say no. Whenever the governĀ­ment tries to proactively move to close loopholes, to stop people being ripped off, to stop phoenixing of companies so that people pay their tax and entitlements to working people and to take away this blight from the business community, the opposition say no and frustrate the government. They want to oppose it. There is never any constructive engagement with the government; they simply say no. I do not think it is good enough.

But I am pleased by and do get some confidence from the fact that Senator Fierravanti-Wells at least understands the issue and what is at stake. I just think it is very disappointing that someone who obviously understands it has not had the courage to stand up in the party room and say, 'Actually, this is good stuff and we should be supporting the government and encouraging the government to go further.' But it is obvious to everyone what the stumbling block in the opposition party room is. It is the shadow minister who has not got a clue about this particular issue. It is a bit of an embarrassment, as was his contribution today.

The Labor Party are getting on with the work of implementing the protecting workers' entitlements package and fulfilling our commitment to cracking down on companies that undertake phoenixing behaviour. In our market based economy there is a responsibility of government to represent the public interest. When the private sector writes off carbon pollution, for instance, as an externality, it is the role of government to ensure that the true cost is accounted for. When the private sector fails to provide appropriate infrastructure, it falls to the government to intervene with initiatives such as the National Broadband Network. When there is evidence of widespread sex based discrimination in Australian workplaces, it is the responsibility of government to take action. We have taken action in that regard and I will be tabling a report on legislation that the government are moving in that area later today.

In an ideal world, the government would not be forced to take this kind of action. But, unfortunately and increasingly, we bear witness to shameless, cynical behaviour by elements of our business community. Phoenixing represents a particularly heinous form of corporate cynicism whereby a company enters into a calculated collapse in order to escape its financial obligations to its workers and other creditors. Soon afterwards, these companies are seen to rise from the ashes, much like the mythological bird. The Australian Taxation Office estimates that there are approximately 6,000 phoenix companies in Australia today. This is not a small problem; it is a significant problem. It is well past time that it was addressed and it is well past time that the opposition supported the government in doing this.

The government seeks to address in this bill the complex issue of phoenixing in three separate ways. Firstly, and most significantly, the bill seeks to empower ASIC with the ability to place abandoned businesses into liquidation in appropriate and prescribed circumstances without applying to the courts. Effectively, it seeks to thwart the current practice whereby a business can enter into a state of limbo, neither living nor dead, thus avoiding certain financial obligations. Previously, newly unemployed workers have sometimes been able to gain access to certain outstanding entitlements through the General Employee Entitlements Redundancy Scheme, GEERS. At present, however, it is a precondition that corporations are actually placed into liquidation before their former employees are able to sue for their entitlements through GEERS. Unfortunately, this does not always happen as it should.

Workers who have just lost their incomes and who are often neither financially nor emotionally equipped to do so find themselves faced with the requirement to undertake court action before being able to gain access to the entitlements that they are owed. I think that is an incredibly unfair burden on workers at the moment. They are the ones who are forced to take a company to court to force it into liquidation before they are able to access their entitlements. That is not an appropriate thing for workers to have to do, especially when in nearly every case they have lost their income and do not have any other income at that particular time. It is the role of government through its regulators to force that issue and ensure that that action is taken quickly and efficiently. These actions will represent a significant step towards the realisation of the government's protecting workers' entitlements package.

The bill also seeks to change the reporting requirements of newly insolvent companies. External administration notices will be required to be made available on the ASIC website. This is a sensible and modern approach to an existing outdated and costly system. Senator Thistlethwaite, whose contribution I commend to everybody, went through that process in some detail. Currently businesses are required to publish a notice of their insolvency either in a newspaper or in the ASIC Gazette. This approach does not befit the digital age. It is essentially decentralised and lacking in clarity. The requirement to publish a notice of external administration on the ASIC website will reduce the administrative burden on creditors, who are currently required to monitor numerous newspapers for relevant notifications, particularly as there is no set newspaper or day of the week on which notices must be published. It will make it far easier for all interested parties, including workers, to gain access to this often crucial information.

Furthermore, this measure will result in significant savings to the creditors of companies that enter into external administration. It is estimated that this reform will result in approximately $15 million of savings, some of which will undoubtedly find its way into the pockets of deserving ex-employees.

Finally, this bill will require liquidators to inform FaHCSIA in the event that they are appointed to an employer with Paid Parental Leave responsibilities. This will ensure that FaHCSIA will have the information it needs to determine whether to persist with parental leave payments to the company in question or whether it would be more appropriate to direct those payments to the individual employee. This final amendment forms but a minor part of a suite of reforms that this bill seeks to implement, yet it gives me great pleasure to commend it. Paid parental leave is a triumph of this government and another example of good Labor policy. Australians, particularly Australian women, have long fought for the right to paid parental leave and over 150,000 working parents have so far enjoyed the fruit of that labour. It must be gratifying for these parents to know that the government continues to place great importance on the right to paid parental leave, as this bill shows.

Workers and fair-minded business people must also find it gratifying to see that this government is pressing on with its agenda of reform and is tackling the complex issue of phoenixing—a despicable practice, a sad symptom of corporate greed and a strong argument for continued vigilance by a government that is not afraid to intervene on behalf of Australian workers. I commend this bill to the Senate.