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Government still fails to act on property investment collapses.



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SENATOR NICK SHERRY

Labor Senator for Tasmania Shadow Minister for Superannuation, Intergenerational Finance: Banking & Financial Services

*** MEDIA RELEASE *** 23 August 2007

Government still fails to act on property investment collapses.

The consultation paper released today by ASIC which aims to improve disclosure for retail investors in the unlisted and unrated debenture market, will be another complexity on top of current disclosure documentation which is unlikely to be read and understood by many investors.

The significance of ASIC’s “if not - why not” plan will prove difficult to interpret by many retail investors and difficult for ASIC to monitor.

It is of great concern ASICs ongoing call for the government to remove the promissory note loophole continues to be ignored.

On page 8 of the discussion paper ASIC states “ASIC has written to the government encouraging them to amend the exemption from the debenture provisions for promissory notes, to raise the threshold exemption above the current level of $50,000”.

Labor has consistently called for the Howard Government to raise the promissory note threshold from $50,000 to $500,000 to improve regulation and yet this has not been acted upon by the government.

It has been more than four years since the then Parliamentary Secretary, Senator Ian Campbell, indicated this loophole would be plugged.

Labor still believes there is a need for a full comprehensive inquiry into the factors leading to these property collapses including the role of ASIC.

Only last week the government blocked Labor's call for a full and comprehensive inquiry to be conducted into all aspects of the collapses of property investment schemes.

Despite five property investment collapses resulting in over 20,000 investors having $1.3 billion in savings at risk the government is yet to make any improvement in investor protection for this sector.

Contact: Senator Nick Sherry 0418 482 807