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Wednesday, 29 February 2012
Page: 2357

Ms OWENS (Parramatta) (17:56): What an extraordinary contribution! I can only come to the conclusion that the shadow Treasurer is speaking on the wrong bill. This bill, the Corporations Amendment (Phoenixing and Other Measures) Bill 2012, does not go into the issue of penalties for directors. There was another bill before the House of Representatives Standing Committee on Economics last year, which the committee inquired into, which did involve directors penalties. The committee, in its recommendation suggested that those provisions—

Mr Hockey: I didn't say that; you weren't listening!

Ms OWENS: Well, as far as I am concerned, you were talking on the wrong bill—and I would appreciate if I could continue—

The DEPUTY SPEAKER ( Mr S Georganas ): Order! Comments will be directed through the chair.

Ms OWENS: The committee recommended that those sections be removed from that bill at the time and be considered further, which they are being. This particular bill involves other matters, and they are really quite specific and are not the subject of much that the shadow Treasurer was talking about at all. I would suggest to the shadow Treasurer that—even though I cannot in this House, without breaching the privilege of my committee, respond to his allegations about what the committee may or may not have been doing—before he makes any more allegations he might actually like to talk to the members on his committee and find out what actually did happen, because, again, I think he is talking about the wrong bill. But far be it from me to suggest that the shadow Treasurer should actually do some work before he comes into this House and makes such ridiculous statements.

This bill actually involves two very specific changes. The first one gives ASIC additional powers to intervene in cases where the directors have abandoned a company—walked away from a company, not bothered to wind it up properly but simply walked away and abandoned it. The implications for workers when a company does that are such that the workers are not entitled to access the government's General Employee Entitlements and Redundancy Scheme—commonly known as GEERS, and I will refer to it by its short name from now on to save us all! At the moment an employee would have to go to court and incur legal costs in order to access GEERS. This, of course, is not fair. The Prime Minister, in the election campaign, made a commitment to protecting workers' entitlements, and this is very much a part of that process.

The bill allows the Australian Securities and Investments Commission to wind up a company where it has been abandoned by its directors. Specifically, the bill will provide ASIC with the following discretionary powers: the power to place a company into liquidation in circumstances where ASIC currently has the power to deregister the company; the power to reinstate any deregistered company and immediately place it into liquidation; and the power to place a company into liquidation where ASIC has reason to believe that the company is no longer carrying on its business. If the company has been abandoned, but has not yet been deregistered, employees or ASIC currently have to apply to the courts and incur legal costs in order to place the abandoned company into liquidation before they can access GEERS. In cases where companies have simply been abandoned by their directors, this bill allows employees, through the process of ASIC placing the company into liquidation, to access the GEER Scheme. This is a significant improvement for many, many workers around the country who find themselves, through no fault of their own, unable to access their legitimate entitlements because of the operations of a phoenix company.

The second part of this bill involves the placement of insolvency notices. It implements part of the government's insolvency reform package by facilitating the establishment of a single online insolvency notices website. The Attorney-General and the parliamentary secretary announced the government's insolvency reform package back in December 2011. The package included a proposal to do just this—to require insolvency notices to be posted to a new website to be established as part of the ASIC website from 1 July 2012. The current requirement is that insolvency notices are placed in newspapers and gazettes in a prescribed manner, but forthcoming regulation will require this to be via the ASIC website.

This represents a substantial saving and reduction in administrative burden for creditors and for companies. The establishment of the insolvency website will replace around 53,000 newspaper advertisements over the next four years, making it easier for creditors to access information. The regulations will set a lodging notice on the ASIC website, but the reduction in the number of advertisements is expected to save the industry around $15 million over the next four years. There are, of course, also significant costs to the external administration in complying with the current requirement that the advertisements be placed in newspapers. These costs are ultimately borne by creditors through reduced returns. There are also costs to the creditors in monitoring the numerous newspapers for relevant notifications. So it is a substantial simplification of the current process, a reduction in the administrative burden for people who find themselves dealing with companies that go into liquidation, and a substantial saving in costs. These are both very good reforms. In some ways they are technical reforms, but they are reforms that have substantial outcomes.

I will go back to some of the comments that the shadow Treasurer made. His comments were about phoenixing more generally. Of course this piece of legislation does not deal with the entire phoenixing behaviour. Of course this legislation does not involve all of the changes that need to be made in order to reduce phoenix activity and protect consumers and creditors from that activity. Of course there is other work to be done. It is ridiculous to assume that any particular legislation, particularly a technical bill like this, would be everything.

But—again I make the remark—most of the comments of the shadow Treasurer did not relate to this bill at all. In fact, he had very little to say on this bill. That is a shame because I think, for many workers out there who already have found or will find themselves the victims of phoenix activity, this first amendment that allows ASIC to intervene when a company has been abandoned will be of great benefit to them. I would have expected even the opposition to be in batting for workers who find themselves in those circumstances, so it is a very real shame that the shadow Treasurer has decided to make some political points on a bill that is not even before the House rather than deal with the really important elements in this one. I commend the bill to the House.