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Wednesday, 29 April 1987
Page: 2015

Senator PUPLICK(5.55) —The report of the Senate Standing Committee on Constitutional and Legal Affairs entitled `The Role of Parliament in Relation to the National Companies Scheme' provides the opportunity to reflect upon the growing relevance, or I should say the growing irrelevance, of a lot of our assumptions about federalism in Australia when it comes to questions of economic management. There is no doubt that in some areas the principles of federalism and the protection of the rights of the States are matters of very great importance. In particular the rights of the States, where they touch upon the welfare of the people of those States and where it is necessary to maintain the direct link between the electorate and the decisions taken by the State governments, are very important. Nevertheless, in the fields of economic management with which the report deals it is quite apparent that we have passed beyond the stage where a federalist solution is any longer a viable solution for Australia.

Chapter 3 of the report has the sub-heading `Global Market', and it deals with the development of the Australian economy. It deals with the growing maturity of institutions, such as the formation of the Australian stock exchange. It draws attention to the internationalisation of business, particularly in the securities industry, and it makes it quite clear that in fact the regulation of company law in Australia is required to take more and more cognisance of the development of a national economy in Australia and Australia's integration into an international economy. Indeed we see seminars held these days on international trade law and on international securities law, and we know the need for co-operation between national governments in areas regulating international economic activity.

There is no doubt in my mind that the Parliament should now move to enact national companies legislation. That is not to say that there will be no role at all for the States or indeed that the States are not right to be concerned about a number of their operations. For instance, it would be wrong unilaterally to deprive the States of the $50m or so which they gather in terms of the fees imposed for company registration in the individual States. That has been a matter of some very considerable concern to the States. It seems to be that there is no difficulty in protecting a situation where in fact the actual process of the registration of companies can still take place with the State corporate affairs commissions or whatever designated authority each State has, and the States have access to the licence fees and the registration fees which are derived therefrom. I do not believe that we will see the disappearance of the corporate affairs commissions in each State. I believe they will eventually develop into agents for the National Companies and Securities Commission so that people will be able to maintain a fairly close relationship with those organisations in each State. Nevertheless I believe that the legislation which underpins this and the legislation which they are enforcing or operating can be passed by the Commonwealth Parliament after necessary debate and amendment, without the shackles of the existing scheme.

One thing that was of interest to me, which is discussed in paragraphs 3.27 and 3.28 of the report, was the different views that people took about what would happen if a piece of legislation under this scheme came into the Commonwealth Parliament and the Parliament unilaterally amended it. For instance, Mr A. D. Smith, the Western Australian Commissioner for Corporate Affairs, said to the Committee in effect that it would be up to the States themselves to pass legislation denying the validity of the Commonwealth amendment if that had been introduced unilaterally; whereas Mr Leigh Masel, who had been the founding Chairman of the NCSC, took the view that the legislation would be invalid unless the prior consent of the Ministerial Council had been obtained. So here we have a former Chairman of the NCSC and a Corporate Affairs Commissioner in one of the States having a different view about what would be the effect of the law if the Commonwealth Parliament moved to make a unilateral amendment of the legislation.

As the only non-lawyer on the Committee, the one thing that almost frightened me into taking a different position was when the evidence was put before us that said that the previous Attorney-General, Senator Peter Durack, QC, his successor, Senator Gareth Evans, QC, his successor, Mr Lionel Bowen, and his soon to be successor, Mr John Spender, QC, were all in complete agreement on this particular matter. When I looked at the fact that there were four Queen's Counsel of that eminence all at one on the particular matter, I really started to worry. Nevertheless, as Senator Cooney has indicated, the fact that-if he will pardon the friendly expression-a good old hack lawyer like Senator Cooney was also in agreement persuaded me that there must be the necessary degree of common sense and that in fact one could accept that there was some validity in the proposition.

It was also encouraging to see the response given last night on a television program by Mr Terry Sheahan, the Attorney-General in New South Wales and the current Chairman of the Ministerial Council. He said that the New South Wales Government was perfectly happy with this recommendation and the sooner the Commonwealth got on and enacted uniform national companies legislation the better it would be. I think that the prospect does exist of the States being persuaded to agree to co-operate in this process. Senator Georges, as Senator Macklin indicated, claimed by way of interjection that all this was said in 1974. Indeed it was, but I do not believe that it would have been possible-indeed, it was not possible-nor do I think it would have been wise at the time to have moved in 1974 straight into this situation. The experiment-and that is what it has been-of the Ministerial Council allowed many of the problems to be ironed out and much development to have taken place in terms of integrating State legislation. I think it has laid the foundation, the groundwork, for us now moving to a national system of company law which the States would be prepared to accept.

The other thing I want to say about State Attorneys-General is that I was very impressed with the willingness of Mr Kennan, the Attorney-General in Victoria, and Mr Sumner, the Attorney-General in South Australia, to come as witnesses before the Committee and to give us the benefit not only of their State governments' views but also of their personal experience as the responsible State Ministers who have had to make the scheme operate. It is a very great advance for the Senate committee system that senior Ministers of the Crown in the various States are prepared to come before the Committee and participate, in effect, in the Committee's discussions and to participate in the exchange of ideas so that this is not done at arm's length with the State authorities when they are so intimately involved.

I conclude by paying tribute also to Senator Bolkus as Chairman of the Committee. He took over, in the course of the Committee's work on this particular matter, from Senator Tate. This hearing was handled in a very relaxed and expeditious way. It is also necessary to place on record considerable thanks to the staff of the Senate Committee. This was a very difficult research project in some respects, particularly the extent to which the lawyers with the Committee staff were required to get into much economic detail and into much debate on an area perhaps not of their own speciality. Sue Gibb and the other members of the Committee secretariat and research staff did a very powerful job in providing a report which, although fairly brief, is nevertheless succinct. Its recommendation is a short recommendation, probably just about as short a recommendation as one has ever seen in a Senate committee report. It is quite simply that the Commonwealth Parliament should enact comprehensive legislation covering the field currently regulated by the co-operative scheme. I hope that that will be possible and I hope that that recommendation will attract support from all of the parties in the Parliament and can be acted upon as quickly as possible.