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Tuesday, 3 February 2009
Page: 115

Senator BERNARDI (6:34 PM) —I rise to indicate the coalition will be supporting the Corporations Amendment (No. 1) Bill 2008 [2009]. This bill prevents persons who were disqualified as company directors in New Zealand from becoming directors in Australia. The bill addresses a loophole in the existing law whereby people can effectively avoid disqualification by simply moving across the Tasman.

The objectives of this bill are in line with the principles espoused in the memorandum of understanding, or MOU, on business law harmonisation between the two countries. The benefits of mutually recognising director disqualification were raised by the former coalition government in 2006. That arose because in 1988 the Australian and New Zealand governments signed an MOU on the harmonisation of business law, thereby providing the starting point for dialogue between our two countries on business law issues. The original MOU has been subject to review every five years, the most recent of which took place in 2006 under the guidance of the then coalition Treasurer, Peter Costello. The 2006 review brought forth a revised agenda. Specific areas of business law such as director law harmonisation were identified, where it was thought that greater coordination would produce mutual benefits. New Zealand closed this regulatory gap by amending their Companies Act 1993 in 2006. The Australian bill is modelled on the New Zealand amendment of that year in order to provide cross-border consistency. This new level of harmonisation between the two nations takes us one step closer to achieving the one single economic market, the benefits of which will provide certainty and enhanced productivity and will assist cross-border entrepreneurship.

The Corporations Act will be amended by this bill to automatically disqualify someone from becoming a company director in Australia if they have been disqualified in New Zealand. The bill will extend the mechanism of Australian courts to disqualify people from becoming company directors where they have been disqualified by the law of a foreign jurisdiction. Only New Zealand will be prescribed at this point but the facility to prescribe other jurisdictions will be established by this amendment. Also, the bill will provide a facility for the Australian Securities and Investments Commission to apply to a court in order to disqualify directors of prescribed jurisdictions.

Consultation with industry reveals that key industry stakeholders are in support of these measures. The Australian Institute of Company Directors has publicly stated its support. The institute explains that these measures will provide a statutory framework which will assist its organisation in work already undertaken to exclude directors. In summary, the coalition will of course be supporting this legislation because it was by our actions in the previous government that this legislation has been brought about. I commend the bill to the Senate.