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Thursday, 1 March 2007
Page: 6


Mr PEARCE (Parliamentary Secretary to the Treasurer) (9:29 AM) —I move:

That this bill be now read a second time.

Today I introduce a bill which will improve the corporate governance of three statutory authorities in the Treasury portfolio. Those authorities are: the Australian Securities and Investments Commission (ASIC), the Corporations and Markets Advisory Committee (CAMAC) and the Australian Prudential Regulation Authority (APRA).

The bill is part of a broader exercise within the Australian government to improve transparency and consistency in relation to governance arrangements for statutory authorities and office holders.

In June 2003 the government received the Review of the Corporate Governance of Statutory Authorities and Office Holders. This is now generally referred to as the Uhrig review. The Uhrig review identified a number of options for the government to improve consistency and transparency in the relationship between ministers and statutory authorities and office holders.

The Australian government announced its response to the Uhrig review in August 2004.

As part of its response, the Australian government agreed that the Financial Management and Accountability Act 1997, generally known as the FMA Act, should apply to statutory authorities where it is appropriate that they be legally and financially part of the Commonwealth and where they do not need to own assets.

This bill implements this decision in relation to ASIC, CAMAC and APRA.

Under the new framework, the three agencies will hold money and property on behalf of the Commonwealth rather than in their own right. This reflects their status as agencies that are largely budget-funded, in contrast to agencies that raise funds for commercial activities.

The agencies will also have the power to enter into contracts on behalf of the Commonwealth. In addition, ASIC and APRA will retain the power to enter into contracts on their own behalf. However the intention is that this power will only be used for regulatory purposes; for example, in regard to regulatory agreements.

Importantly, the bill will also define the financial reporting requirements of ASIC, CAMAC and APRA under the FMA Act and the responsibilities of the chief executives of the agencies.

It is important to note that the changes I have just described will not adversely affect the operational capabilities nor the independence of the statutory bodies. As noted in the Uhrig review, it is the authority’s legislative framework—and not its financial framework—which establishes the level of operational independence required to exercise its statutory responsibilities in an effective way.

While these reforms may be considered to be minor in nature, I note that they are an important part of a broader effort to improve governance across Commonwealth agencies. Improved consistency and transparency in governance will assist all agencies in delivering important services to the Australian community. This bill therefore delivers on the government’s commitment to increase consistency across public sector regulation wherever possible.

I commend the bill to the House.

Debate (on motion by Ms Plibersek) adjourned.