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Wednesday, 26 November 2008
Page: 11565

Mr PEARCE (6:19 PM) —I move:

Schedule 3, page 6 (line 2) to page 12 (line 6), omit the schedule.

The opposition is moving an amendment to the Corporations Amendment (Short Selling) Bill 2008 to amend schedule 3 of the bill. We are doing that because we do not believe, and nor do by far the vast majority of Australia’s financial services stakeholders, that schedule 3 is an appropriate schedule to be in this bill as it currently stands. I have indicated in my speech in the second reading debate that the opposition supports the government in relation to schedule 1 and schedule 2 of the bill. The issues that surround schedule 3 go to certainty, clarity and substance for the market. Despite what the minister just articulated in his remarks, it is the industry and various other stakeholders that have an issue with the government’s bill, in addition to the opposition of course.

I think it is interesting to reflect on some of the comments that were presented as evidence in the inquiry of the Senate Standing Committee on Economics. I have to say that, regrettably, this was a very rushed inquiry and unfortunately, outside of ASIC and the ASX, only two other organisations were granted permission to appear before the inquiry, despite the requests of many organisations. They were not given the opportunity to appear before the Senate Standing Committee on Economics. The representative from IFSA, Mr O’Reilly said:

Regulations are essentially there to fill in some of the detail and put flesh on a skeleton. The law itself should have the fundamental and basic requirements and give direction on what should be in regulations. Obviously, the House has the ability to change legislation, whereas when it comes to regulations, unfortunately, they are presented to the House and can be disallowed in whole but cannot be amended, which cuts down the level of debate on appropriate provisions which could be in the regulations.

He continued:

Certainly our preferred position is that a disclosure regime for short selling is a fundamental and very important structure for our industry and those features should be in the legislation, not in the regulations.

That is a quote from a senior representative of one of the most senior organisations of Australia’s financial services. I think that goes to the heart of the issue. What is an interesting question—and I would be very interested in the minister’s response—is: why is it that the government has not been able to put the necessary detail into the bill? The government released an exposure draft of the bill back in September and yet, in their own explanatory memorandum, they acknowledge that the details are not in the bill and therefore cannot be costed in the regulation impact statement. The EM says that the details regarding implementation and the like are yet to come by way of regulation. It is an important question and I will be interested in the minister’s response. Why is it that after several months the government has been unable to incorporate into the legislation any of the detail that our financial services stakeholders in Australia need and require in order to have the certainty and the clarification so that they can go through with implementation? There has been consultation over a long period of time and yet there is no substance in the bill.

The bill outlines a skeleton or, if you like, a shell legislative framework. The opposition absolutely supports greater disclosure and transparency, but schedule 3 in this bill will not achieve that. It does not achieve it. The problem that we have and the reason why we feel obliged to highlight this to the parliament is that the work has not been done or, if it has been done, it certainly has not been incorporated into the schedule. That leads us to having this level of concern and to sharing the level of concern that the broader industry has. (Time expired)