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Tuesday, 3 April 1984
Page: 1117

Senator GARETH EVANS (Attorney-General)(5.08) —I acknowledge the opening points made by Senator Durack as to the volume and complexity of this companies legislation and the desirability of there being a greater parliamentary involvement in that legislative process. Of course the difficulty about upgrading parliamentary involvement in the way that has been indicated both by Senator Durack and Senator Rae, with a standing committee working over the details of legislation, is that there is a certain incongruity about that kind of process in the context of the present legislative arrangements where the Commonwealth is, as it were, not a free agent but merely the legislative agent of the Ministerial Council for Companies and Securities. It would work only for there to be really significant parliamentary committee type involvement in the process, where either the committee operated in an environment of very long time -lagged exposure drafts, which are not always possible, or alternatively if the committee were to be operating in an environment, as Senator Hill was last year, where he was putting down comments knowing that there was not much chance of their being accommodated in the context of the then current debate but in the hope that they would be accommodated next time around. There may be a role for the committee in that respect but it is difficult in the present co-operative scheme arrangements to have a better committee role than that. It is against that background, with that in mind and not because of any tendentious inclinations on my part--

Senator Peter Baume —Used in its correct sense, of course.

Senator GARETH EVANS —I hardly need to add that it is used in its correct sense. I am not in the habit of using the English language otherwise than in the correct sense. It is in that context that I did float the proposal quite explicitly today for a Senate committee to look at the larger question of the whole future of the co-operative scheme. It is by no means an open and shut question because even if one were determined to go down that particular policy path, very real questions have to be explored about the reach of the Commonwealth's constitutional power and in particular as to whether or not section 51 (XX), the corporations power, will do all the jobs that it is necessary to do in this area to enable an effective national package of companies and securities legislation to be put together. That is just one of the matters that will be very much in issue and which would need to be explored by such a committee. That is the reason for putting the proposal in those terms rather than simply acceding with enormous enthusiasm to the idea of a monitoring or review committee while the present co-operative scheme stays as it is. I do not rule out the idea of such a monitoring or review committee; I just think it would be of limited utility while the co-operative scheme continues to stagger on in the way that it does. Perhaps these are matters that can be further debated by us both privately and publicly in the period ahead.

The more particular matter that Senator Durack raised concerned the effectiveness of the definition of time sharing to confine its operation to what it is manifestly intended to cover, and that is the marketing of time-sharing arrangements in the context essentially of resort accommodation, which is the area in which time-sharing schemes have become most familiar. The criticism is that the definition of time sharing has been expressed so broadly that it might inadvertently catch a variety of investment schemes or activities other than time-sharing activities strictly so called. This is something which the Government will have another look at, as Senator Durack invites us to do, in the period between this debate and that in the House of Representatives to ensure that we really have done the best we can so far as this definition is concerned. We really do believe that it is not likely to catch unintended arrangements of the kind that are here suggested. I noted that even Senator Durack was cautious about embracing the particular proposal-

Senator Durack —I am cautious about all of them.

Senator GARETH EVANS —I appreciate that sometimes the honourable senator is only the mouthpiece of lobby groups and that he cannot be expected to embrace the various positions they put to him with more than token enthusiasm.

Senator Durack —I am only a mouthpiece because of the rush in which this is going forward. I have not had time to think about it; nor have you.

Senator GARETH EVANS —It has been only 10 days and I appreciate the difficulties to which that gives rise.

Senator Durack —It has been only about two hours.

Senator GARETH EVANS —The honourable senator had the Bill, with respect, Tuesday last week and we are now into the second week of the parliamentary period. I deal quickly with a couple of points Senator Durack raised. Common three-year leases with a three-year option are manifestly not the kinds of things that will be covered by this definition. The definition relates to two or more periods during the time of the scheme; that is, shorter periods within the duration of a marketed scheme as a whole. It is certainly difficult to see how a three-year lease which continues for the whole period of three years could possibly be caught by the definition. The other more general point to make not only about that but also about all the other examples that are given-public entertainment, sporting facilities, computer sharing contracts, hotel or permanent accommodation agreements and so on-is that the difficulty about all of these things is that they ignore one of the central elements in the definition of prescribed interest in the parent Act, section 169 of the Australian Companies Code, which makes it clear that what we are talking about here are schemes which are offered to the public, and something which is in the nature of a scheme. We have to have that element of offering to the public before we even get to first base in the context of the application of this definition because this definition is only a supplementary definition to make it clear that the existing rules and definitions of prescribed interests extend to this kind of arrangement . One has to read the definition of time sharing in the context, as I say, of all the prescribed interest provisions.

I do not think it is necessary to say more than that about time sharing other than that the definition will be kept under review. It certainly can be amended if examples come to light of schemes which have been inadvertently caught or alternatively recourse can be had to the exemption provisions in scheme legislation relating to prescribed interests. That is in section 215C of the Companies Act and section 16 of the Companies (Applications of Laws) Acts in each State. I think I have addressed the particular matters as well as the general ones that Senator Durack has raised and I hope that we can now proceed to a vote on the Bill.

Bill agreed to.

Bill reported without amendment; report adopted.