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Friday, 6 December 1985
Page: 3141

Senator HAINES(11.30) —The Australian Democrats will not be opposing this piece of legislation, although I would like to take up a comment of Senator Durack about the difficulty in which this Senate finds itself regularly at the end of the session when the House of Representatives is up and we are faced with Bills of one sort or another which may be more or less imperfect and which may benefit from amendments of one sort or another. We are prevented from doing that simply because, if the legislation does not get through, the Bill will not come into force until some months later when the House of Representatives resumes sitting. I can recall us complaining about this under previous governments and I would have thought that any political party which had the nous to get into government also would have the nous to arrange its business in such a way that this kind of mess occurred less regularly instead of more regularly.

The Companies and Securities Legislation (Miscellaneous Amendments) Bill 1985 arises, as has already been said by Senator Durack, from the Commonwealth's obligations under the formal agreement reached by the States and the Commonwealth in 1978-an agreement and arrangement that was implemented under a previous Liberal Government. The agreement provides the framework for a co-operative Commonwealth-States scheme for uniform laws with regard to companies and the securities industry. In accordance with the agreement, this legislation has been agreed to by the ministerial council, which does not appear to have met with a great deal of approval from Senator Durack. Nevertheless, it has been agreed to by the Ministerial Council on Companies and Securities. If it is passed, it will automatically amend corresponding State legislation. I suggest that that was at least part of the reason for both Senator Durack's and my concern about being forced to pass this legislation willy-nilly because it has come before us when the House of Representatives is not in a position to accept any Senate-originating amendments.

The first exposure draft was released, I understand, in June of last year. There was, as usual, some considerable response to the draft that was brought down by the Government; indeed, that is why drafts are brought down. Changes were made as a consequence of those responses and a second draft was issued in June of this year. In addition, I understand that a number of seminars were held at which the legislation was discussed. So to argue that there has been no consultation or very limited consultation falls down in the face of that sort of seminar and draft process.

When this Bill was being debated in the House of Representatives a number of members of the Opposition babbled on, as they have a tendency to do, about how there is too much regulation involved right across the board. They objected to a number of aspects, such as the takeover provisions, the investigative powers granted to the National Companies and Securities Commission, disclosure of the basis on which shares are held and provisions affecting winding up. The complaint about the fact that we as a country are becoming excessively regulated is one that I hear regularly when I talk to and meet with people not only in the business area but also in other areas in the community. The attitude of people to having regulations imposed on them seems to me to be remarkably similar to the attitude of people to tax reform. They have a tendency to get up and say that there are all sorts of problems, but they still want their own particular concessions, protections and so on built into the legislation; it is everyone else who is supposed to be prepared to give ground. It is an unfortunate `protect me only' syndrome that is creeping into the community at all levels which I see as I talk to groups. I hope fervently that it is a very temporary measure indeed, because it is extremely selfish and expensive to the community to the extent that vested interest groups are pushing their own barrow and their own obvious selfish interests to a much greater extent now than ever before.

The Liberals have brought forward a fairly long amendment, which is an attachment to the second reading motion, but, as Senator Durack pointed out, it will not hold up the passage of this legislation. They express a number of concerns in that amendment to which I will come in a moment, but they do not seem to have raised-I would have thought that this was at least as important as some of the things they mentioned in their amendment and some of the things that were raised in debate in another place-the point that it is increasingly recognised across the board that there are problems which need to be solved and that many of these problems flow from unregulated corporate behaviour.

One thing that has concerned many people recently has been the spate of takeover activity, particularly in the retail sector, and the broad economic effects of that. Monopolies are not necessarily a good thing. It does not seem to matter whether they are government monopolies, or monopolies in the private sector. They inevitably limit choice and, inevitably, there is a consequential limiting of cost containment. The consumers, ordinary Australians, and indeed other businesses do not necessarily benefit from that. I know that there is a lot of carry on about the benefits of takeovers. People say that they remove weak management, keep other management on their toes and help the economy by re-allocating resources in ways that will produce long term benefits and so on. But, as I understand it, most of the evidence from overseas refutes those rather wonderful claims for takeovers and indicates that, the benefits that are supposed to accrue from takeovers, willy-nilly, very rarely do.

The Liberals, as I said earlier, were behind the formation of this legislation in 1978. Indeed, Senator Durack has acknowledged that. I would have thought that it was, in fact, a useful way for ongoing review to be conducted in this field. Senator Durack has proposed the establishment of a committee to take over this review role. That may or may not be an adequate substitute. It is something that certainly we will be prepared to look at in the new year.

Senator Durack —I am only suggesting it as an addition, as a way of this Parliament performing its role. I am not substituting the Ministerial Council. I am simply saying that this Parliament should have control.

Senator HAINES —Are we having a review of the Ministerial Council?

Senator Durack —We are the elected persons in this country.

Senator HAINES —That is indeed true. It may, as I said, be a useful alternative or adjunct. I have not seen the fine details of what Senator Durack proposes, but we will, of course, look at it. I just wonder how much larger this place has to become before it can accommodate all the committee structures that everybody is talking about.

Senator Durack —I thought we might have to find something for the 12 extra senators to do.

Senator HAINES —I am sufficiently well worked now not to require work on any additional committees. It seems to us that there is a genuine need for regulations to control some of the more predatory companies around the place and if, inadvertently, people such as those involved in groups organising retirement villages are picked up in this legislation, surely the answer is to do what has been done under this Bill and that is exclude them as not being particularly relevant to the processes of the legislation. But there is an increasing number of predatory companies and, in order to protect the consumer and smaller sections in the business community, there is a need for regulations of the sort encompassed by this legislation. We cannot support the rather exaggerated claims in the rhetoric that makes up the Opposition's second reading attachment. It is a particularly long attachment which begins by expressing its concern at the burden of costs and diversion of resources caused by excessive regulation which, it alleges, constricts Australian business and blunts its competitive edge.

I repeat a comment that I made a little while ago. I wonder what the Opposition thinks the formation of monopolies does. Certainly, there is no competitive edge; there is no competitiveness at all when takeovers increase to the extent that we have, in essence, a series of monopolistic companies doing much as they please, not necessarily to benefit the consumer or other sections of the business community. It seems to me that, as usual, the Opposition has indicated, in at least the first part of its amendment, that its interest lies mainly with big business and that it is prepared to sacrifice the concerns, needs and competitiveness of the small business community in its concern for larger companies. The Opposition then talks about unnecessary complexity and technicality. Again, as I said a moment ago, if there are problems with things like retirement villages they can be excluded rather than wiping the whole legislation simply because a few people are picked up unnecessarily. I would also have thought that if a few members of the business community, particularly the big business community, behaved with greater responsibility, a greater sense of ethics, we would not need this legislation anyway.

The Opposition's amendment states the Opposition's view that the entire legislative package, which is the subject of the amendment, still needs to be examined as a whole with a number of objectives. The objectives do not, in fact, include the whole question of business ethics, which I suggest a number of people regard as a contradiction in terms, particularly when small businesses have been the subject of one of the more vicious takeover bids that are becoming increasingly common. The objectives that the Opposition lists on the second page of its amendment include things like consultation. I would have thought that in the process from June of last year through to December of this year, there would have been some attempt through seminars and drafts by the Government to ensure that a fairly reasonable, indeed adequate, process of outside consultation was engaged in.

I am not quite sure what the Opposition means by its last objective-that is the streamlining of the processes of law making. I am sure that we would all support that, given the shambles that this place occasionally gets itself into but, on the whole, the Opposition's amendment to this legislation sets out, in essence, to provide untrammelled behaviour patterns for big business and to remove the sort of protection that regulations and legislation supply to consumers and vulnerable small groups. It does not provide a great deal of assistance to either the legislative process or economic development through the business community in this country.