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Thursday, 13 April 1989
Page: 1530

Senator COONEY(12.51) —The speeches so far have pointed out the importance of the report of the Joint Select Committee on Corporations Legislation. I endorse those remarks. I also endorse the thanks that have been given to the staff who prepared the report. In particular I thank Andrew Sneddon, who has worked under extreme pressure and has presented a very good and comprehensive report and a report to be praised. No doubt there may be, as one reads through the report, the odd error, but that would be as a result of the pressure under which he has had to work. There has been some criticism of that pressure. On the other hand, this is legislation that is before the Parliament and has already been through the House of Representatives. It is important from the Government's point of view that it does proceed. I think a proper balance has been struck between the need to get a good and comprehensive report and the need to get the legislation through the chamber.

Senator Alston praises the report in so far as it is a comprehensive analysis of the legislation. He, along with Senator Short and no doubt other members of his Party, criticises the report because he considers that this legislation should not be introduced at all and that the present cooperative scheme is the appropriate way to go, although it ought to be improved. That differs from the report of the Senate Standing Committee on Constitutional and Legal Affairs, which gave rise to this legislation. It was tabled in this Parliament on 28 April 1987 and was entitled The role of Parliament in relation to the national companies scheme. It is proper to refer to that because many of the issues that are now raised were then anticipated. It was recommended unanimously by the Constitutional and Legal Affairs Committee that the Commonwealth Parliament should enact comprehensive legislation covering the field currently regulated by the cooperative scheme. That Committee was made up of people of great force. The Chairman was Senator Nick Bolkus, who is now a Minister of the Crown. May I say that he is a man of outstanding experience in the law and has filled his position as a Minister with great consequence and great distinction. Senator Margaret Reynolds, who is also a Minister, was also on that Committee. Senator Michael Tate, who was the Chairman of that Committee until 25 February 1987, is now a Minister. The members of that Committee from the other side were Senator Robert Hill, Senator Richard Alston and Senator Chris Puplick. If the Opposition ever becomes the Government--

Senator McKiernan —That is very remote.

Senator COONEY —It is very remote, but if that happened, Senator Robert Hill, Senator Richard Alston and Senator Chris Puplick would fill the front bench; they would be Ministers. So this report was produced by people who are either now Ministers or will become Ministers, presupposing the Opposition gets into government. The only other name there was mine. I doubt that I will make the front bench as a member of either this Party or the other one.

Senator McKiernan —You never know.

Senator COONEY —Yes, one never knows. It is said that there is no need for a Commonwealth scheme. The reality is that that report was a unanimous one made by those very outstanding people. They unanimously recommended that the Commonwealth have a comprehensive scheme. Senator Alston said that there was no evidence that that should be the situation. In paragraph 5.1 of this report it is pointed out that:

Mr Halstead, a committee member of the Business Council of Australia and one of the Council's representatives at the Committee's public hearings, summarised the Council's submission as being `that the Commonwealth Government should make a bid for the whole field'.

The report points out that the Australian Merchant Bankers Association also appears to have come to this view. Paragraph 5.2 of the report states:

. . . Mr Bill Beerworth, a member of the executive committee of the Australian Merchant Bankers Association, commented that he had `always had doubts about the co-operative scheme' and that the Association `is on record as preferring national legislation in this area'.

Paragraph 5.3 of the report states:

The Company Directors Association characterised this as the `next step' in a natural progression. According to the Chief Executive of the Confederation of Australian Industry, Mr Darryl George:

The present system of State and Federal cooperation on company regulation has now proven its limitations and should be abolished.

Significantly, paragraph 3.52 of the report of the Standing Committee on Constitutional and Legal Affairs states:

In a statement to the Victorian Legislative Council in 1985, the Victorian Attorney-General, the Hon. J. H. Kennan, MLC-

an outstanding legal mind-

described the co-operative companies and securities scheme as `a unique constitutional creature'. His successor as Chairman of the Ministerial Council, the Hon. T. W. Sheahan, has taken a negative view of the scheme. He described it as a `hybrid institution' which `imposes severe limitations on developing of necessary policies.

That man was Chairman of the Ministerial Council at that time. He said that the scheme was not working well and that we should move to a national scheme run through the Parliament of Australia. That is consistent with the fact that the Australian Stock Exchange has become a national body and that there is international trade in securities. This demands more and more that there be a single body to regulate the exchange of securities in various countries. So, a national scheme has been asked for and given by this Attorney-General (Mr Lionel Bowen). This Attorney is to be praised for his moves in that area.

Time is short and we want to finish as soon as we can. There is one other point. There was a split in the Committee-five all-with the majority being formed by the casting vote of the Chairman, Mr Ron Edwards, who chaired the Committee with great distinction. That split in the Committee took place over the role of the proposed Australian Securities Commission and the panel. It is a fundamental concept in the legislation that there be a separation of functions. There are those which are, according to the minority report of five, to be performed by the Australian Securities Commission, which is an investigative body that collects intelligence, establishes evidence and then produces it. That function is distinct from an adjudicative one, from one where judgments are to be made. The scheme in the legislation presently before us proposes that that adjudicative function be performed by a panel. It is my strong belief that that is how it should remain. As I understood it, that is what the industry wanted. The panel will include people from the industry who can be chosen from a wide pool. It is proper that that is where the decision as to whether there has been unacceptable conduct is made.

It is undesirable in any institution in a democratic society that people who investigate and collect intelligence also be allowed to judge an issue on the basis of the material that they gather. With great respect to the majority-a majority because of the casting vote of the Chairman-I am unable to accept that, even in an industry where it is suggested, often times with insufficient evidence, that there is a need for severe control, that control should be so severe as to run those two functions together. That sort of thing is the basis for the addendum I made on page 191 of the report about the tendency, not only in this sort of legislation but also in legislation generally, to allow citizens of this community to be punished, to have consequences delivered to them, by bodies which seem to run together functions that should not be run together. In other words, it is wrong for bodies that collect evidence or intelligence and investigate matters then to go ahead and make judgments upon that material. The legislation as it presently appears is the correct approach.

Senator Alston talked about Rothwells Ltd and Bell-Bond. He has been vigorous in his pursuit in bringing to the light of day what happened with those companies. That is correct. No doubt the opportunity will come his way. He has spoken of the shield of the Crown and the need to look at it. I agree entirely. I go on record as saying that, were Senator Alston to put forward the suggestion that some committee such as the Constitutional and Legal Affairs Committee look at it, I would support that wholeheartedly.

Debate (on motion by Senator Knowles) adjourned.