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Thursday, 11 May 1989
Page: 2270

Senator MACKLIN(11.54) —There was no disagreement in the Joint Select Committee's report on the Corporations Bill-apart from the general philosophical issues which were debated during the second reading stage, where there was obviously a division within the Committee-on the technical issues, which are the substance of the report, except with regard to one particular item, and that is the item we are discussing today. As a member of that Committee I signed a minority report, along with Senator Alston, Senator Cooney, Senator McMullan and Mr Kerr from the House of Representatives. Essentially, it reflects a divided view as to how best to have the organisations function.

The Government's original Bill was based on the premise of the division of power between the Commission and the Panel. That, for most of our inquiries, seemed to be a reasonable premise. However, in the dying days of the Committee's inquiry a spirited intervention took place by the Chairman of the National Companies and Securities Commission (NCSC) in defence of the position that he and the Commission had been arguing for some time-that they should be able to retain the power to make declarations of unacceptable conduct.

I had rehearsed those arguments myself for quite some time, and I must admit there is some substance to the propositions on both sides. That is why the Committee divided as it did-not along party lines, but on the basis of the evidence that was presented to us. In the final analysis my position-which is now, I am pleased to say, the position of my Party-on this particular item is that we stay with the minority report which I co-signed. The most compelling reason that I had for this is that I find that the structure proposed by the Government ought to be given a chance to work. I am attracted to the notion of some hiatus between the body which is doing the investigation and the body which makes those types of declarations.

We used the analogy, in the minority report, of a judge and jury. Of course, it is an analogy and it does not quite hold with regard to this matter. In any event, it gives the feeling of a distinct unease that many businesses have that the Commission should have all those powers.

My position was further strengthened by the acceptance by the Government of the notion of having a full time operator as President of the Panel. After all, one has to take very seriously any point concerning practical work put by the NCSC, since it is the only body which actually has any practical experience of the day to day operations of regulations in this country at that level. Taking its point seriously, I think it is met by the notion that the Chair will be available at all times so that there can be rapid intervention and movement along the lines that the Commission indicated was most desirable.

The last point I wish to make with regard to this is that I believe that the ability of the new Australian Securities Commission (ASC), which will take over the role of the NCSC, to make the public generally aware of its activities would be an excessively powerful weapon. I am not at all sure that many companies would relish the thought of being publicly hauled off to the ASC. Hence, I think that the NCSC somewhat understates the power that the new ASC will have of actually sending somebody to the Panel. In many ways that could very well look like the first step towards getting hung. Or, to use a court analogy, to be indicted on a charge of murder would be a pretty drastic first step to come from a magistrate's court. If that happens, one really feels that one is moving into much deeper water. The fact that the Commission is the body referring to the Panel will have a very powerful and salutary effect on business, so business, I am quite sure, will cooperate with the Commission.

We must bear in mind that the power to make unacceptable declarations has been used sparsely, but the fact that such declarations can be made has enabled the Commission to bring together many commercial settlements. That power to refer to the Panel will enable the Commission still to make those commercial settlements. In view of those matters, I believe that the Government's general structure should be given a chance to work and, therefore, I indicate that the Australian Democrats will not be supporting the Opposition's amendments to restructure that organisation.

Senator Hill —Are you saying that this will not inhibit the capacity to make commercial settlements?

Senator MACKLIN —It will not. But, in saying all of that, I should not want to indicate that we do not believe either the advisory committee or the parliamentary committee should look very carefully in the next year or so-or when the Commission is up and running, after a couple of years of its operation-at how this has worked in practice. The only niggling concern at the back of my mind is that the NCSC's practical experience leans in the other direction and that it was upon the basis of that experience that the majority of the Committee finally made their decision. It worries me that we are running counter to that practical experience of the NCSC. Hence I believe it is important that both the advisory council and the parliamentary committee make sure that they look at this issue as a matter of priority and keep it under very close supervision. It may be one of the first items that have to come back on board for discussion. The fact that on this matter the Committee split along non-party lines also indicates that it is a matter upon which people, according to the weight of the evidence, can differ. For that reason also it is important that it be one of the major items kept under close supervision.