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Tuesday, 20 October 1970

Mr CREAN (Melbourne Ports) - I want to speak for a few minutes on this measure, which is a technical one. It provides for an alteration to the Seat of Government (Administration) Act, 1910-1959. I refer in particular to section 12 which reads at present:

The Governor-General may make Ordinances having force of law in the Territory.

The Bill before the House proposes to omit the words 'having force of law in the Territory' and to replace them by the words 'for the peace, order and good government of the Territory'. I must confess that, as a layman, I am somewhat intrigued that these latter words are apparently regarded as having wider amplitude than the existing words. I would have thought that, in this society of ours, which claims to believe in law and order, if something had the force of law it ought to operate in the direction of promoting peace, order and good government. But apparently that is not what the lawyers think.

The reason for the proposed amendment is that, as we know, the Attorneys-General of the various States have been meeting and consulting about the reform of company law. The Company Law Advisory Committee reported to the Standing Committee of Commonwealth and State AttorneysGeneral. This report, known as the Eggleston Committee's report, contains a number of solid documents. There are now four of them. The second of these interim reports was, oddly enough, the first one to be presented. The Minister for Primary Industry (Mr Anthony) in introducing this measure referred to paragraph 6 of the second interim report. Paragraph 6 reads in part:

If, however, the legislation were so worded that ti could be read as subject to a territorial limitation, so that a beneficial owner outside the jurisdiction of a State or Territory could claim that the obligation to give notice of substantial holding did not apply to him. such persons would be able to gain control of companies by stealth in circumstances in which residents could not.

As we know, there are a number of companies in Australia that register in Canberra because they believe that there are certain advantages attached to registration in Canberra rather than to registration in, say, Melbourne or Sydney or one of the other places in Australia where company registration may take place. It seems as though in some respects - I made reference to this fact some time ago in a question that I asked - that the shelter of registration in Canberra can be used even though a company that is registered in Canberra actually carries out its main activities in Melbourne or Sydney.

I believe that, in many respects, not sufficient scrutiny is placed upon the operations of these companies. Although they are registered in Canberra, their operations take place somewhere else and they are well beyond the scrutiny of the registration system in Canberra. Now, I believe that this sort of thing can lead to considerable difficulties in the future. It is on this rather peculiar measure that we have one of the rare opportunities to talk in this House about laws that ultimately are passed by States but are passed by the States by reason of the Commonwealth making sensible arrangements for the Attorneys-General and others to get together. I believe that we ought to be able to debate in this House the full substance of the recommendations of the Eggleston Committee. I do not intend to do that tonight.

I merely point out this rather curious gap in our structures, that is, that we can have a pattern of uniform legislation - and what it means is that each of the States passes similar legislation in a broad field; in this case, companies - but even though there are ordinances which apply as far as Canberra is concerned and those ordinances are just as substantia] in many cases as an Act of Parliament would be at the State level, no opportunity is given to this Parliament to discuss the subject mutter of those ordinances. I believe in a sense that what we are talking about here, primarily the seat of Government, is the sort of technicality by which we can discuss this matter.

What we are aiming to do is to close a gap in the legislation. I am thankful that the gap is being closed in a field that really is of national significance. I believe that, because it is of such national significance, more adequate opportunities should be available to debate in this House the merits of the proposal. After all, what can be more significant for the economic life of a community than the law that relates to corporations or to companies. Yet, basically, while we collect taxes from the companies at this level we virtually have no participation in the legislation under which those companies operate. Even though some of them do register in Canberra, we have no Commonwealth corporation law. What we have is a series of ordinances for which this Parliament is responsible and which ultimately this Parliament may disallow but which rarely are debated in substance in this House. 1 hope that the Minister for the Interior (Mr Nixon) may take note df this little gripe that I am making because I think that it is of some significance.

In this field of insurance- that is, insurance other than the life field and in particular insurance relating to motor car activities - a need exists for national legislation. The Commonwealth has wide enough powers under its insurance powers as «et down in the Commonwealth Constitution. I believe that the time is now when we should be passing legislation to exercise control in this field in the same way as the Commonwealth has control through its Insurance Commission or who, at least, can scrutinise the activities anywhere in Australia of anything that calls itself a life assurance company. But the Commonwealth cannot do this at the moment in that field that is known as general insurance.

I do not know whether honourable members know but, in aggregate, there is as much money provided by the Australian public for premiums in the general field ot insurance each year - that is insurance other than life, such as fire, accident, motor car, marine, underwriting and so on - as is spent annually on defence by Australia. The aggregate premiums paid for insurance in other than the life field are $ 1,000m in value. At the moment, they are subject to very, very haphazard regulatory control.

I would hope that this very important gap is closed soon because enough examples are available of the haphazardness in insurance operations which now amount to scandals. I believe that the time is right for comprehensive insurance in this field. I do not think that the legislation needs to be very complicated either. The Commonwealth should set up a mechanism similar to that of the Insurance Commission. Some similar sort of scrutiny should be established in insurance fields other than life insurance. 1 at least support this measure. But, as a layman, as I have said, I am a little bit intrigued by the words which are acceptable apparently in one sense but are noi wide enough in another. I do not profess as a non-lawyer to know how the lawyers arrive at these very fine distinctions. But the Opposition does support the measure and the sorts of things that are done to close up deficiencies in takeovers and nominee shareholdings. I think that they need to be uniform: they need to be strengthened; and this legislation at least will assist as far as companies registered in Canberra are concerned.

Question resolved in the affirmative.

Bill read a second time.

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