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Thursday, 27 March 1980
Page: 1126


Senator DURACK (Western AustraliaAttorneyGeneral) - I am pleased that the Opposition and the Senate as a whole support the Bankruptcy Amendment Bill 1 980. Senator Chipp spoke on it the other night. He supported it, despite the fact that he referred to some amendments he had wanted to make. He indicated that he did not intend to press them in the Committee stage as he had discussed them with officers of the Department of Business and Consumer Affairs. He felt that by mentioning them in that way he had made his point. This Bill is the result of work by officers of the department responsible for the administration of the Bankruptcy Act. It is many years since this Act was first introduced and passed by this Parliament. Over the years problems emerge and improvements are seen to be necessary. I believe this legislation is a very good example of how problems, particularly in a technical area such as bankruptcy, can be handled within the ordinary Public Service structure.

Contrary to the impression that many people in our community seem to have today, the Government and the Public Service keep legislation under constant review. They are alert to and capable of considering and proposing amendments arising out of legislation. It is all very well to have royal commissions, law reform commissions -


Senator Tate - Senate committees.


Senator DURACK - Senate committees, or whatever. They all do very useful jobs. The problem of keeping the law under constant review, keeping it up to date, substantially falls upon the government of the day and the Public Service which handles the continuing administration of the nation. This exercise is a very good example of the work that has been done and can be done. As I have said, the bankruptcy area is pretty technical. In many ways the amendments that are brought before the Senate in this Bill are very technical. Certainly they are quite voluminous but, I believe, very useful and important. I do not believe it is a fair criticism of the Bankruptcy Act to say that it did not do this or did not do that. That is a fault with the second limb of the amendment that has been proposed by the Opposition. Although it is not opposing the Bill, it has proposed some additions to the motion for the second reading of the Bill. The second part of the amendment states that the legislation:

.   . does not provide for full reform of the bankruptcy law, particularly in the area of assignments, arrangements and compositions under Part X of the Act;

The department that has produced this legislation has this area of the law under review. The department will be giving further and more detailed consideration to whether there ought to be a re-examination of the philosophy of Part X and what amendments should be made to it. I assure the Senate that that is an area which will not be ignored or neglected. The first limb of the amendment expresses concern at the rapid increase in the number of petitions for bankruptcy in recent years. I do not think I need to say much about that. Senator Lewis, I think, in the second reading debate referred to the many and various causes of bankruptcy. These days bankruptcy does not have the stigma it has had. One of the provisions of this legislation tries to meet the social problem and to resolve the conflict between the interests of creditors and the social and very human problems faced by the debtor. That is the basis for reducing the period after which there will be an automatic discharge of the debtor from bankruptcy.

I will also deal with the third point of the amendment which expresses the view that a broad reference on the question of insolvency in bankruptcy should be made to the Australian Law Reform Commission. I do not reject that proposal out of hand but the Government is not propared to accept it at this stage. I have some doubts whether the Law Reform Commission is the most appropriate body to deal with this question. As I said, very sound work has been done in the Department and this Bill is an example of that. I think that that good work can and ought to continue and there may well not be the need for such a broad reference. On the other hand, the Law Reform Commission is heavily engaged in a number of major references. I do not think that it would be feasible for the Commission to undertake this reference at this stage.

The question of a broad reference into insolvency raises the question of the insolvency of companies as well as individual debtors and that is an area which would have to be looked at in consideration with the new administration of company laws. For those reasons the Government does not accept the Opposition amendments. We have taken note of some of the ideas expressed by the Opposition. Particular concern was felt on the matter by Senator Tate, who drew attention to the shortage of staff in the Official Receiver's offices and the real delays occurring in the administration of bankrupt estates and even the payment of dividends to creditors as a result of it. I can assure the Senate that the Government is well aware of these problems. One of the major purposes of this Bill is to meet the problem of staff shortages and delays in distribution by trying to reduce the volume of administration that is required under the existing legislation. There are two very practical proposals in this legislation. One is to eliminate the automatic need of a public examination or a meeting of creditors. This does not mean that they will not be required on some occasions. It is not necessary that creditors should as a matter of course be at those meetings in many of the smaller estates does add greatly to administration. Those are some examples and there may well be others where this Bill will cut down the need for administration.

There has been and is at the moment a review of management. There is also a proposal to make better use of automatic data processing facilities to assist in administration of estates. Despite the continuing problem of shortage of staff and other matters I have mentioned, there may well be the need for more staff to be engaged. The question of Government staff ceilings is one which is reviewed each year and it is currently under review. The final decision on staffing is made in the Budget context. All I can say is that the Department is aware of the points that have been made by Senator Tate and it has drawn them to the attention of the body dealing with the staff review. Those points will be taken into consideration when staff ceilings are investigated for the coming year and finally in the Budget context. At this stage I am not able to say definitely whether there will be any increases or, if there are, how many. I will draw Senator Tate's comments to the attention of the Minister. In fact the Department is very conscious of them.

There were quite a number of other matters raised in the debate. I do not think that it is necessary for me to canvass everything that was said. I have mentioned some of the more important matters. I made mention of a matter raised by Senator Evans who asked why the period of three years was adopted as that for which there is an automatic discharge unless there is some application to extend the period. I suppose this is essentially a matter of judgment to reconcile the interests of the creditor, the need to protect his interests and to give some speedy rehabilitation to an honest debtor who has got into trouble and who has been probably punished enough. However, the Government was influenced by the consideration that in some 70 per cent of the estates that it has historically taken two years or more for a trustee to realise the assets and distribute the proceeds. Although I think that the original Bill provided for a two-year period, on consideration and in the light of a number of representations made, the Government felt that perhaps two years was a little too short. On the other hand it wanted to make a significant reduction in the existing period. So, that is how the period of three years was arrived at. I am pleased that the Senate has given its support to this measure. Very useful amendments have been made. I think those amendments will be beneficial and I hope that the Bill will have a speedy passage.

Amendment negatived.

Original question resolved in the affirmative.

Bill read a second time, and reported from committee without amendment or debate; report adopted.







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