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Tuesday, 8 March 2005
Page: 128

Senator Webber asked the Minister representing the Treasurer, upon notice, on 18 November 2004:

(1)   When will legislation be introduced that will allow for workers to be paid their entitlements ahead of banks and other creditors.

(2)   Will that legislation apply to any current liquidations.

(3)   In the case of Computerised Holdings Pty Ltd, did the liquidator identify the cause of liquidation as being insolvent trading; if so, why did the Australian Securities and Investment Commission not prosecute.

(5)   What are the criteria being used for making claims against the liquidator in the case of Computerised Holdings.

(6)   Is it intended that legal advice be sought on any distribution of assets ahead of the payment of workers’ entitlements.

Senator Minchin (Minister for Finance and Administration) —The Treasurer has provided the following answer to the honourable senator’s question:

(1)   The Government has undertaken consultations with peak industry bodies representing employers, employees, banks and other finance providers about its proposal to allow secured assets to be used to pay employee entitlements before the holder of the security.

The Government is analysing the results of these consultations and any possible adverse         impacts of the proposal on stakeholder groups, particularly small business. This analysis includes consideration of the findings of the Parliamentary Joint Committee on Corporations and Financial Services in relation to employee entitlements, set out in their report, Corporate Insolvency Laws: a Stocktake, tabled on 30 June 2004.

(2)   See answer to question 1.

(3)   The Australian Securities and Investments Commission (ASIC) has previously advised that the liquidator attributed the failure of the company to a serious absence of equity or working capital with the result that the company was unable to endure short-term losses. Insolvent trading was not identified as the cause for the liquidation.

(5)   ASIC has previously advised that there was one complaint against the liquidator which concerned the conduct of the administration. After consideration of the complaint and the issues involved, ASIC concluded that there was no substantive evidence to support the complaint being referred to the Companies Auditors and Liquidators Disciplinary Board (CALDB).

(6)   .  No.