David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Hansard source

by leave—I move government amendments (1) and (2) on sheet CA206 and (1) to (5) on sheet CA209:

(1)   Schedule 1, item 2, page 11 (after line 2), at the end of section 44ZZZ, add:

Disclosure if borrower insolvent etc.

(5)   Section 44ZZW does not apply to the disclosure of information between 2 or more corporations (the relevant corporations) if:

  (a)   at least one of the relevant corporations:

     (i)   has provided a loan or credit to another corporation (the borrower); and

     (ii)   has been notified of a borrower insolvency situation (see subsection (6)); and

  (b)   the information relates to services, being loans or credit, supplied, or likely to be supplied, by one or more of the relevant corporations; and

  (c)   the disclosure is for the purpose of one or more of the relevant corporations considering whether to take measures to return the borrower to solvency, or to avoid or reduce the risk of the borrower becoming insolvent.

(6)   For the purpose of subsection (5), a relevant corporation is notified of a borrower insolvency situation if:

  (a)   the corporation is notified that there are reasonable grounds for suspecting that one or more of the following may be or become insolvent:

     (i)   the borrower;

     (ii)   a person who has given a guarantee or indemnity in respect of loans or credit provided to the borrower by one or more of the relevant corporations; and

  (b)   the notification is given by the borrower, or by a person referred to in subparagraph (a)(ii).

(2)   Schedule 1, item 17, page 21 (after line 10), at the end of section 44ZZZ, add:

Disclosure if borrower insolvent etc.

(5)   Section 44ZZW does not apply to the disclosure of information between 2 or more persons (the relevant persons) if:

  (a)   at least one of the relevant persons:

     (i)   has provided a loan or credit to another person (the borrower); and

     (ii)   has been notified of a borrower insolvency situation (see subsection (6)); and

  (b)   the information relates to services, being loans or credit, supplied, or likely to be supplied, by one or more of the relevant persons; and

  (c)   the disclosure is for the purpose of one or more of the relevant persons considering whether to take measures to return the borrower to solvency, or to avoid or reduce the risk of the borrower becoming insolvent.

(6)   For the purpose of subsection (5), a relevant person is notified of a borrower insolvency situation if:

  (a)   the person is notified that there are reasonable grounds for suspecting that one or more of the following may be or become insolvent:

     (i)   the borrower;

     (ii)   a person who has given a guarantee or indemnity in respect of loans or credit provided to the borrower by one or more of the relevant persons; and

  (b)   the notification is given by the borrower, or by a person referred to in subparagraph (a)(ii).

(1)   Schedule 1, item 2, page 4 (after line 3), at the end of section 44ZZT, add:

(3)   The regulations must prescribe a process to be gone through before regulations are made, for the purpose of subsection (1), prescribing a class of goods or services. Before the Governor-General makes regulations, for the purpose of subsection (1), prescribing a class of goods or services, the Minister must be satisfied that the prescribed process has been complied with.

(4)   Subsection (3) does not apply in relation to the first regulations made for the purpose of subsection (1).

(2)   Schedule 1, item 2, page 6 (after line 24), at the end of section 44ZZW (before the note), add:

  ; and (c)   the disclosure is not in the ordinary course of business.

(3)   Schedule 1, item 2, page 10 (after line 29), after subsection 44ZZZ(3), insert:

Disclosure relating to provision of loans etc. to same person

(3A)   Section 44ZZW does not apply to the disclosure of information between 2 or more corporations (the relevant corporations) if:

  (a)   the information relates to services, being loans or credit, supplied, or likely to be supplied, by one or more of the relevant corporations; and

  (b)   2 or more of the relevant corporations are, in relation to the same person (the borrower), doing either or both of the following:

     (i)   providing such services to the borrower;

     (ii)   considering whether to provide such services to the borrower;

  (c)   the disclosure is for the purpose of, or related to, providing services, or considering whether to provide services, to the borrower as mentioned in paragraph (b).

Disclosure between credit provider and provider of credit service

(3B)   Section 44ZZW does not apply to the disclosure of information by a corporation to another person if:

  (a)   either:

     (i)   the corporation is a credit provider, and the other person provides a credit service, within the meaning of the National Consumer Credit Protection Act 2009; or

     (ii)   the corporation provides a credit service, and the other person is a credit provider, within the meaning of that Act; and

  (b)   the disclosure is made in the course of the relationship between the corporation and the other person in their capacities as credit provider and provider of a credit service.

(4)   Schedule 1, item 17, page 16 (after line 36), at the end of section 44ZZW (before the note), add:

  ; and (c)   the disclosure is not in the ordinary course of business.

(5)   Schedule 1, item 17, page 20 (after line 34), after subsection 44ZZZ(3), insert:

Disclosure relating to provision of loans etc. to same person

(3A)   Section 44ZZW does not apply to the disclosure of information between 2 or more persons (the relevant persons) if:

  (a)   the information relates to services, being loans or credit, supplied, or likely to be supplied, by one or more of the relevant persons; and

  (b)   2 or more of the relevant persons are, in relation to the same person (the borrower), doing either or both of the following:

     (i)   providing such services to the borrower;

     (ii)   considering whether to provide such services to the borrower;

  (c)   the disclosure is for the purpose of, or related to, providing services, or considering whether to provide services, to the borrower as mentioned in paragraph (b).

Disclosure between credit provider and provider of credit service

(3B)   Section 44ZZW does not apply to the disclosure of information by a person to another person if:

  (a)   one of the persons is a credit provider, and the other person provides a credit service, within the meaning of the National Consumer Credit Protection Act 2009; and

  (b)   the disclosure is made in the course of the relationship between the persons in their capacities as credit provider and provider of a credit service.

These two sets of amendments will give the banking industry absolute certainty that it can continue to engage in legitimate business conduct without breaching these new prohibitions against anticompetitive price signalling. As I indicated earlier, the govern­ment has consulted extensively with business and has provided a range of explicit exemptions for legitimate conduct. We have also extended the availability of the immun­ity arrangements under the notification and authorisation regime administered by the Australian Competition and Consumer Commission to businesses who wish to make disclosures which fall outside the scope of the exemptions in the bill.

Today's amendments provide a series of further explicit exemptions for legitimate business conduct. The first amendment will provide banks with certainty that certain disclosures made in the context of corporate work-out arrangements will not be subject to the private disclosure of pricing information prohibition. The government recognises that it is important that banks assist financially distressed businesses in avoiding insolvency. These discussions are often commercially sensitive and time critical, and it is vital that we allow banks to support businesses and the jobs of their workers.

The second amendment has four parts. Firstly, it confirms that disclosures made in the ordinary course of business will not be subject to the outright prohibition on the private disclosure of pricing information to competitors. Secondly, a specific exception is provided in relation to syndicated lending arrangements in addition to the joint venture exception already provided. This exception provides lenders with the surety that they need to continue to engage in discussions for the purposes of syndicated loan arrange­ments. Thirdly, an exception for disclosures as part of credit distribution arrangements will provide explicit protection for discussions between banks, mortgage brokers and financial planners. Lastly, we will set out the process which future governments will be required to follow if they are to consider extending the application of the prohibitions beyond the banking sector.

I take the opportunity to thank the member for Dunkley and the coalition for the constructive discussions that we have had that have led to these additional measures. We believe that they maintain the integrity of the provisions that we have brought before the House and strengthen them to ensure that there are sufficient exceptions provided to provide businesses with the certainty that they need but at the same time to ensure that these provisions continue to have full effect.

I table supplementary explanatory memoranda.

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