Philip Ruddock (Berowra, Liberal Party) Share this | Hansard source

No, I don't. I do listen. But it is also important that they support measures of this sort that will help boost our economic competitiveness. This bill is about reducing business compliance costs by something of the order of $14 million per year. It contains measures to improve the efficiency of those processes which companies have to meet. They will better balance the rights of shareholders to raise issues with the company and the costs of companies being required to call and hold general meetings. It will improve the remuneration reporting requirements. It will clarify the circumstances in which a financial year may be less than 12 months. It will exempt certain companies limited by guarantee from the need to appoint or retain an auditor. It will improve the operation of the Takeovers Panel. It will extend the Remuneration Tribunal's remuneration setting responsibility to include certain statutory bodies.

If I can go to some of those particular measures, there is the abolition of the 100-member rule. The government is removing the requirement for directors of a company to hold a general meeting on the request of 100 shareholders. It seeks to strike a better balance between the interests of minority shareholders and the shareholders as a whole, because all of these meetings involve costs which can be quite significant. In large corporations the 100-member rule allows groups holding less than what we can call one per cent of voting shares to force a company to incur significant costs in holding meetings. That has to be questioned. This particular issue is supported by both industry stakeholders, including the Institute of Company Directors, the Governance Institute of Australia and the Business Council of Australia, as well as shareholder groups such as the Australian Shareholders Association. The measure is expected to save businesses around $1.5 million per annum in compliance costs. Isn't that a desirable outcome?

In relation to remuneration reporting, the government is improving the disclosure of executive remuneration information in Australia by ensuring that it is provided in a form that is useful to shareholders and investors. The measure removes the requirement for unlisted disclosing entities to prepare a remuneration report. This measure is estimated to save unlisted entities from disclosing about $8.5 million in compliance costs. The remuneration report is simply not relevant to those agencies, but it is a regime that imposes very significant and unnecessary costs.

In issues relating to auditor-appointing requirements, the government is removing the nonsensical requirement for certain companies limited by guarantee, which are not required to undertake an audit, to appoint an auditor—that is, you are not required to audit, but you have to appoint an auditor. How ridiculous! Currently all public companies are required to appoint an auditor, even if they are not required to conduct a full audit of their financial reports. This unnecessary regulatory burden imposes $4 million of compliance costs on business. This change is expected to predominantly benefit companies that have a not-for-profit focus.

You can see, Mr Deputy Speaker, why this legislation is of fundamental importance in addressing issues that do go to the costs of running businesses in Australia. Inevitably, it will help in small measure to improve their international competitiveness. We ought not through our regulatory regimes impose costs on businesses in Australia that are quite unrelated to the costs others abroad may face, because that is essentially imposing upon them and their employees a penalty in terms of their competitiveness. This legislation is an important deregulatory package; it is part of a continuing process in which this government is involved. As I said, I commend the member for Kooyong, who has had the responsibility for progressing these issues, for his determination in identifying measures that can effectively reduce compliance costs and that will ensure a far more competitive environment without reducing proper responsibility. This measure deserves support, and I hope that the opposition will have some regard to my earlier observations about the importance of ensuring that we not only live within our means, but also put in place a more productive economy through the sorts of measures that are contained in this legislation.

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