Ali France (Dickson, Australian Labor Party) Share this | Hansard source

I rise to speak on the Treasury Laws Amendment (Financial Reporting System Reform) Bill 2026. The government committed to streamlining Australia's financial reporting bodies. The bill delivers on this commitment by creating External Reporting Australia, ERA. ERA will combine the existing standard-setting functions of the Australian Accounting Standards Board, the Auditing and Assurance Standards Board and the Financial Reporting Council, and be responsible for accounting, auditing and assurance, and sustainability standards. At commencement, ERA's responsibilities will include making and formulating accounting, auditing and assurance, and sustainability standards, and providing strategic policy advice and reports to the minister on its functions. Additional functions, including the making of new kinds of standards, can be conferred by ministerial instruments should they be required in the future.

ERA will not have the current function of the ERC of providing advice and reports to the minister and professional accounting bodies in relation to the quality of audits conducted by Australian auditors. This overlaps with those already performed by the Australian Securities and Investments Commission, which has access to compulsory powers and an investigative remit to carry out and report on this work as well as the ability to take enforcement action. As reflected in some feedback received during consultation, without this function, ERA will be better positioned to direct its specialist resources and focus on its primary role of setting standards in its establishment phase.

Transitional provisions provide certainty and continuity between the existing arrangements and the new arrangements. The provisions are designed to ensure that External Reporting Australia can begin operations from the day of the amendments, establishing that the new arrangements take effect and maintaining the validity of any existing standards issued by the existing bodies.

If the bill receives assent before 30 June 2026, a four-month transition period will commence on 30 June 2026, with External Reporting Australia commencing operations on 1 November 2026. The transitional period will provide for sufficient time to transition from the existing to the new arrangements in an orderly way so as to limit disruption.

Integrity in our markets matters because when people trust the system to be fair and honest, they're more willing to invest, innovate and plan for their future. That confidence underpins a strong economy for everyone. The new legislation establishes more adaptable and accountable standard setting through the creation of a new one-stop shop, External Reporting Australia. Our standard setters play a crucial role in supporting the integrity of markets, enhancing investor confidence and ensuring accountability in public sector institutions. The legislation strengthens the existing system by better positioning it to respond to emerging developments both locally and internationally. It provides for the establishment of technical standard-setting boards within ERA, including a dedicated board for developing and maintaining standards for sustainability reporting. Existing standards will continue as standards of ERA until updated or replaced.

The introduction of the bill follows extensive consultation and consideration of feedback. The establishment of ERA has been guided by three key principles: flexibility and removing barriers so that future standard setting so that needs arising in the future can be more easily accommodated; preserving what works and seeking to maintain key benefits of the existing structure; and strengthening accountability by ensuring workable and appropriate governance arrangements are in place, including alignment between responsibility for the body's performance and the capacity to address issues when they arise, while at the same time managing conflicts of interest.

The transitional provisions in the bill will facilitate an orderly process, minimising disruption to the current standard-setting board's ongoing work and providing greater certainty around statutory roles ahead of commencement. This reform helps ensure the governance and structural arrangements of Australia's economic institutions, and that they are best positioned to help build a more competitive, dynamic and productive economy. I commend the bill to the House.

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