Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Would the Treasurer update the House on threats to the corporate governance framework in Australia? Further, what action needs to be taken to address these threats?

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the honourable member for Moncrieff for his question. Australia’s system of corporations law rests on Commonwealth power from the Constitution, which is a part power, and referred powers from the states, which make up the difference. The states have referred to the Commonwealth their powers over corporations so that our system can be seamless under the one national regulator. Unfortunately that referral is due to end on 15 July of this year—less than eight weeks away. Only two states have renewed the referral. They are South Australia and Tasmania. I warned in this House in March of this year that unless referrals were forthcoming from the remainder of the states then Australia’s system of corporations law would be subject to constitutional challenge and decisions made by the corporate regulator could be undone on constitutional grounds. In addition to that, this would affect investment and business costs, as the possibility would arise that some parts of the Corporations Law were deemed constitutional and others not.

I wrote to the remaining state governments—Western Australia, Queensland, New South Wales and Victoria—last week and requested that they extend the referral of their power over corporations from July 2006 and that they do it as a matter of urgency. I stress again that this is only eight weeks away. There has been a suggestion from some of the Labor states that they may not renew this referral because the government has relied upon the corporations power for its industrial relations legislation. I assure the House that the Commonwealth has not used the referred power to support its recent industrial relations legislation and has no intention of doing so. Extending the reference power relating to corporations has nothing to do with the use of the Commonwealth’s own constitutional power in relation to corporations as a basis for industrial relations reforms. This is something that is far too important for politics. It is something that should not be delayed. It should not have got to this stage. I call on the remaining states to immediately renew that referral of power so that Australia’s Corporations Law can continue seamlessly, immune from constitutional challenge, in the interests of the business community and the people of Australia.