Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The Commonwealth Authorities and Companies Amendment Bill 2008 primarily amends the Commonwealth Authorities and Companies Act 1997, or the CAC Act, as it is colloquially known, to improve the governance and accountability arrangements for Commonwealth authorities and Commonwealth companies. The bill also contains a small number of consequential amendments to the Legislative Instruments Act 2003, the Australian Broadcasting Corporation Act 1983, the Australian Industry Development Corporation Act 1970, the Australian National University Act 1991 and the Special Broadcasting Service Act 1991.

This bill is designed primarily to amend the CAC Act and represents the most significant set of amendments to the act since it commenced on 1 January 1998.

The CAC Act regulates Commonwealth authorities and Commonwealth companies. For Commonwealth authorities, the CAC Act contains detailed rules about reporting and accountability and also deals with matters such as banking and investments and the conduct of officers for Commonwealth authorities. For Commonwealth companies, the CAC Act contains reporting and other requirements that apply in addition to the obligations and responsibilities imposed by the Corporations Act 2001.

The amendments in the bill are primarily intended to improve accountability and transparency arrangements for Commonwealth authorities and Commonwealth companies. The amendments in the bill also improve the alignment of the CAC Act with equivalent provisions in the Corporations Act and update the CAC Act based on experience from over 10 years of operation.

The bill seeks to improve the efficiency and transparency of notifying directors of Commonwealth authorities and wholly owned Commonwealth companies of the general policies of the Australian government that apply to a body.

Responsible ministers will still be required to consult with the directors of Commonwealth authorities and wholly owned Commonwealth companies on proposed general policies that are to apply to them. However, the new process will significantly improve transparency through the general policy orders issued by the finance minister being made available to the public through being published on the federal register of legislative instruments.

The new process also improves efficiency and reduces red tape within government by replacing a current cumbersome process that relies on multiple letters and correspondence between ministers and bodies without the notifications being readily transparent.

Another proposed amendment to the CAC Act will clarify reporting obligations for Commonwealth authorities and improve transparency around granting time extensions by applying the process contained in the Acts Interpretation Act 1901.

The CAC Act also currently includes annual reporting obligations for Commonwealth companies based on reporting requirements contained in the Corporations Act 2001. However, as a consequence of amendments to the Corporations Act since the CAC Act commenced in 1998, there can be different annual reporting standards applied to Commonwealth companies, depending on the company’s classification.

Amendments to the CAC Act will improve the accountability of Commonwealth companies by requiring annual reports to be prepared in line with the requirements for public companies under the Corporations Act.

Additionally, to ensure annual reports contain appropriate disclosure on public sector governance and risk management issues, for example, amendments in the bill will allow the finance minister to require additional information through finance minister’s orders.

Since the CAC Act commenced in 1998, the Auditor-General has submitted the annual reports of subsidiary companies of Commonwealth authorities and Commonwealth companies to the minister responsible for those bodies.

The bill will make amendments to the reporting requirements of subsidiaries so that directors of the relevant Commonwealth authority or Commonwealth company are responsible for submitting annual reports to responsible ministers. This amendment better reflects the responsibilities that directors of Commonwealth authorities and Commonwealth companies have for the operations of subsidiaries.

Through proposed amendments, this bill will provide Commonwealth authorities with greater clarity about the power to purchase goods and services by the use of credit cards where they do not currently have the express power to borrow. Importantly, the bill will also introduce a related criminal penalty associated with misuse of a Commonwealth authority’s credit cards.

When originally drafted the CAC Act sought, where relevant, to impose on directors and other officers of Commonwealth authorities obligations and responsibilities similar to those under the Corporations Act. Since that time, subsequent amendments to the Corporations Act have reduced the alignment in a number of areas. This bill will improve the alignment of the CAC Act with the Corporations Act in the areas of offences, penalties and terminology.

The bill will insert new offences into the CAC Act to align with similar provisions in the Corporations Act. The bill will also amend a number of penalty clauses to align them with similar provisions in the Corporations Act, including the introduction of a number of new civil penalty provisions.

Additionally, the bill strengthens the test for determining when the Commonwealth controls a company by employing terminology used in the Corporations Act for determining when a company is a subsidiary.

Finally, the last major proposal of the bill involves amending the CAC Act to clarify the level of protection of officers and public servants from statutory and other duties, as they carry out their responsibilities in relation to Commonwealth authorities.

In particular, these amendments will strengthen accountability arrangements through removing an exemption from criminal penalties contained in the CAC Act for breach of officers’ duties.

Overall, the amendments in this bill provide a significant and much needed update to the CAC Act, improving transparency, accountability and governance arrangements for Commonwealth authorities and Commonwealth companies. I commend the bill to the House.

Debate (on motion by Mr Hunt) adjourned.