Kelly O'Dwyer (Higgins, Liberal Party, Minister for Revenue and Financial Services) Share this | Link to this | Hansard source

I move:

That the amendments be agreed to.

Firstly, I'd like to thank those members who have contributed to this debate. This bill amends the Corporations Act 2001 to introduce a safe harbour for company directors undertaking corporate restructures outside of formal insolvency proceedings and to restrict ipso facto clauses that make it harder for businesses to successfully recover from financial difficulties. It is a bill that promotes a culture of entrepreneurship and innovation to drive business growth and global success and help save local jobs. As a result of the Senate Economics Legislation Committee's inquiry into this bill, the government made some minor and technical attempts to part 2 of the bill to ensure that it operates as originally intended. In addition to these amendments, one other amendment was passed in the other place that enshrined a review of the safe harbour provisions in legislation two years from commencement. The government is confident that this review will confirm the government's position that this legislation will improve our insolvency regime.

Andrew Leigh (Fenner, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Part 1 of schedule 1 of the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill 2017 contains a safe harbour for directors for liability for insolvent trading. That safe harbour is intended to support directors to restructure the business and to continue operating to the overall benefit of the company and the stakeholders. Labor acknowledges the intent of the legislation to ensure that directors who honestly and diligently seek to turn around a business are not prevented from doing so.

Labor moved amendments to the bill to strengthen the safe harbour and to protect against its misuse, including increasing the proof that directors must show. Those amendments were not accepted by the Senate. Labor also moved amendments to require a review of the safe harbour after two years to ensure that there are no unintended consequences. That amendment requires that the review look at the impact of the availability of the safe harbour to directors of companies and at the conduct of directors in the interests of creditors and employees of those companies, as well as any other matters that the minister considers relevant. It must be undertaken by three persons who, in the minister's opinion, possess appropriate qualifications to undertake the review, and it requires a written report which must be tabled in each house of the parliament within 15 days after the day on which the report is given to the minister.

This is an important amendment and I commend Senator Gallagher in the other place for her work to ensure that this amendment passed the Senate. Labor will be watching to ensure that the safe harbour does not have a negative effect on workers being paid their entitlements. We will move to make changes if the safeguards in the bill are not effective.

Part 2 of schedule 1 of the bill sets out new provisions to stop the enforcement of ipso facto clauses that are triggered when a company enters administration. Labor has supported government amendments to fill gaps that were identified as part of the Senate inquiry and Labor is supportive of part 2 of the amended bill.

Question agreed to.