Wednesday, 17 March 2021
Treasury Laws Amendment (2021 Measures No. 1) Bill 2021; Consideration in Detail
by leave—I move amendments (1) and (2) as circulated in my name together:
(1) Clause 2, page 2 (table items 1 to 4), omit the table items, substitute:
1. The whole of this Act The day after this Act receives the Royal Assent.
(2) Schedule 2, page 25 (line 1) to page 38 (line 8), omit the Schedule.
Labor's amendment is simple: it cuts out schedule 2 of the bill. The schedule contains the government's plan to weaken continuous disclosure rules and damage corporate transparency. If the government members agree to this simple amendment, the remainder of the bill—that is, schedule 1 of the bill, which deals with virtual AGMs—will sail through this House and, I presume, will gain assent from the other place as well.
We won't stand for the proposition that corporate transparency should be reduced. We are on the side of small investors and self-funded retirees. This is an insidious measure. The measures contained in schedule 2 would make it easier for companies and company directors to get away with withholding information or providing misleading information to shareholders. Will the majority of companies and the majority of shareholders do that? The answer is no, and we know that they won't, because the majority of directors disagree with the provision that the government is trying to ram through the House—that is to say, the majority of directors who are given relief by this bill don't support it. So you have to ask yourself: if the majority of directors of Australian listed companies do not want this relaxation of standards, why is the government determined to cram it through? Without corporate disclosure rules, dodgy directors can get away with not releasing crucial information to shareholders, and the overwhelming majority of good directors know that this is not in their interests and is not in the interests of the economy as a whole.
The Liberal Party claim that these rules will stop opportunistic shareholder class actions, as if access to justice for small shareholders through class actions is somehow illegitimate or some form of crime. We disagree, but this is a continued obsession for some members of the Liberal Party who seem to think class actions are this immense problem. The fact is they are not. In fact, less than one per cent of cases filed before the Federal Court are class actions, they affect a tiny minority of companies and not only must that tiny minority have done the wrong thing but that egregious action must lead to damage which is justiciable.
This is a solution in search of a problem. By contrast, all Australian shareholders benefit from Australia's strong continuous disclosure laws, and all Australian shareholders will be harmed by the government's changes. Repealing the laws that protect shareholders and allow our investment markets to function, just because you don't like class actions, is like shooting the cow because you don't like milkshakes. Regardless of your thoughts on class actions, it's a bad idea. It's a very bad idea to make it easier for bad actors to withhold information from shareholders. Don't ask me; ask the International Corporate Governance Network. Their evidence to the first Senate inquiry into this bill was very clear. They said that the changes would circumvent the true and accurate valuation of companies; hinder the functioning of fair and efficient capital markets; foster misleading, dishonest conduct; strip shareholders of their rights to redress for mass wrongdoing; and shield company directors, advisers and auditors from accountability. In short, this measure is a direct attack on markets and their institutions that support our economy which will only benefit a very small number of poorly behaved directors but damage a vast number of shareholders, particularly small mum-and-dad investors and self-managed retirees.
Other speakers in this debate have made the observation that this government has a very low standard of accountability. It will take responsibility for nothing—whether it's sports rorts, whether it's the egregious action of the minister for climate change and energy, whether it's the outrageous waste of taxpayer money with the Leppington Triangle affair, or whether it's the 'don't ask, don't tell' culture that seems to permeate the Prime Minister's office. It is one thing to hold yourself, your government and your ministers to such a low standard; it is another thing entirely to try to export this culture to corporate Australia. We won't support it.