Pat Conaghan (Cowper, National Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I rise to speak on the Corporations (Review Fees) Amendment (Technical Amendments) Bill 2025. This is a remarkable piece of legislation and not for the good reasons. What we have before us today is a bill that seeks to retroactively validate more than a decade's worth of unlawful fees collected by ASIC because of a mistake made under Labor back in 2011. This is no small administrative oversight; it is a drafting error of at least $150 million that sat hidden in law for 14 years. And now Labor is seeking parliamentary approval to make it all go away by passing the biggest retrospective tax validation in Australia's history.

Let's step through how we got here. In 2011, under the Gillard Labor government, the parliament introduced legislation that impacted indexation of ASIC company review fees. But it turns out the legislation was botched. That mistake meant that, since 2011, legally, indexation was improperly applied to a variety of ASIC review fees, including late payment fees, the 10-year prepayment fee and the special-purpose company fee for charities and not-for-profits. That means that, each year, ASIC published the index amount, charged them and collected the revenue from millions of Australian companies without a proper legal basis to do so. It wasn't until late 2024, during an internal ASIC legal audit, that the error was finally discovered. Fourteen years after Labor's regulation took effect, ASIC realised it had been charging the wrong amounts all along.

While this was a drafting mistake, and we accept mistakes can happen, the scale of this mistake is breathtaking. More than 1.5 million registered companies have paid the affected fees. Another 800,000 deregistered entities were charged. And nearly half a million more were invoiced but hadn't yet paid. All told, somewhere between $150 million and $200 million has been over-collected due to the indexation that wasn't legally valid. This is an extraordinary fix to ask the parliament to agree to, and it deserves proper scrutiny. ASIC collects around $1.8 billion in fees and levies every year, including over a billion dollars in registry fees from Australian businesses, from small family companies to farmers and not-for-profits. It is a regulator that is notoriously tough on small business. It routinely cancels companies' registrations for late payments, it imposes penalties too often on low-hanging fruit and self reported mistakes, and it holds businesses to the absolute letter of the law. Yet, here we are. Due to a technical error, ASIC itself has technically incorrectly applied the law for 14 years, charging unlawful fees, and is now asking the parliament to fix the mess.

Small businesses that are a week late on a $310 annual review fee can get deregistered, but ASIC has gotten the law wrong for 14 years, overcharging a minimum of $150 million. We appreciate that ASIC found this error themselves, but we should have a higher expectation of our own regulator. The government introduced new regulations in March this year to correct the problem going forward, and that's fair enough. It's a good step. But this bill goes further. It retrospectively validates every fee charge since 1 July 2011. In other words, it rewrites history. It makes what were technically illegal charges legal after the fact. That is not something the parliament should ever take lightly.

The coalition generally oppose retrospective legislation, particularly retrospective taxation. It undermines confidence in the rule of law and sets a dangerous precedent. However, we are conscious that, without a fix, we could see a $150 million budget black hole that could be patched only by higher taxes. We don't want to see taxpayers forced to pay for Labor's mistakes, but it is something that needs to be properly scrutinised. That's exactly why this bill needs to go to the Senate Economics Legislation Committee. We are talking about more than a decade of unlawful fees charged by the corporate regulator itself, an agency that too often demands absolute precision from others.

Before this parliament agrees to validate these fees, there are serious questions that must be answered. How did this happen? Why wasn't it detected by ASIC, Treasury or Finance much earlier? And should any of the businesses that have been harassed about these fees get some leniency about this blunder? Australians have a right to expect that regulators are held to the same standards they impose on everybody else. ASIC's heavy-handed approach to enforcement has been a longstanding concern across the business community. We've heard it from farmers, tradies and family trusts that have been hit with late fees and penalties when they were doing their best to comply. Yet ASIC, which lectures others about compliance in corporate conduct, has itself been collecting unlawful fees.

That is why we will move to refer this bill to the Senate Economics Committee for full and proper scrutiny, because this parliament should not be rushed into rubberstamping a retrospective law that excuses 14 years of misapplied fees without knowing exactly how it happened and who was responsible. The Senate committee process will allow businesses, accountants, company directors and legal experts to have their say. It will shine a light on how such a serious error went undetected for so long and whether affected companies deserve a refund or an offset.

We will not oppose the bill today, but we also can't support it until it receives proper scrutiny. The coalition believes in accountability, we believe in protecting taxpayers, and we believe that when government makes mistakes the Australian people deserve explanations of those mistakes and deserve that these mistakes receive proper scrutiny. So let's have a Senate inquiry do that work, hear from stakeholders that have been paying these fees and understand how they've been impacted. And if there's more that the government needs to consider before parliament passes these retrospective changes, so be it, because if small businesses are expected to comply with every rule and regulation to the letter of the law then surely ASIC and the government should do the same.

Debate adjourned.