John Watson (Tasmania, Liberal Party) Share this | Hansard source

I would like to take the opportunity on the presentation of this report of the Parliamentary Joint Statutory Committee on Corporations and Financial Services entitled Better shareholders—better company: shareholder engagement and participation in Australia to congratulate Senator Murray for originating this very important reference, focusing on shareholders. It is an appropriate time to recognise 12 years of outstanding service that have been given by the past chairman, Senator Chapman from South Australia. During his time, Senator Chapman raised a range of very significant issues, many of which have been adopted, and he has been recognised in the corporate community as a person promoting high ideals. At a time of such turbulence in the stock markets, as currently, there is always the opportunity of a knee-jerk reaction. To the credit of the committee, they presented a very balanced and objective report, rather than reacted to the particular issues of the moment.

Today company directors indeed face a lot of challenges. Australia, and Australian law and its enforcement, have stood up well in the face of this turmoil. We have not had the degree of volatility or difficulties that overseas countries have experienced. Corporate directors are facing increasing pressures in terms of corporate governance—risk management; changing accounting standards; meeting new international requirements; constant taxation issues; and also keeping an eye on the prospects and activities of a sudden appearance of hedge funds on their share register and the consequences that that can have, particularly when employing short selling. I was particularly pleased, Senator Chapman and Senator Murray, that you addressed this issue of short selling. It is a question of how best to regulate that in a meaningful manner. As you know, short selling in Australia is prohibited; however, I think there are about five or six exemptions under which it can operate, and it is in these areas that we ask the government and the regulator, particularly ASIC, to focus attention. Certainly, if they apply the skills within ASIC together with the expertise within Treasury, I believe we could get a good outcome in order that Australian companies can move forward to give directors the confidence to take manageable risks, whilst ensuring that their companies operate in an appropriate manner to the satisfaction and benefit of shareholders. I thank the Senate.

Question agreed to.