Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Hansard source

and welcome Senator Brandis’s interjections and participation. The Australian Business Investment Partnership Bill 2009 and the Australian Business Investment Partnership (Consequential Amendment) Bill 2009 are an important component of the government’s efforts to help cushion Australia from the worst global financial and economic environment Australia has seen since the Great Depression. This environment is challenging on a wide variety of fronts. ABIP is a temporary contingency measure to address the risks that some financiers, particularly foreign banks, may reduce their level of financing of viable Australian businesses. We hope that foreign banks do not reduce their financing of Australian businesses, but we need to be prepared. That is why, on 24 January 2009, the Prime Minister and the Treasurer announced the government’s commitment to establish ABIP.

ABIP will provide stability and confidence to the commercial property sector and to the financial system and will help protect Australian jobs. The commercial property sector employs around 150,000 workers and is an important investment asset for superannuation funds and, through them, everyday Australians. The government has designed ABIP very carefully to ensure it meets a well-defined economic need, with appropriate safeguards to protect taxpayers. ABIP will have strong governance and accountability arrangements. The government will appoint the chair of ABIP and the Auditor-General will be ABIP’s auditor. I would add that the Treasurer recently announced the government appointment of Mr David Borthwick, a very senior former public servant and an exceptionally well-qualified individual, to be the government’s nominee and chair of the ABIP board. Mr Borthwick is highly experienced and exceptionally well qualified for the job, with a distinguished and highly relevant Public Service career.

The government welcomes the amendment that allows Mr Borthwick to be supported through the addition of another government-appointed director. These are sensible and comprehensive measures to safeguard the interests of taxpayers while allowing the government to respond quickly and prudently to a potential threat to the Australian economy. ABIP will have prudent lending criteria requiring the underlying assets and the income streams from those assets to be financially viable. ABIP will have a limited life and will only be able to write loans for two years. ABIP will only provide financing if a borrower cannot obtain finance from other commercial providers. Careful consideration has also been given to ABIP’s financial structure, in particular, ensuring that taxpayers receive a guaranteed fee if ABIP ultimately issues any government guaranteed debt. All resolutions of the board are required to be unanimous, with the exception of enforcement resolutions, where an 80 per cent majority will be required, provided the government chair is part of the majority. We will required to table the company’s financial reports, directors’ reports and auditor’s report for each financial year in each house of the parliament as soon as practicable after receipt.

I would like to thank Senators Fielding and Xenophon and the Greens, led by Senator Bob Brown, for their contributions. Their contributions stand in stark contrast to the actions of those opposite, who have continued with their single-minded response to the worst global recession since the Great Depression. Because those opposite have only one response—to sit on their hands and wait and do nothing—the opposition could not even make themselves available to debate this important legislation in a timely manner. Just doing nothing is not a solution, and it will not support jobs in our economy. The government has demonstrated its willingness to respond positively to issues raised by senators to ensure this needed reform can be legislated in a way that is effective and robust. ABIP will having lending criteria no less prudent than the lending criteria for investment grade loans that the four major banks apply in the ordinary course of their business.

We have worked with Senator Fielding to ensure this is watertight. Senator Fielding has asked whether the bill can ensure that the terms of ABIP’s loans will not exceed three years. The government is willing to accept this limitation. The government understands the concerns that Senator Brown has raised—and has been raising for a number of years in this chamber—regarding executive salaries. The government understands the community and Senator Brown’s concerns about excessive executive pay. That is why we have commissioned a Productivity Commission inquiry into executive pay and it is also why we have cracked down on golden handshakes. The government will continue to work with Senator Brown on this issue and the ABIP bill and, more broadly, to broaden the mandate to the PC inquiry into executive pay as appropriate. The government has designed ABIP in such a way as to take account of competition issues, but we will support the amendments whereby the Australian Competition and Consumer Commission will be required to prepare a competition impact statement and competition exemption report on ABIP. We also commit to examine the issues Senator Xenophon has raised more broadly on the process for legislating exemptions under the TPA.

The government welcomes the amendment to allow the Export Finance and Insurance Corporation to provide ABIP with specialist assistance in meeting its objectives during its immediate set-up phase. EFIC offers an efficient and cost-effective solution with the systems, processes and infrastructure needed to meet ABIP’s immediate needs during its establishment phase.

I would also like to briefly respond to some questions raised in the debate. Senator Xenophon asked about the role of ASIC with respect to ABIP. ABIP will be an unlisted public company under the Corporations Act 2001. All such companies are regulated by ASIC under the act and must comply with requirements of the Corporations Act. Any breaches or complaints about ABIP in relation to its conduct under the Corporations Act will be handled by ASIC in the same way it deals with all other companies. But ABIP will not be singled out for supervision above and beyond existing requirements of the act. In response to Senator Xenophon, I can advise that the Auditor-General may access ABIP’s books at any time under existing provisions of the Corporations Act 2001. Pursuant to section 310 of the Corporations Act, the Auditor:

(a)

has a right of access at all reasonable times to the books of the company ...

And:

(b)

may require any officer to give the auditor information, explanations or other assistance for the purposes of the audit or review.A request under paragraph (b) must be a reasonable one.

I can also confirm that the constitution and shareholders agreement will be required to be made public when finalised and then at any time either of them are amended. Without ABIP, there will be no safety net for the commercial property sector and the jobs and businesses it supports in the event that viable Australian commercial property assets are threatened by withdrawal of financing. I commend this bill to the Senate.

Question put:

That these bills be now read a second time.