Katy Gallagher (ACT, Australian Labor Party) Share this | Hansard source

The opposition will be supporting the government's amendments. We acknowledge and thank Minister O'Dwyer for briefing my office on Friday on these amendments, but the briefing was arranged at quite short notice. So we have only had the weekend, really, to understand the oral briefing, and I think the amendments were provided and circulated quite late as well.

With that as a preface to my comments, we take the government at its word that these amendments are necessary to fix some gaps that came to the attention of the government during the course of the Senate inquiry, particularly in relation to part 2 of the bill, which sets out new provisions to stop the enforcement of ipso facto clauses that are triggered when a company enters administration. As I said in the second reading speech, we certainly support part 2 of the bill. An ipso facto clause creates a contractual right that allows one party to terminate or modify the operation of a contract upon the occurrence of some specific event. Currently, such rights may allow one party to terminate a contract just because of the financial position of the company, even though the company is still meeting its obligations under the contract. Our understanding of the government's amendments is that they will address the following gaps. The current bill, unamended, may not cover self-executing ipso facto clauses and may only be limited to the regular ipso facto clauses, which require a party to elect to rely on the ipso facto clause. The amendment will fix this to make clear that the self-executing, or automatically operating, ipso facto clauses can also be covered. Also, the bill, as drafted, allows for an administrator to release a party from the stay on the ipso facto clauses that the bill contains. However, if the company goes into liquidation, the current bill does not allow for the liquidator to release a party from the stay on the cause. The amendment will fix this so that the liquidator can also have this power.

Labor will be supporting the amendments.