I rise also in support of the Commonwealth Authorities and Companies Amendment Bill 2008, which is a bill to amend an important piece of Commonwealth legislation, the Commonwealth Authorities and Companies Act 1997. This act is an act that governs reporting and management requirements that are imposed on a range of statutory authorities and a number of Commonwealth companies in which the Commonwealth has a controlling interest. By way of illustration, among the statutory authorities are important bodies such as the Australian Fisheries Management Authority, the Australian Government Solicitor, the Australian Broadcasting Corporation, the Australian Industry Development Corporation, the land councils in the Northern Territory and a range of other bodiesthe Australian War Memorial too is an authority that is governed as to its reporting and management requirements by the Commonwealth Authorities and Companies Act.
I rise also in support of the Commonwealth Authorities and Companies Amendment Bill 2008, which is a bill to amend an important piece of Commonwealth legislation, the Commonwealth Authorities and Companies Act 1997. This act is an act that governs reporting and management requirements that are imposed on a range of statutory authorities and a number of Commonwealth companies in which the Commonwealth has a controlling interest. By way of illustration, among the statutory authorities are important bodies such as the Australian Fisheries Management Authority, the Australian Government Solicitor, the Australian Broadcasting Corporation, the Australian Industry Development Corporation, the land councils in the Northern Territory and a range of other bodiesthe Australian War Memorial too is an authority that is governed as to its reporting and management requirements by the Commonwealth Authorities and Companies Act.
Equally there is a range of companies in which the Commonwealth has a controlling interest that are governed by this act. By way of illustration, the National Australia Day Council, Film Australia Ltd, the Telstra Sale Company Ltd and the Australian Rail Track Corporation Ltd give the Committee some idea of the nature of the corporations which are governed by this legislation.
This amending bill picks up a range of requirements that are long overdue. It simplifies the process for applying general policies of the Australian government to make it more efficient and transparent through the introduction of a procedure known as general policy orders, which will replace the current process that is provided for under sections 28 and 43 of the Commonwealth Authorities and Companies Act. It will require all Commonwealth companies to provide a base level of annual reporting to their responsible minister, who then tables the report in parliament. It will better alignthis is one of the more important features of the legislationthe Commonwealth Authorities and Companies Act with the Corporations Act, particularly in relation to offences and in relation to penalties and terminology, so as to get a meshing between the Corporations Act 2001 and the Commonwealth Authorities and Companies Act.
Another purpose of this legislation is to clarify the use of credit cards by Commonwealth authorities and to introduce penalties for the misuse of those credit cards. It makes, I suppose, what could be described as a machinery change in improving the test to determine whether the Commonwealth controls a company and thus better defines what a Commonwealth company is. It provides that directors of a Commonwealth authority or a Commonwealth company must provide financial statements and audit reports of subsidiaries to their responsible minister. It makes some quite important clarifications about compliance with statutory and other duties by amending the protection of directors and public servants in the Commonwealth Authorities and Companies Act to ensure there is protection given to the persons who are intended to be covered.
All in all, this set of reforms is directed at achieving consistency, transparency, accountability and the reduction of red tapeall of which aims are touchstones for the Rudd Labor government, all of which you will hear much more about in the years to come. I will start first with the general policy orders change which is proposed by this bill. That is a measure which is very directly aimed at improving transparency. The Rudd government is committed to transparency. This change will enable the making of general policy orders which will be publicly available. They will be listed on the Federal Register of Legislative Instruments and be more readily identifiable therefore to parliament, to the public and of course to Commonwealth authorities and wholly Commonwealth owned companies.
It will not change the way in which a general policy is developed. What it will change is the way in which such policies will be notified in a transparent way to be issued by the Minister for Finance and Deregulation through a general policy order and listed on the Federal Register of Legislative Instruments. It will also improve consistency of the application of policy and reduce red tape, again those being themes of the Rudd Labor government.
There are some important changes proposed by this bill to reporting requirements to be imposed on Commonwealth authorities and Commonwealth companies. Again, the aim of these changes is to improve consistency. The bill does so by ensuring there will be consistent reporting requirements imposed by treating henceforth all of the Commonwealth companies as public companies, notwithstanding that some of them are technically proprietary companies and have been, since changes were made to the Corporations Act, theoretically exempt from the requirement to prepare annual reports. That is not seen as appropriate. It is seen as appropriate that all Commonwealth companies should report in a consistent way. This bill will achieve consistency in that area.
There will also be increases in reporting by wholly owned Commonwealth companies that are outlined in the bill. There are important alignments to be made by this bill with present provisions of the Corporations Act. I digress to make the comment that, while it is desirable that there be alignment of the provisions that apply to Commonwealth authorities and Commonwealth companies with the provisions of the Corporations Act, the Corporations Act itself is probably sadly in need of some reform. A former Chief Justice, Sir Anthony Mason, was moved to describe the Corporations Lawthat is, the predecessor law of the Corporations Act 2001in 1992, some 15 years ago, in these terms:
Oscar Wilde would have regarded our modern Corporations Law not only as uneatable, but also indigestible and incomprehensible.
Nothing much has changed in the 15 years since Sir Anthony Mason spoke. I regret to say that the Corporations Act has, if anything, only got more indigestible and incomprehensible since.
It is to be hoped that in the short term rather than in the long term we will be able to pay attention to the whole of the provisions of the Corporations Act in order to try to eliminate some of the immense complexity of that piece of legislation. I speak partly as a former practitioner, as someone who has had to work with the provisions of the Corporations Act 2001 and its predecessor legislation. It is very much a project that I hope the Rudd government will be able to pick up. While it is desirable that there be alignment, for present purposes, of the requirements that apply to officers of Commonwealth authorities and Commonwealth companies with the reporting requirements that apply to companies generally under the Corporations Act, it is a matter of regret that in one sense we are imposing the same level of complexity that one can find in the Corporations Act on those Commonwealth authorities and Commonwealth companies.
The particular alignmentswhich I do say are appropriate, notwithstanding the complexity of the provisions of the Corporations Act that they are being brought into line withdeal with, first of all, including a definition of senior manager to make the bill consistent with the provisions of the Corporations Act. As the member for Blair explained, we are going to see increased consistency with Corporations Act offences and penalties so as to bring the provisions that apply to Commonwealth authorities and Commonwealth companies into line with the officers duties provisions that are found in the Corporations Act. There are also going to be matching provisions to impose a criminal penalty where there is a contravention of a reporting rule, similar to the Corporations Act. There are going to be some matching provisions to bring accounting records requirements into line with the Corporations Act. Importantly, again in order to achieve consistency with the Corporations Act, there are going to be provisions in relation to a failure to disclose material personal interests.
Also relating to alignment with the Corporations Act there is presently a very important provision in section 27N of the Commonwealth Authorities and Companies Act which prohibits a Commonwealth authority from insuring its officers against wilful breach of duty, misuse of position or misuse of information. That gives effect to a very important principle relating to corporations, which is that it is wholly inappropriate and improper for a corporation to seek to insure its officers against wilful breaches of duty and wilful misuse of position. This bill will introduce a strict liability element in the same fashion as there is a strict liability element applied to this particular offence in the matching provision in the present corporations legislation.
