SHADOW MINISTER FOR CONSTITUTIONAL REFORM
MEMBER FOR ISAACS
Treasury Laws Amendment (2021 Measures No. 1) Bill 2021
Consideration of Senate Message
10 AUGUST 2021
Labor will not be agreeing to the Senate amendments because, by agreeing to the amendments, we would be supporting the passage of the bill. While we have consistently voted in favour of schedule 1 of the bill, Labor are strongly opposed to schedule 2. It should not pass the parliament.
You couldn't make this up. In the same week that the Intergovernmental Panel on Climate Change has sounded the alarm, once again, on the need for urgent action on climate change, and while millions of Australians endure lockdown because of the Prime Minister's incompetence and delinquency on the vaccine rollout, the Morrison government has prioritised the passage of this bill, this bill which would make it easier for company directors to withhold important information from shareholders and harder for shareholders to take action against dodgy directors. This is what this rotten government has decided to prioritise.
Let's be clear about what we're talking about here. Schedule 2 of this bill will make it easier for company directors to withhold important information from shareholders, and harder for shareholders to take action against dodgy directors. This is not a design flaw. It is not an unintended consequence. That is actually what the Morrison government is seeking to achieve with these changes.
Australia's continuous disclosure obligations require companies to keep markets informed of anything that could materially affect their share price. These laws protect shareholders, promote market integrity and, by extension, make it easier for Australian companies to raise capital. The current laws, that is, the laws that this government, this rotten government, is trying to amend, were put in place over 20 years ago by none other than former Prime Minister John Howard. They have served Australia and Australian retail investors very well. Continuous disclosure laws are too important to be messed around with or treated like an ideological plaything, but that is how the Morrison government is treating them. And it's a direct attack on the rights and interests of every shareholder in Australia, from mum and dad investors to self-funded retirees to large institutional investors. Every single Australian shareholder should be concerned about these changes.
As the Australian Shareholders Association has said about these changes:
So the new instruction to management from Boards could be, ‘if you want to keep some information to yourself or exaggerate a bit just make sure you don't tell me so no one can sue me’.
And yet last night, in the Senate, Liberal senators spoke passionately in support of the measures in schedule 2 of this bill. Forget about climate change, forget about the disastrously slow vaccine rollout, forget about fixing national quarantine: according to Liberal senators, the most important issue facing the country is that shareholders have too much power to hold dodgy directors to account and these Liberal senators think that shareholders shouldn't have that much power.
This morning in the pages of the Australian newspaper, while millions of his fellow Victorians endure their sixth lockdown, the Treasurer of Australia waxed lyrical about the importance of making it easier for companies and company directors to withhold information from their shareholders. That's what's occupying the mind of this Treasurer while his constituents in Kooyong and millions of others across Melbourne are forced to stay indoors because of the Morrison government's incompetence. Where do these people get off? If the Prime Minister and his Treasurer were half as passionate about the vaccine rollout or about fixing national quarantine as they are about letting dodgy directors off the hook, half the country wouldn't be in lockdown right now.
Time after time after time, the Morrison government put their interests and those of their mates above the interests of Australians. Instead of doing everything in their power to get Australians out of lockdown, the Prime Minister and his Treasurer are using the national parliament to sneak through legislation to help their mates. They are not on the side of Australians.
I think it's important to conclude by reiterating a number of points I made in my second reading contribution when this bill was last in the House. The changes proposed by the Morrison government would put the narrow self-interest of a tiny number of individual company directors above the interests of millions of mum-and-dad investors, self-funded retirees and large institutional investors. As I noted when I delivered my speech in relation to this bill, according to a survey conducted by major commercial law firm King & Wood Mallesons, these changes do not even appear to be supported by a majority of senior company directors. The Mallesons survey asked 195 company directors and senior executives about the Morrison government's temporary changes to continuous disclosure laws. Only 11.3 per cent said that they relied on those changes, and almost 80 per cent said that the changes should not be made permanent, which is what's happening with these amendments in schedule 2 of this bill.
Why would the vast majority of company directors and senior executives oppose the Morrison government's attempt to make it easier for people like them to mislead or withhold important information from shareholders? My theory is that it's because most company directors understand that Australia's strict continuous disclosure laws are ultimately good for everyone. (Extension of time granted) They make Australian companies more attractive to investors, including international investors, and so make it easier for Australian companies to attract capital. In other words, Australia's strict continuous disclosure laws make it easier for company directors to do the job that they are there to do, and that is to promote the interests of shareholders. I also think that most company directors in Australia do the right thing and have no problem with laws that require them to do no more than the right thing, and that is to provide shareholders with timely and accurate information about the company that they've invested their money in.
It must come as a shock to the Morrison government to learn that there are people out there in the Australian community who are happy to do the right thing and who actually have no problem with laws that keep them accountable. That is a foreign idea to the Morrison government, which is a government with no standards and which is at war with transparency and any notion of accountability. When the Auditor-General discovered that the Morrison government had used $100 million of taxpayers' money as a Liberal Party slush fund, the so-called sports rorts affair, and revealed that the government had paid Liberal donors in Western Sydney $30 million for a $3 million block of land, the Prime Minister did not apologise. When the Auditor-General revealed that the $660 million national Commuter Car Park Fund was rorted by the Morrison government, the Prime Minister actually boasted about it. No minister took responsibility and no minister was reprimanded or sacked, because it's never the wrongdoer who is punished or held accountable by this Prime Minister.
Prime Minister Morrison has made it clear that ministers in his government can get away with pretty much anything. They can rort grant programs, use forged documents and even call a young woman who alleges that she was raped in the office of the Minister for Defence 'a lying cow'. Ministers can do all of these things and more with complete impunity. And with this bill the Prime Minister is telling company directors that he wants them to be able to act with impunity too, without having to worry about being held to account by shareholders. To their great credit, most company directors in Australia, at least according to the King & Wood Mallesons survey of company directors, have rejected the need for these changes because company directors are not like the current Prime Minister. Most company directors, and most Australians, have more integrity in their little fingers than the Prime Minister has in his entire cabinet.
The Treasurer actually says in his own explanatory memorandum that the main impact of the changes in schedule 2 of this bill will be to reduce the amount of time that companies and company officers must spend on ensuring that they've complied with their obligations to provide accurate and timely information to shareholders.
The Treasurer thinks that's a good thing. I suppose it is a good thing for the small number of dodgy directors who do the wrong thing, but it's bad news for mum and dad investors, it's bad news for self-funded retirees and other individuals across Australia who make life-changing investment decisions on the basis of what they are told publicly by companies and by company directors. As I said at the outset, we support schedule 1 of this bill but we do not support schedule 2. So we will be opposing the bill in the House today.