STEPHEN JONES MP
SHADOW ASSISTANT TREASURER
SHADOW MINISTER FOR FINANCIAL SERVICES AND SUPERANNUATION
MEMBER FOR WHITLAM
SENATOR ANTHONY CHISHOLM
CHAIR OF SENATE ECONOMICS REFERENCES COMMITTEE
SENATOR FOR QUEENSLAND
The Senate Economics References Committee has condemned the Morrison Government’s attempt to amend Australia’s continuous disclosure laws, calling it “a textbook example of how governments should not develop legislation”.
Josh Frydenberg’s flawed proposal would water down the continuous disclosure laws introduced by the Howard Government two decades ago – part of Australia’s world-leading corporate law regime.
The changes would make it harder for shareholders to hold dodgy directors to account for withholding information or misleading the market.
This would not be an unintended consequence – this is the Government’s explicit policy objective.
Evidence shows that the Government failed to consult with a single advocate for retail investors or self-funded retirees – the people most likely to be negatively affected by these changes.
When consulted by the Committee at public hearings, shareholder advocates slammed the reforms, saying that they would “remove access to justice” and benefit “companies that are putting forward wrong, inappropriate, disclosures”.
FOI documents obtained by The Guardian also revealed that Government had earlier ignored warnings from ASIC which said that the existing continuous disclosure regime was “a fundamental tenet of our markets and is particularly important during times of market uncertainty and volatility (eg the GFC, Covid‐19 pandemic)”.
The Government’s key claim is that the changes would reduce insurance premiums for directors. Evidence provided to the Committee by the Insurance Council of Australia shows that this claim has no substance – indicating that there will be “no discernible effect” on premiums.
The Committee also found that the Government had flouted its own regulatory review process – certifying a partisan review led by Liberal Senator James Paterson as an independent review, equivalent to a Regulatory Impact Statement.
On the evidence, the Committee “particularly concerned about the disproportionate and negative impact that the proposed changes would have on retail investors, including self-funded retirees, mum and dad investors and the growing number of younger Australians who are participating in the share market”.
The Committee concluded that “the existing continuous disclosure laws in Australia are world-leading and should not be watered down".
Labor agrees with the Committee’s findings and calls on the Government to abandon its, flawed destructive move to permanently undermine Australia’s continuous disclosure laws.
LINES ATTRIBUTABLE TO STEPHEN JONES MP, SHADOW ASSISTANT TREASURER AND SHADOW MINISTER FOR FINANCIAL SERVICES
“The Senate Economics Committee’s findings should show the lie in any claim that the Morrison Government’s changes will benefit shareholders.”
“The Morrison Government is proposing to cut back corporate disclosure laws, a move that will only benefit company directors who are doing the wrong thing.”
“Labor won’t stand by while the Coalition guts laws that protect small shareholders, including self-funded retirees.”
“Josh Frydenberg should be ashamed of his plans to tear up Australia’s world-leading corporate disclosure regime.”