The Federal Government has used the last sitting day of Parliament this year to introduce legislation backing the latest iteration of the Corporate Law Economic Reform Program – CLERP 9, setting guidelines for disclosing executive remuneration and establishing stronger guidelines for audit oversight.
The legislation will be debated during the first session of the Parliament next year during which time the Australian Labor Party Opposition has signalled it will be moving amendments aimed at strengthening the bill, including imposing a requirement that the trustees of superannuation funds not only vote their shares but disclose the manner in which they vote.
The Treasurer Peter Costello says the legislation is aimed at modernising business regulation and investor protection at the same time as enhancing the disclosure of relevant information to the market.
He says the bill responds to the recommendations of the Ramsay Report on the independence of Australian company auditors and takes account of relevant recommendations of Report 391 of the Joint Parliamentary Committee of Public Accounts and Audit.
Costello says the legislation also incorporates recommendations of the HIH and Cole Royal Commissions.
“The Bill reflects the Government’s commitment to reinforce the importance of independence of auditors, while ensuring that regulatory requirements take into account local conditions,” he says.
The Opposition spokesman on Financial Services and Corporate Governance, Senator Stephen Conroy says the legislation has not gone far enough in terms of implementing the recommendations of the HIH Royal Commission.
He claims the Treasurer has backed down on a commitment to fully implement the HIH Royal Commission recommendations on audit reform because the legislation has halved the “cooling off” period from 4 years to 2 years before former auditor partners can become employees or directors of clients.
“The Treasurer has broken his promise to implement all of the HIH recommendations and has caved into lobbying by the accounting profession,” Senator Conroy says.
He says Labor is disappointed but not surprised big business has succeeded in pressuring the Government to back down on corporate reform.
“Labor will propose amendments to strengthen the CLERP 9 bill and prevent further erosion of these important reforms,” Senator Conroy says.
