A majority of the joint meeting of the Standing Committee of Attorneys-General and Ministerial Council for Corporations today agreed in principle to refer power to the Commonwealth to deal with the High Courts decision in Hughes case.
The in principle agreement will allow the Commonwealth to make laws limited to the ambit of the existing Corporations Law scheme and the proposed Financial Services Reform Bill. The States and Territories have unanimously agreed in principle to enact validating legislation, subject to several actions agreed to by the meeting.
The States and Territories have also agreed unanimously to authorise officers to settle a referral Bill in consultation with the Special Committee of Solicitors-General. The joint SCAG/MINCO meeting will reconvene in four weeks to consider the referral Bill and any necessary amendments to the corporations agreement. This is a tight time frame and the Commonwealth will do its best to find a workable solution that can be in place by 1 January 2001.
As part of the agreement reached today the Commonwealth has committed to examining long term solutions required to address the implications of the Hughes case for all cooperative schemes, including the possibility of a constitutional amendment.
The High Courts decision in Hughes has put the Commonwealth and the States on notice that the flaws in Australias system of corporate regulation must be resolved. Hughes followed the earlier decision of Re Wakim, which invalidated the cross-vesting of State jurisdiction in federal courts. Hughes has more general ramifications. Aspects of the Corporations Law schemes administration not clearly within the scope of Commonwealth constitutional power have been thrown into doubt. Left unanswered it will continue to undermine business confidence.
We are pleased that the governments of New South Wales, Queensland, Victoria, the Australian Capital Territory, Northern Territory and Tasmania today agreed in principle to work with the Commonwealth to establish a simple and secure constitutional foundation for corporate regulation in Australia which is not vulnerable to repeated legal challenges.
This should allay any concerns in the business community about the commitment of all governments to a single system of corporate law and a single corporate regulator in Australia. There is still much work to be done but today is a major step forward.
While the Commonwealth has made it absolutely clear that it would prefer a uniform national system, and has provided explicit assurances that it will not use referred power for purposes other than those agreed with the States, the proposed system could operate even if all States do not refer power.
We welcome the agreement of South Australia and Western Australia to consider a suitable referral Bill and urge them to look to the national interest and to formally agree to refer powers. Australia can only benefit from a unified national system of corporate regulation; a system that will empower us to move ahead in the new century.