STEPHEN CENATIEMPO:
All right, third time lucky. We’re going to talk to Assistant Minister for Competition, Charities, Treasury and Employment, and Member for Fenner, Andrew Leigh. Andrew, the gremlins have got me, mate. If you were the Communications Minister, I’ll be going after you.
ANDREW LEIGH:
Indeed, Stephen. I think you’re having a few tech issues this morning, but it’s lovely to be with you.
CENATIEMPO:
We got there in the end. Now, tell us about these reforms for beneficial ownership of unlisted companies. What does that mean?
LEIGH:
Well, it’s basically about knowing who really owns Australian firms. Right now, our share market register is too opaque and often the person who’s listed on the register is actually a holding company. So, this, for the first time, ensures that you’re not able to hide behind the corporate veil. That’s important in terms of transparency, in terms of making sure that firms aren’t being used for nefarious purposes. It’s a way in which many other countries are moving to having a little bit more honesty and transparency in their corporate registers. We’re taking those next steps today, really moving Australia into the 21st century when it comes to its corporate registers.
CENATIEMPO:
What’s the impetus for this? Is this phoenixing and those kind of things that are happening in the building industry? Is that the kind of thing we’re trying to avoid here?
LEIGH:
Look, that’s one of it. And then also just the risk of tax avoidance if you’re not properly listing who owns Australian firms. One of the strange things I discovered when I looked into this, Stephen, is that sometimes the managers of companies have to pay private investigators to find out who the owners are, because they can’t just find out from the registry –
CENATIEMPO:
Hang on, the managers of the companies have got to find out who their own bosses are?
LEIGH:
Isn’t it amazing? So as they come to an annual general meeting, they think to themselves, who are our big stakeholders? Who owns the largest share of the firm? Unless those owners have passed the 5 per cent threshold, where they have to file a declaration, managers need to do what’s called tracing notices. Send notices through to actually discover who is the true owners of the firms. We don’t want that sort of behaviour to have to occur. We want it to be very clear who are the major owners of Australia’s big firms.
CENATIEMPO:
So, how do the mechanics of this work? So, if you’ve got a company that’s owned by a trust, for instance, what do the owners of that trust then have to declare? What’s the actual mechanism?
LEIGH:
Well, they’ll need to declare who are the true owners, and that information will be available in the first instance to journalists and academics and then more broadly to the general public. It’ll be held by ASIC, who maintain the corporate registers at the moment. And it’ll basically mean that ASIC has the right information about who really owns firms.
CENATIEMPO:
So, for instance, if XYZ Corporation is owned by ABC Corporation, which is owned by Fred Bloggs, XYZ will have to declare that Fred Bloggs is actually the owner.
LEIGH:
Precisely.
CENATIEMPO:
Right. Okay. How are you going to make that work?
LEIGH:
Yeah, it takes a bit of time. It’s particularly in the context of another big project, the so‑called Modernising Business Registers project, having had a big budget blowout under the former government and we had to press the pause button on that. So, we’ve looked for a constructive way in which to make this beneficial ownership register work in the context of needing to be as frugal as we can about government finances right now.
CENATIEMPO:
Well, I was going to have a go at you about claims that the Albanese government is responsible for our labour market being resilient, but I’m going to let you off the hook now because that all makes sense what you just said.
LEIGH:
We must be getting towards Christmas!
CENATIEMPO:
We won’t talk again before Christmas, so all the best for Christmas and the New Year and we’ll catch up again in 2025.
LEIGH:
Thanks, Stephen. And all the best to you and your listeners.
CENATIEMPO:
All the best. Andrew Leigh, the Assistant Minister for Competition, Charities, Treasury and Employment and the Member for Fenner.