Australia's corporate watchdog, the Australian Securities and Investment Commission, would have been starved of funds under Labor, undermining its capacity to carry out its role effectively, the Parliamentary Secretary to the Treasurer, Senator Ian Campbell, said today.
"Such is the hypocrisy and backflips of Labor on corporate governance that its shadow treasurer now says he would support more funds for ASIC yet at crunch time at the last election all that Labor offered was a paltry $1.25 million a year," he said.
"The Government gave ASIC the resources it needed to do its job properly -- an extra $23 million a year. And this was in addition to $5.1 million of special funding for the HIH Royal Commission and extra licensing work.
"This Government is tough on corporate crooks. In the past three years 69 corporate criminals have been jailed for a maximum of 229 years and currently there are more than 100 defendants before the courts on criminal charges."
Senator Campbell said Labor risked unnerving the confidence of ordinary investors through its policy panic on corporate governance.
"Simon Crean is talking up a crisis at the same time as he is preaching the need for confidence in the market," he said. "This is typical of Labor's muddled thinking on these issues. After six years of corporations policy vacuum, Labor is in panic mode playing catch-up."
Senator Campbell said the strength of Australia's corporate regulatory framework was recognised internationally and was a key factor in the sharemarket's capacity to withstand the extent of falls in the US market and Australia's cleaner corporate record.
"Corporate governance is a dynamic process and this Government has demonstrated over the past six years its determination to reform the regulatory framework and laws and to lead and to act.
"We should not slavishly follow the United States, as Labor would. Indeed America itself has indicated that, in many ways, it intends to catch up with Australia on corporate governance and disclosure."
Senator Campbell said:
- The Government was on track to release its next Corporate Law Economic Reform Program policy paper at the end of the month. This would outline the Government's position on the Ramsay report on audit independence, continuous disclosure measures such as analyst independence, protection of responsible officers reporting on breaches of the law and increased shareholder participation in companies through the internet.
- Expensing of executives' share options would be mandatory under a single set of international accounting standards to be adopted by Australia and the European Union in 2005. It was patently absurd for the ALP to talk about pre-empting an independent accounting standard.
- One big lesson of US corporate regulatory problems was the need to keep political interference out of accounting standard setting. "Mr Crean is winding this clock back."
Senator Campbell said the newly-formed Corporate Governance Council headed by the Australian Stock Exchange demonstrated that stakeholders were taking the initiative to develop and define best corporate governance practices for Australian companies.
CANBERRA
19 August 2002
Further information: Wayne Grant 02 6277 3955 or 0407 845280