The joint Standing Committee of Attorneys-General and Ministerial Council for Corporations today reached an historic agreement.
The meeting in Melbourne unanimously agreed to the Commonwealths preferred option of a broad referral of the Corporations Law and the Australian Securities and Investments Commission Act to deal with the High Courts decision in the re Wakim and Hughes cases.
Under the agreement, the substance of the present Corporations Law scheme, and the powers of Commonwealth authorities to carry out the scheme, will be referred to the Commonwealth. This option will give the Corporations Law scheme a secure Constitutional foundation and restore business confidence in the effectiveness of the scheme.
Both the Corporations Law and the ASIC Act are amended on a regular basis. If no amendment power was included, each of the State Parliaments would almost certainly need to make a new referral each time the laws were amended. This would lead to a risk of different legal regimes in different jurisdictions and substantial delays, and would seriously undermine the viability of the new arrangements for corporate regulation.
To resolve this, the meeting agreed that the States will refer an amendment power that will allow amendments relating to the formation of corporations, corporate regulation and the regulation of financial products or services to be dealt with as necessary. The process of amendment will be subject to provisions of the Corporations agreement. Further work will be done on the consultation and voting provisions of the Corporations agreement to enhance the cooperative nature of the agreement.
The States consider that it is important to ensure that the referral is reviewed after a period of time. Accordingly, the Commonwealth and the States agreed to insert a sunset clause to allow termination of the referral after five years.
The referral can be extended by agreement. The cooperative approach at todays meeting is evidence that all States and Territories recognise the importance of long term certainty for corporations law in Australia.
The Commonwealth will continue to examine the option of a constitutional amendment. We have been working on identifying the broader constitutional options for supporting cooperative arrangements since before the decision in re Wakim. However, the Hughes decision created a pressing need for a more immediate solution.
To have todays agreement in place by January 2001, the Commonwealth aims to introduce the necessary legislation in the Commonwealth Parliament before the end of the year. This would require the introduction and passage of State legislation before the end of the year.
This is an historic agreement that will provide constitutional certainty for corporations law. This outcome is another step towards Australia positioning itself as a centre for global finance. The Commonwealth welcomes the outcome, which will benefit business, consumers and all Australians.