The Minister for Financial Services & Regulation, Joe Hockey, today rejected Labors amendment to a corporations law Bill that aims to protect employee entitlements.
"The Government cannot accept an amendment that would make one company within a group liable for the debts of another company in the same group," the Minister said.
'This amendment will hamstring companies, create uncertainty, exacerbate contagion within groups and affect the flow of capital into Australia. What is more, this uncertainty and greater risk will obviously discourage investment in new ventures."
The amendment to the Corporations Law Amendment (Employee Entitlements) Bill 2000 will be returned to the Senate.
The Minister said a previous Labor government rejected a similar amendment in a response to the Australian Law Reform Commissions General Insolvency Inquiry of 1988.
The Australian Shareholders Association has indicated that interference with the principle of limited liability should not be undertaken lightly and that the amendment should be deferred at least until the Companies and Securities Advisory Committee has reported on this issue and their report has been given proper consideration.
The Australian Institute of Company Directors has indicated they are strongly opposed to the amendment. AICD has requested the Bill not go ahead with this amendment given the potential for it to seriously undermine business confidence, employment and economic activity.
"I call on the non-Government parties to reconsider their position on this amendment so the Bill can be passed without more delay.
"Labor's ill-considered amendment just means delay to the original Bill - a Bill that aims to better protect employee's entitlements."