STATUTES AMENDMENT (DIRECTORS' LIABILITY) BILL

Committee Stage

In committee.

Clauses 1 to 3 passed.

Clause 4.

The Hon. S.G. WADE: As I raised during my second reading contribution, the opposition and key stakeholders in the industry have serious concerns that this bill imposes criminal liability by regulation. This clause is the first clause that does that in proposed section 34(5). It is currently a matter of debate as to whether the law allows this to occur already, so there are two choices in terms of the way the legislation could go: to clarify that the regulations can impose liability or to clarify that they cannot. The government and the opposition have divided on each side of that question. The government believes that the regulation should be able to impose criminal liability but we in the opposition do not.

At this point, I advise the committee, as I have advised the government, that I will be moving to report progress at this point in the bill. In that context, I was concerned to hear the suggestion that we might be moving to an amendment because, as members would know, the fact that I am moving to report progress will mean that there is no capacity to debate that and it will be a matter as to whether the committee is inclined to accept my argument for reporting progress.

The reason I am proposing that we report progress is that this question of reporting progress could be a test vote for whether or not the committee wants to consider a set of amendments that would remove the possibility of establishing criminal liability by regulation. Parliamentary counsel is in the process of drafting regulations to that effect but they have not been made available to me and therefore have not been made available to the council. I suppose we could save parliamentary counsel as well as this committee time and expedite the bill if in fact we find that the committee is not attracted to removing that capacity, in which case the bill could progress without amendment. So I am proposing that members might treat this vote on reporting progress as a test clause, for want of a better word, on the issue of whether or not they want to consider amendments that would make it clear that we want to remove the capacity to establish criminal liability by regulation. If members could be interested in removing that opportunity to create criminal liability by regulation, I would urge them to support the motion to report progress.

Let me briefly explain why the opposition has come to its view and why members, if they share our concerns, should support progress being reported. When the committee resumes consideration of the bill, even if members support reporting progress, it can, of course, still oppose the amendments. The opposition's view is that the imposition of criminal liability is a serious matter and has a serious effect on people's lives. Accordingly, it should be decided by parliament. We have not simply come to this conclusion because we think it is fundamentally unfair that criminal liability can be imposed on directors at the sole whim of a Labor cabinet issuing a regulation. We have also come to this view because we have listened to stakeholders.

We have listened to major stakeholders who have contributed to our consultation on this bill and urged us to have criminal liability spelt out in the act, not by regulation. If we leave it to the regulations, it is our view that we are saying to industry that we are prepared to avoid our responsibility to ensure appropriate parliamentary oversight of the imposition of criminal liability. The Law Society is one such stakeholder that opposed the imposition of criminal liability by regulation. It stated, in a letter to me:

The society opposes the imposition of criminal liability by regulation. Although regulations are subject to the scrutiny of parliament, the society suggests that in practice that scrutiny is less than is afforded to a bill. Criminal liability, and especially derivative liability, deserves the full attention of parliament.

The Australian Institute of Company Directors is another key stakeholder that opposes liability by regulation. It says:

We are fundamentally opposed to director liability provisions (particularly those that may reverse the onus of proof and which are contrary to fundamental principles of criminal law) being made by way of regulation making. If further director liability provisions are to apply in South Australia, their insertion should be the subject of rigorous parliamentary scrutiny and debate. We recommend that these provisions be removed as a matter of priority.

We have heard from the Joint Legislation Review Committee of the CPA Australia Chartered Accountants and Institute of Public Accountants. They too have expressed their concern, saying:

While the bill seeks to ensure consistency in the acts themselves, in many cases, it paves the way to inconsistency in the regulations being similar to the very flaw that the legislation proposes to remedy.

Parliamentary counsel is drafting amendments on behalf of the opposition as we seek to remedy this inconsistency in this flawed policy. So I ask members, if they support the opposition's view, the view of the Law Society, the view of the AICD and the view of the CPA, Chartered Accountants and Institute of Public Accountants that criminal liability should not be imposed by regulations, that they support my motion to report progress. I ask members, even if they are yet to be convinced on this issue, that they support the reporting of progress to give the appropriate time to receive and consider the opposition amendments.

I understand the government would like to comment on these suggestions, so I therefore propose to pause before I move my motion to report progress.

The Hon. G.E. GAGO: I am sympathetic, to a certain degree, with the Hon. Stephen Wade. He has indicated for quite some time that he wanted to table amendments, but we still have not seen those amendments. I think for the last two lots of parliamentary sittings the government has indicated that this is a priority bill, yet we still fail to be able to progress it.

The government will not be able to progress the bill this afternoon. We will support a motion to report progress, but not as indicative of any support to the proposal that the Hon. Stephen Wade is putting before us. We do not indicate in any way, shape or form support for his proposed amendments, but rather that we need to see the detail of those amendments and the Attorney-General needs an opportunity to consider those.

Again, I can only express disappointment at the failure of this house to keep up with government business, even given the extraordinary amount of notice we give honourable members in terms of indicating our priorities, to enable members to come prepared to do the job we are paid so well to do.

The Hon. S.G. WADE: I will only briefly allude to the fact that the government has tabled amendments at 3.22 this afternoon to a bill that it wanted to rate as a higher priority to this one. I will not engage in that debate.

I thank the minister for the indication of government support for reporting progress. I assure the house that we are doing everything we can to expedite matters; that is why we actually proposed a test clause. I appreciate the minister's comments that the government will be supporting the reporting progress but they would not want that to be misinterpreted, so in that context, could I suggest to the Chair that the government may wish to report progress so that it cannot be misinterpreted. So, if you report progress, then there is no implication—

The Hon. G.E. Gago: You're playing games.

The Hon. S.G. WADE: Okay, I withdraw the offer.

Members interjecting:

The CHAIR: We are in robust agreement over reporting progress.

Progress reported; committee to sit again.