Senator IAN MACDONALD (Queensland) (20:18): Thank you, Mr Deputy President. I appreciate that. I can barely remember that long ago, but they were interesting times.
The Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill 2017 relates to an amendment of Australia's insolvency laws. It tries to redress the current insolvency laws which put too much focus on stigmatising and penalising failure. The reforms in this bill will help remove some of that stigma, promoting a culture of entrepreneurship and innovation, driving business growth and saving jobs.
I have some interest in this bill, which I will speak about shortly, but I do hope that Senator Wong, the Leader of the Opposition in the Senate, is listening to me, because clearly she didn't listen to my last speech on the communications package, where I spent most of my speech advocating for the National Women's Basketball League to make sure that they got proper recognition from pay TV. Part of the package is to put $30 million into the promotion of unique sports, sports that aren't as regularly seen, particularly women's sports, and I was very keen to speak about that. But, for some reason, the Leader of the Opposition in the Senate, Penny Wong, criticised me for that and accused me of filibustering. If I was filibustering in supporting Townsville Fire, the best National Women's Basketball League team ever, then can please I do that all the time? It had nothing to do with filibustering, Senator Wong—if I may, through you, Mr Acting Deputy President, respond to Senator Wong's ungracious attack on me. I was trying to promote women's basketball in Australia.
I'm just wondering what Senator Wong has against women's basketball in Australia and what she has against the leading team in the National Women's Basketball League. To accuse me in my speech on the Townsville Fire as simply filibustering is not only something that I resent, but I am sure the people of Townsville and particularly those associated with the Townsville Fire, the most successful national women's basketball team in the national competition ever, will also be offended by Senator Wong's baseless accusation.
Senator Wong also obviously didn't listen to me when I was talking about the ABC. I was delighted to hear Senator Fifield say that the legislation will include legislation requiring what I call the UBC, the Ultimo broadcasting corporation, which used to be the Australian Broadcasting Corporation, to have fairness in their approach to the presentations they make. That is slightly off subject, Mr Acting Deputy President, but I do hope Senator Wong is listening to me on this bill because, quite clearly, she didn't listen to me during my last speech when she accused me of filibustering when all I was doing was promoting meeting women's basketball in Australia. I cannot understand why Senator Wong would be opposing that or criticising me for highlighting what a wonderful sport it is and how the communications package will actually help women's basketball in Australia and will bring about fairness, which we all thought was part of the charter of the old Australian Broadcasting Commission, now the Ultimo broadcasting corporation.
But, Mr Acting Deputy President, I digress only slightly from the bill before us, the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill 2017. Part (1) of this bill will create a safe harbour for honest and diligent company directors from personal liability for insolvent trading if they're pursuing a restructure outside formal insolvency. I listened with some intent to Senator Gallagher's presentation on behalf of the Labor Party, and I'll be interested in some of the amendments that they're proposing. The two-year review seems to have some merit to it. So I will watch that debate carefully.
The Labor Party talked about workers' entitlements, and I'm hoping that none of the amendments will in any way support Clive Palmer, who indirectly is responsible for the Labor Party receiving the vote it received at the last federal election. You will remember that Mr Palmer was the director of Queensland Nickel Industries, QNI, which had its nickel refinery up in Townsville, and left the refinery owing some $80-odd million in workers' entitlements, which the Turnbull government has paid out, thanks to legislation that the Liberal-National government under Mr Howard introduced to make sure that workers would not be the losers and that, if something like the QNI collapse happened, the workers would not miss out. The taxpayers, through the federal government of Mr Howard, originally, and now Mr Turnbull, will make sure those workers receive their just entitlements.
Of course I remember how Mr Palmer was the card in the pack that completely mistook the 2013 election. I remember how the Labor Party and their allies, including Mr Katter in Kennedy, were only elected because of the preferences of Mr Palmer. I well remember that Mr Palmer's money, which he apparently—I shouldn't say this because I understand it is before the court. But let me say that some people allege Mr Palmer siphoned money out of QNI into his political party that not only elected him; it elected Senator Jacqui Lambie and former senator Glenn Lazarus to this parliament. So the workers of Townsville, and ultimately the Townsville taxpayers, by the transfer of that money from QNI to the Palmer United Party, saw Senator Lambie elected to this parliament from Tasmania. Nobody knew her. She was only elected because of Clive Palmer's money and the particular notoriety he had at that time. He stood for election and got himself elected. He got Senator Lambie elected and also the thankfully former senator Glenn Lazarus. Neither of them, I might say, showed any loyalty to Mr Palmer once they got in on his millions. They left his party and left poor old Clive floundering in the dark. I'm hoping none of the Labor amendments to this bill dealing with workers' entitlements would in any way support the sorts of activities that Mr Palmer engaged in a few years ago.
By contrast, a long time ago, before I was in this chamber, I was a solicitor in practice in a small country town. I occasionally had clients who ran wonderful businesses and employed a lot of people. But, because of some banking arrangements at the time, the business that for years had been the leading business in my hometown had run into some financial difficulties. It was not that they were in a situation of not being able to get out of it, but the bank at the time—and I don't want to mention the name of the bank, because it's a bank that I have criticised in other areas in recent times in the Senate—insisted on putting this group of companies into liquidation. I wasn't this man's solicitor at the time; I was actually in parliament at the time and I had severed my connection with the legal practice that was this person's legal adviser. But I do know that this person wanted to trade out of the difficulties. I know, because it was my town and my community that I had worked in for years, that he could have done that. He could have arranged to get his group of companies out of the difficulties. It would have taken a little bit of time and a little bit of readjustment, and the best person to do that was the managing director. He and his family owned the company, but he and his family would have been able, given some latitude from the bank, to get the company out of the difficulties. I always thought how stupid it was at the time that the bank, using the law that it did at the time and the law being what it was at the time, made it impossible for this person to trade the company out of difficulties. As a result, the bank lost a lot of money; the Australian Taxation Office lost a lot of money. I have to say most of the other creditors in the local community were paid out one way or another. So it achieved nothing.
I'm hopeful that this bill that will create a safe harbour for honest and diligent company directors to save them from personal liability for insolvent trading would have been appropriate had it been in place 30 or so years ago. If they were pursuing a restructure outside of formal insolvency, then this bill, had it been in place then, would have protected directors from personal liability for insolvent trading. With the introduction of the safe harbour, directors will be able to remain in control of the company. And, as I've just mentioned, they are probably the best ones to be in control of the company because they know what it's about. Particularly in a small country town, if you bring in outside liquidators and managers, they, of course, have no idea of the particular business or how it works. So this legislation will allow directors to remain in control of the company and to take proactive steps to restructure a company when that is reasonably likely to deliver a better outcome for creditors, employees and shareholders. If that's what this legislation does, it is very good. I only lament that it wasn't like this years ago. I mentioned one instance but I was aware of other instances where allowing directors to remain in control of the company and to take proactive steps to restructure a company, when that would have been reasonably likely to deliver a better outcome for creditors, employees and shareholders, would have been appropriate. It would have been better for everyone had this law been in place 30 or so years ago.
The safe harbour provisions contain safeguards to deter illegal phoenixing. For example, a safe harbour would not be available to a director of a company which failed to pay its employees' entitlements, did not fulfil its tax reporting obligations or kept information or financial records from an insolvency practitioner during any formal insolvency that occurred after the attempted restructure. So this bill has safeguards and it moves in what, I think, is a long overdue direction.
Part 2 of the bill will also make ipso facto clauses unenforceable during and after certain formal insolvency procedures. An ipso facto clause in a contract can allow the contract to be terminated for the sole reason that one party is, or might become, insolvent. This could happen even if all other contractual obligations are met—for example, even if payments are still being made on schedule. I wasn't a practitioner in insolvency, but clients of mine in the old days fell into situations where this clause, as amended, would have been very useful to them in being able to trade out of their difficulties and making sure that the fewest people suffered from any collapse of the business.
The stay of ipso facto clauses in part 2 will create a breathing space for a company to continue to trade through formal insolvency and improve its chances of being turned around. It will protect asset values for the benefit of the company, and that's particularly important. Too often, when liquidators come in, they sell assets for whatever is the easiest to get and whatever is the easiest to put money in the pocket of the insolvency expert, I might say.
This clause will protect the asset value for the benefit of a company and its employees and its creditors, and it will remove a deterrent to entrepreneurs who might otherwise invest to turn that particular company around. Broadly, the safe harbour and ipso facto measures encourage Australians to take a risk, to leave behind the fear of failure and to be more innovative and ambitious. More often than not, entrepreneurs will fail several times before they experience success and will usually learn a great deal throughout the process. Helping these entrepreneurs succeed requires both a legislative and a cultural shift.
These sorts of laws, I think, are long overdue. They can make sure, where a business is failing, that it has the very best chance to continue to operate in such a way that if it eventually fails, the least people possible suffer. They can make sure that directors who know the business, who are the best ones to understand what's happening and to understand the local market, are left in charge without fear of breaching the insolvency laws. So this amendment bill can only be positive. As I say, I look forward to hearing more about the Labor Party's amendments. Some of them seem to be appropriate, but it is a bill that I think does deserve the support of the Senate.