House of Representatives

Second Reading Speech

Mr Ripoll (Parliamentary Secretary to the Treasurer)

Today, I introduce a Bill that will close the Financial Reporting Panel because of lower than expected referral rates.

In 2006, the Panel was established to resolve contested issues between the Australian Securities and Investments Commission (ASIC) and reporting entities, over the application of accounting standards to financial reports.

The Panel was designed to represent a less expensive method of resolving these disputes and allow matters to be heard by persons with particular expertise. The establishment of the Panel formed part of wider reforms to improve the operation of the market, by promoting transparency and accountability.

However, only five cases have been referred to the Panel since its establishment in 2006 and none have been referred since August 2010. One of these cases was resolved before the matter was heard by the Panel.

It is important to note that the Panel's findings were not intended to be legally binding on either ASIC or the company. Companies have always had recourse to the Court where there is disagreement with ASIC over the application of accounting standards to financial reports. Companies will continue to be able to challenge the application of accounting standards to financial reports through the legal system after the passage of this Bill.

I note that the Bill contains a transitional provision to allow courts and tribunals to continue to have regard to any past report by the Panel despite its closure.

Finally, I can inform the chamber that the appropriate approval of the Ministerial Council for Corporations has been obtained as required under the Corporations Agreement.