Commonwealth of Australia Explanatory Memoranda

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CLASSIFICATION (PUBLICATIONS, FILMS AND COMPUTER GAMES) AMENDMENT BILL 2006

                                                                               5234-EM




Corporations Amendment (Takeovers) Bill 2007

(Supplementary Explanatory Memorandum for amendment on sheet 5234 to be moved
by Senator Murray on behalf of the Australian Democrats in Committee of the Whole)



On Friday 23 March 2007 the Minister for Workplace Relations was reported as
telling journalists outside the Australian Mines and Metals Association's conference
in Perth that:
         "[Unions] of course don't have the same accountability [as corporates] - they
         don't disclose how much union executives are being paid, they don't go to
         members and ask them whether they can contribute millions of dollars to the
         Labor Party.

       "They don't have the same disclosure arrangements as corporate Australia.
       They don't have the same fiduciary obligations to act in the best interests of
       the company - or the union movement - as corporate Australia, and that's
       something that I think needs to be addressed."

This statement leads me to conclude that there is now acceptance in the Government
for reform in this governance area. The Corporations Amendment (Takeovers) Bill
2007 is the earliest legislative corporate law vehicle available to effect such reform.

The Minister seems unaware that corporates do not have to gain shareholder approval
for political donations, and that most do not. I have raised this issue several times
since 1996. I drew attention to this matter in my Minority Report on the Joint
Standing Committee on Corporations and Financial Services May 2004 report into
CLERP 9, and I subsequently unsuccessfully moved an amendment reflecting my
recommendation, to the Corporate Law Economic Reform Program (Audit Reform
and Corporate Disclosure) Bill 2003 - see Hansard 17 June 2004 pp24138/42.

I have [again] drawn attention to the need for companies making political donations
without shareholder approval, and unions making political donations without member
approval, and suggested the remedies for this - see my Supplementary Remarks to the
Joint Standing Committee on Electoral Matters September 2005 Report of the Inquiry
into the conduct of the 2004 Federal Election and Matters Related Thereto.

Item 1: the amendment provides for the prohibition of gifts and political donations by
companies, unless the political donation is authorised by a resolution passed at a
general meeting by a majority of shareholders of the company; or, unless the political
donation is made in accordance with a shareholder approved donation policy.