Submission update: Senate reports released on DINs and anti-phoenix bills
The Senate Economics Legislation Committee (Committee) recently handed down reports on a two reform packages that will impact insolvency practice.
Commonwealth Registers Bill 2019 & 4 related bills
The first report related to a package of bills which introduces the Commonwealth’s Modernising Business Registers program and the Director Identification Number (DIN) regime.
As members will be aware, ARITA has been at the forefront of advocating for the introduction of a DIN regime into Australian law. ARITA has also been strongly advocating for improvements to Australia’s business registry systems, including the provision of searches free of charge to registered liquidators and registered trustees.
The legislative package considered by the Senate Economics Legislative Committee involved the following 5 bills:
- Commonwealth Registers Bill 2019
- Business Names Registration (fees) Amendment (Registries Modernisation) Bill 2019
- Corporations (Fees) Amendment (Registries Modernisation) Bill 2019
- National Consumer Credit Protection (Fees) Amendment (Registries Modernisation) Bill 2019
- Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2019
The objectives of the package are to:
- create a new Commonwealth business registry regime, which will come under the control of a new registrar (as opposed to ASIC)
- make amendments to the Corporations Act 2001 (Act) to introduce DINs.
ARITA provided a number of submissions at various stages of the consultation process for this bill package (copies of which are available at or previous updates and summary of our 2018 submissions). A number of points raised in ARITA’s advocacy work were ultimately reflected in the bills as presented to the Parliament.
In addition to the submission John Winter and Natasha McHattan gave evidence before the public hearing of the Committee held on 13 March 2019.
ARITA’s advocacy stressed the following points:
- the need for open and free access to business data
- the likely benefits of the DIN regime, especially as a tool to combat illegal phoenixing
- the need for a better understanding of the proposed timetable for the modernised register and the details to be included.
The Committee in its report made the following recommendations:
- The Government review the ASIC registry technology in order to assess its continued suitability and the possible need for its replacement.
- That the operation of DINs be reviewed two years after introduction to ascertain effectiveness.
- That the bills package be passed, although the Labor senators included a suggestion that the bills be passed 'only if the business case is made public and sufficient time is given to consider the details'.
Read the report in full
Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019
The other key bill considered by the Committee was the bill to introduce specific phoenixing provisions into the Act to try to combat the costs of illegal phoenix activity.
ARITA also provided a number of submissions during the various consultation programs concerning this bill. While supportive of the need to actively address illegal phoenix activity, ARITA’s advocacy stressed the following points:
- That registered liquidators are at the front lines in terms of investigating and shining a light on illegal phoenix activity.
- There are a number of existing mechanisms within the Act which cover illegal phoenix activity, what is needed is a sufficient focus on enforcement action to have a deterrent effect.
- A welcome narrowing of the scope of the proposed creditor defeating disposition definition, but also noted some problems with the details of the bill.
There were no public hearings held by the Committee for this Bill, however, 21 submissions were filed.
The Committee report recommended that this bill be passed. It also noted (at [2.77]) the current government’s existing announcement of additional funding for the ASIC Assetless Administration Fund ($8.7 million over 4 years from 2018/19).
Read the report in full