Helen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | Hansard source

We are addressing the Cross-Border Insolvency Bill 2008. Its purpose is to implement the model law on cross-border insolvency developed by the United Nations Commission on International Trade Law. The Hon. Chris Pearce MP, the former Parliamentary Secretary to the Treasurer, introduced the Cross-Border Insolvency Bill 2007 on 20 September last year; the bill lapsed on the calling of the election. The Cross-Border Insolvency Bill 2008 is identical to the Cross-Border Insolvency Bill 2007. Obviously, in these circumstances, the opposition supports passage of the legislation.

I do not feel that I am called upon to delay the Senate unnecessarily on the detail of the bill, save to say that I think it is very much an uncontroversial bill and very well supported, not only in the parliament but also in the broader business community. Insolvency laws are among the most important—indeed, they are of critical importance—laws governing market conduct, and we know that they enhance both certainty and integrity in the market and promote economic stability and growth.

There are a number of very complex issues, as we see repeatedly, that arise in the press and elsewhere in the context of cross-border insolvency. An insolvency administrator may have limited access to assets of the company that are located in another country. There may be, for example, special rules providing local creditors with access to local assets before funds go to a foreign administration. There may be limited or no recognition of foreign creditors. There may be inconsistency in the priority of creditors, particularly in relation to the ranking of employee claims across jurisdictions. And there may be difficulties for foreign creditors seeking to enforce their securities over local assets. That gives rise to uncertainty, risk and untimely cost to businesses.

We were of the view, when we were in government, that it would be of overall benefit to businesses in all countries to have adequate mechanisms in place to deal both efficiently and effectively with cross-border insolvencies. Reforms of this nature are simply critical to facilitating international trade in goods and services and to the integration of national financial systems with the international financial system. So, based on the model law, we developed the legislation. We are pleased that the government has seen fit to bring it forward and we will be supporting it.

(Quorum formed)