A coalition of peak business, legal and accounting bodies has called on state governments to refer to the Commonwealth powers to deal with uncertainty surrounding Australia’s Corporations Law following a series of recent High Court decisions, culminating in The Queen v Hughes.
A letter from the Business Council of Australia to state premiers calling for the referral of powers, which was released today, has been supported by the Australian Institute of Company Directors, the Law Council of Australia, the Securities Institute of Australia, the Institute of Chartered Accountants in Australia and the Investment and Financial Services Association.
The letter, written by Business Council President Mr Campbell Anderson, says the uncertainty is already having a significant impact on business activity in Australia.
“… there is a real possibility that a further adverse High Court ruling could cause chaos for many Australian corporations,” the letter says.
“The uncertainty, and the failure to resolve the situation quickly, will also undermine Australia’s international business and financial reputation.”
“Failure to resolve the current uncertainty and confusion could significantly compromise the administration of large areas of business law, including such fundamental areas as the operation or formation of companies.”
In the letter, Mr Anderson says a number of responses have been proposed, but the referral of powers to the Commonwealth provides the most realistic and arguably only immediate answer, and would provide relative certainty in the administration of the national Corporations Law scheme.
“Alternatives to the referral of power do not provide realistic solutions to the uncertainty and confusion that currently exists,” the letter says.
“…We do not advocate the referral of power lightly, nor do we underestimate the complexity of the task. It is imperative, however, for businesses to operate effectively in Australia, and for our international reputation, that the current uncertainty be addressed as soon as possible.”