Australian Motoring Enthusiast Party Senator Ricky Muir wants to put an end to an anachronistic list of companies (including, notably, Turnbull & Partners — yes, that one) that don’t have to report full financial information to the corporate watchdog.
As Bernard Keane reported yesterday, an exemption introduced by Paul Keating in 1994 with new corporations law allowed around 1500 large privately held firms to be “grandfathered” from being forced to lodge full financial statements with the Australian Securities and Investment Commission (ASIC). The list of these companies was released for the first time this week, and it includes, notably, Turnbull & Partners, a firm that Prime Minister Malcolm Turnbull said in question time yesterday should no longer be on the list:
“It has remained on the list of exempt proprietary companies, but it really should not be on the list at all because it is not a large company anymore and it does not meet any of the tests of being a large company. In fact, it is a relatively small company. In any event, it is a passive investment company, as you would expect, and is, I suppose, a remnant of the investment banking partnership and business I operated so many years ago. So we will be writing to ASIC to make sure that it is no longer left on that list of large, exempt proprietary companies.”
As the Prime Minister noted, the list is largely a historic relic, and it still includes a number of companies that have either been bought out by other companies or have been publicly listed. For example, offshore detention services company Transfield is on the list, despite it now being a public company. Radio stations 2UE and 4BC are also still on the list, even though they were bought out by Fairfax many years ago.
Being on the list can be a valuable asset for companies. If the unlikely event these companies were to trade trade under their own names again privately, they would be able to again enjoy the luxury of not being required to lodge full financial statements with ASIC.
Muir is pushing for the grandfathered list to be removed, so that the companies on the list comply with ASIC financial disclose requirements. These companies would also then be listed by the Australian Taxation Office under transparency laws. A spokesperson for Muir told Crikey that if the government found a way to include these transparency measures in the multinational tax legislation in the Senate, he would support the legislation to pass. The spokesperson says the proposal is seeking to strike a balance between public interest and privacy.
Labor has been seeking to ensure that even companies that do not disclose to ASIC are required to report through the ATO, which would have all the tax data on those companies at hand.
That multinational taxation legislation was voted down by the government in the House of Representatives earlier this month after the Senate passed legislation to undo legislation passed earlier this year that would have removed a requirement for privately held Australian companies to disclose their tax information to the public if they have revenues of over $100 million. Some privately held businesses had been lobbying the government to have the reporting requirement removed due to the bizarre claim that transparency increased a kidnapping risk for owners and their families.
It was due to return to the Senate this week for another attempt at passing it without the tax transparency amendments put in by Labor, but after Muir’s proposed amendments, it has not been listed for debate today.
A spokesperson for Treasurer Scott Morrison did not respond by deadline.