NO.029

QUEENSLAND’S CORPORATION LAW PROPOSAL TURNS BACK THE CLOCK

Premier Beattie’s proposal to return to a State-based system of corporate law sits oddly with the outcome of the 5 November 2004 meeting of the Ministerial Council for Corporations, where State and Federal Ministers unanimously endorsed a five year extension to the current references of corporations and related power from the States to the Commonwealth.

As a consequence, the Commonwealth and the States have already agreed to extend the current arrangements from 2006 to 2011.

Not only does the Commonwealth administer and regulate corporations law at no cost to the States, it pays the States compensation for the profit they used to receive when they administered companies and used company fees as a revenue raiser. If the current arrangements were to end, the States would lose these financial bonuses worth $160m in 2004-05. These bonuses are indexed and paid annually.

If the Queensland Government believes that returning to a State-based system for corporations law is a real possibility, it should inform businesses of the consequences. Queensland companies, when operating beyond Queensland borders, would be required to be recognised as foreign companies with new regulation fees and a multitude of different regulators.

MELBOURNE
11 April 2005