MR HUMPHRIES (continuing):

Mr Speaker, the Duties Amendment Bill 2001 amends the Duties Act 1999 to take into account Commonwealth changes to the Corporations Law.

By way of background Mr Speaker, the Corporations Law scheme commenced on 1 January 1991. Under that scheme, the Corporations Law is contained in an Act of the Commonwealth Parliament, namely the Corporations Act 1989, and is also enacted for the ACT. Laws of each State and the Northern Territory apply the Corporations Law of the ACT as a law of the State or the Northern Territory. The scheme was designed to operate as a national scheme even though it actually applies in each State and the Northern Territory as a law of the state or territory.

The current Corporations Law scheme was therefore intended to establish a seamless and efficient system of adjudication by, among other things, allowing federal courts to exercise relevant State jurisdiction and State courts to exercise relevant federal jurisdiction.

Mr Speaker, recent decisions of the High Court have cast doubt on the constitutional foundations of important elements of the Corporations Law scheme which have resulted in much uncertainty and inefficiency in relation to Australia's system of national corporate regulation.

Mr Speaker, the Commonwealth has determined that these problems can be avoided by re-enacting the Corporations Law as a single federal law of national application.

The Commonwealth's Corporations Bill 2001 (Corporations Bill) will achieve this by replacing the Corporations Act 1989 and the Corporations Law of the ACT, and the corresponding legislation of the States and the Northern Territory.

Under the proposed Corporations Bill, as all companies will be incorporated under a single Commonwealth Act instead of under one of the existing Corporations Laws, the existing nexus for applying stamp duty on marketable securities ie. based on the jurisdiction in which the company that issued the shares is incorporated or registered, will no longer be valid.

Mr Speaker, the Commonwealth is aware that some State and Territory legislation relies on companies being incorporated in a particular State or Territory, for example, in determining duty on share transfers. In order to facilitate the continued operation of State and Territory legislation, the new Commonwealth legislation will provide for companies to be "taken to be registered" in a State or Territory.

Existing companies will be "taken to be registered" in the State or Territory in which the company was registered immediately before commencement of the Corporations Act 2001. In addition, new companies will be able to nominate a jurisdiction in which they will be "taken to be registered". Mr Speaker, this will maintain the status quo where companies can nominate the jurisdiction in which they are incorporated.