Page 4801 - Week 13 - Thursday, 28 November 2019
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However, recently there have been some good signs. Over the past year or two there has been an increasingly proactive approach on building enforcement from the government covering both building quality and regulatory compliance. This brings me to an important point. As we all know here, or hopefully we all know here, legislation is not enough without strong enforcement to make actual change.
If this legislation had come to the Assembly 2½ years ago, my view would have been, “Well, it is strong legislation but it will be useless because it is never enforced.” Now I think that there is at least a possibility that it will be enforced. The impression I get from talking to the Minister Ramsay’s office about this is that they have some ideas in mind of how it might actually be used.
Looking at the legislation we are voting on today, my first point is that basically all the attention has been focused on a few controversial elements. But the bulk of this bill is actually made up of smaller, but important, changes that will significantly strengthen our regulatory system and allow the regulator to work more efficiently. The rectification undertakings, for example, are a significant step forward and will be immediately useful once they are in place.
Given the serious building defects our community is facing, it is important to get these non-controversial changes in place quickly. I regret that this is a bill that has a lot of stuff which is eminently sensible, and I am sure would have had tripartisan agreement, and a smaller amount that is hopefully also sensible, but does not have tripartisan agreement. I think that it is a pity that this was not approached with two separate bills and more time given for the controversial parts.
I will now talk about that part of the legislation that relates to director liability. I could spend some time discussing the structure of corporations and whether or not company structures are a prime reason for unsustainable growth, but I am sure that members will be very pleased to know I intend to concentrate on the legislation at hand. Historically, directors have duties to the company, not to the community. In general, if a director acts in good faith, not in self-interest and is not negligent or fraudulent, then they will not have personal responsibility for the actions of a company.
Over more recent years, though, legislation has broadened individual director’s responsibilities because of various abuses of company structures. We have had the situation that a company can do things without suffering the consequences that a person would if they did the same things. There are now a significant number of federal, state and territory laws which make directors liable for the actions of their companies. For example, as we all know, directors can be held liable if a company does not pay its tax or in some circumstances when it becomes insolvent. In some cases also they are liable if it causes environmental damage.
Directors have a duty of due diligence to ensure that their business complies with workplace health and safety obligations. If there are serious breaches it is possible that a director could even be imprisoned. So this legislation is not actually an unprecedented extension of director liability. It is aiming, as has been done in other legislation, to extend the responsibility past the collective company structure and sheet it home to an individual.
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