Review of Arrangements for Registration of Senators’ Interests
The
Committee of Senators’ Interests reports to the Senate pursuant to standing
order 22A(1).
Background
On
15
September 2003, the Senate
agreed to changes to the resolutions relating to senators’ interests and the
declaration of gifts that had been recommended by this committee in its second
report of 2002.[1] One of the changes was
that senators be required to lodge a full statement of interests within 28 days
after the first meeting of the Senate after 1 July first occurring after a
general election. Previously, senators had been required to lodge a full
statement at the beginning of their six year term. The change therefore required
all senators to lodge a full statement approximately once every three years
following the swearing in of each new Senate.
A
general election was held in October 2004 and senators elected at that election
began their terms on 1 July 2005. The first meeting of the Senate after that date was 9 August and full
statements from all senators were therefore due within 28 days of that date.
This was the first occasion since the resolutions were adopted in 1994 that all
76 senators were required to lodge full statements. Consequently, in October
2005, the committee agreed that it was an appropriate time to review the
registration requirements, particularly given the large number of new senators
who were sworn on 9 August and were encountering the registration
requirements for the first time.
The
committee decided to survey all senators on their experience in complying with
the resolutions and invited comment on the ease of use of the forms, the
usefulness of the explanatory notes or on any other matter connected with
completing the statements of interests or providing notifications of
alterations of interests within the specified timeframe. The committee
indicated that it did not propose to publish individual responses and it also
provided a survey form with some specific questions to facilitate senators’
responses. Thirty senators (or 40% of the total) responded, most using the
survey form provided. Compared with the very small proportion of senators who
had responded to the committee’s first review of arrangements in 1995 (6.5%),
the committee considered that the level of response was gratifying and provided
a reasonable basis for considering any changes. It should be emphasised, however,
that the survey responses did not disclose any significant problems with either
the requirements of the system or its administration.
A
summary of the survey results is at Appendix 1.
Changes to the forms
In
light of responses to the survey, the committee agreed to make minor changes to
the forms for registration of interests. Among the changes are the inclusion of
examples to illustrate categories of registrable interests, and the inclusion
of some additional information on Form B (concerning the interests of a
senator’s spouse, partner or dependent children).
Pursuant
to Registration of Interests resolution 1(1), the committee has determined new
forms which are included at Appendix 2. These forms have been published on the
committee’s website and take effect immediately.
Explanatory Notes
The
committee has also made some changes to its explanatory notes. These changes do
not alter the interpretation of the resolutions as previously determined by the
committee. Rather, they provide supplementary information on a small number of
topics which are discussed further below.
The
revised explanatory notes are included at Appendix 3.
Self-managed
superannuation funds
One
of the topics on which the committee has supplemented its explanatory notes is
in relation to self-managed superannuation funds. The need for clarification
was raised with the committee by an individual senator and the committee agreed
that, given the variety of superannuation arrangements now employed by senators
and their spouses or partners, it was timely to focus on this issue. Following
deliberation, the committee confirmed that self-managed superannuation funds
should be registered as an asset under item 9 (‘the nature of any other assets (excluding
household and personal effects) each valued at more than $7,500’). Furthermore,
the committee agreed that the shareholdings of a self-managed superannuation
fund should be registered under item 1 (‘shareholdings in public and private
companies (including holding companies) indicating the name of the company or
companies’), consistent with the requirement to register shares held by a
family or business trust, a nominee company or partnership in the circumstances that the
owner of the self-managed fund is able to exercise control over a right to vote
or dispose of those shares (emphasis added).
The committee has amended its explanatory notes accordingly.
Shareholdings in public and private companies
The committee has had the issue of registration of
shareholdings in public and private companies under review for some time, as
reported in its 2005 annual report (Report 1/2006). The committee’s views were
sought by the Procedure Committee, in connection with its inquiry into the
issue of the adequacy and appropriateness of the register of senators’
interests, on a proposal to alter the timeframe for notifying changes in
shareholdings from 28 to 60 days. The committee responded to the Procedure
Committee that it found no sound case for altering the existing timeframe but
undertook to consider the matter further in the context of its consideration of
responses to the survey.
The committee received only one substantive comment
on the issue of the timeframe for registering changes in shareholdings, suggesting
that few senators are affected by the perceived difficulty of compliance with
the timeframe. Nevertheless, the committee appreciates the difficulties faced
by some senators in complying with the resolution that requires notification of
any alteration of interests within 28 days of the alteration occurring and, in
accordance with its undertaking to the Procedure Committee, has considered the
matter further.
The difficulties appear to be two-fold. First,
senators who deal directly through a stockbroker but who live in outlying
regions or travel frequently on Senate business may not receive timely
notification of the registrable trade simply because they do not have timely
access to their personal mail. Secondly, senators who use a third party
financial agent or product may receive only periodic reports of the registrable
transactions which have been undertaken on behalf of the senator by the third
party financial agent or product.
The committee also recognises that in the twelve
years since the resolutions were agreed to there have been profound changes in
the investment environment, partly as a result of the growth in superannuation
funds and, so far as the impact on senators is concerned, the closure of the
old parliamentary superannuation scheme to new members. Increasingly, senators
and their spouses or partners will face a wide range of options for managing
their superannuation and other financial affairs, and the committee recognises
that some degree of additional flexibility is desirable to ensure that the
compliance regime remains workable.
The committee therefore recommends that the timeframe
for notification of alterations of interests be extended from 28 to 35 days.
This would ensure that those senators whose investments are managed by a
financial agent have sufficient time to be informed of any changes in their
investments and to notify the Registrar accordingly. It also takes into account
the peripatetic nature of senators’ work which results in the vast majority of
them spending extended periods away from their home bases. By applying to all
alterations of interests, not just shareholdings, the proposed timeframe also
meets the committee’s earlier concern in respect of the Procedure Committee’s
proposal, that there should not be different timeframes applying to different
classes of interests.
The terms of the resolutions as proposed to be
amended are in Appendix 5.
On an unrelated matter, the committee also observes
that not all individual acts of share trading are notifiable per se. Only those which result in the acquisition
of shares in a new company or the disposal of a senator’s total holdings in a
particular company are notifiable. Where a senator acquires additional shares
in a company or disposes of some but not all of that senator’s shares in a
company, such transactions go to the number or value of shares held and
senators are not required to disclose those details. The committee has expanded
its explanatory notes accordingly.
Administrative procedures
The committee received valuable feedback in the
survey responses on the Registrar’s administration of the Register and has made
some minor revisions to its administrative procedures accordingly.
Administrative procedures for the compilation and maintenance of the Register
are at Appendix 4.
Conclusion and recommendation
The committee draws senators’ attention to the
revised forms, explanatory notes and administrative procedures for the
registration of senators’ interests which are contained in Appendices 2, 3 and
4.
The committee recommends that Senators’ Interests
Resolutions 1(1) and 1(2)(b) be amended in the terms set out in Appendix 5.
Ruth Webber
Chair
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