Class Actions Australia is warning Treasurer Josh Frydenberg’s intention to water down Australia’s stock market disclosure laws would weaken the economy by making it easier for company directors to act poorly and dodge accountability.
Frydenberg today announced the government’s intention to permanently relax stock market disclosure laws. The Treasurer had originally introduced the changes as a temporary measure to respond to the Covid-19 crisis.
“Funny how the pandemic crisis has apparently abated enough to stop JobKeeper, but is still serious enough to warrant permanently watering down corporate responsibility,” said Class Actions Australia spokesperson Ben Hardwick.
“The ASX is about to hit an all-time high, and the Treasurer thinks it’s important to offer extra shields to company directors to avoid accountability. It’s madness.
“Australia’s robust stock market disclosure laws mean investors can operate from a position of knowledge. Australian directors know they have to be open with the market or they might be accountable to their investors through a class action. Josh Frydenberg is apparently uncomfortable with this situation.
“His plan to water down continuous disclose laws would advantage powerful company directors over mum and dad investors.”
Mr Hardwick said he thought it was unlikely the government’s new laws would make it through the Senate, because they were not just morally wrong, but economically irresponsible.
“Robust disclosure requirements and class actions are our economy’s best friend,” he said.
“If you truly believe in markets then you’ll consider transparency and accountability to be good things, because they allow investment to flow rationally. If, however, you prefer crony capitalism and protecting corporations from consequences then you’ll take a different view.
“Josh Frydenberg has revealed his hand with this decision, but I suspect the Senate crossbench may have greater integrity when it comes to defending the true interests of investors and our markets.
“The last thing we should want is for Australia to develop an international reputation as a jurisdiction that’s soft on corporate misbehaviour. That’s a surefire way to dry up investment.”