The Corporate Law Economic Reform Program (CLERP) is a comprehensive initiative to improve Australia's business and company regulation as part of the Coalition Government's drive to promote business, economic development and employment. CLERP was announced by the Treasurer in March 1997 and is aimed at reforming key areas of corporate and business regulation.
Comprehensive policy proposals were released on each of the key areas during 1997, which were developed in close consultation with the business community. This paper draws together the policy reforms which have been adopted by the Government as a result of the CLERP papers. Legislation to implement these reforms will now be released for public exposure prior to introduction into Parliament.
The new policy framework which has been developed by the Government under CLERP will contribute to the efficiency of the economy, while maintaining investor protection and market integrity.
The Treasurer and the Parliamentary Secretary to the Treasurer, Senator the Hon. Ian Campbell MP have consulted widely with business and consumer groups to ensure that the reformed Corporations Law will be relevant, cost effective and provide appropriate protection for investors. To assist the Government, the Business Regulation Advisory Group was established consisting of representatives from key business groups. The Government has greatly appreciated the contribution of all groups that have participated so actively in the reform program.
The Government's policy reforms will implement wide ranging changes to key areas of business and financial market regulation including:
- Making access to capital easier for small business by introducing a range of measures to assist small and medium sized enterprises including enabling companies to raise up to $5 million using an Offer Information Statement, up to $2 million from 20 private investors and amounts of less than $500,000 from individual 'business angels' without a prospectus;
- A new business judgment rule to provide more certainty for directors and new shareholders' rights to take action on behalf of companies;
- Providing a greater commercial and international focus to the making of accounting standards which will ensure that financial reporting standards are more relevant to business;
- Improving takeovers regulation to promote a more competitive market for corporate control including the introduction of a follow-on rule and enhancing the role of the Takeovers Panel;
- Adapting regulation to facilitate the more widespread use of electronic commerce; and
This Program of reforms will ensure that Australia's corporate laws meet the challenges of the present and future market place in a forward thinking, responsible and innovative way. They are designed to encourage free enterprise for the benefit of all Australians.