Company law
Order Instructions:
Constitutional impediments and Commonwealth-State rivalry prevent Australia having effective national, corporate regulation
Is this statement an accurate description of the situation in Australia today? Discuss, in the light of recent reforms to the regulatory scheme and problems which may arise in the future.
Guidelines
The word limit is 2400 words. If the assignment exceeds the word limit by 100 words or less, there will be no penalty. If the assignment exceeds the word limit by more than 100 words, there will be a penalty of half a mark deducted for each extra 50 words or part thereof. Footnotes will not comprise part of the word count nor will a bibliography. If the assignment word count is well below 2400 words (2100 words or less) there will be penalty.
NB: Late assignments will be penalised as follows:
• Up to 3 days late 5% of the maximum possible mark awarded for the assignment
• From 4–7 days late 10% of the maximum possible mark awarded for the assignment
• From 8–14 days late 25% of the maximum possible mark awarded for the assignment
• More than 14 days late Not marked
Refer to the Rules concerning all assignments for the circumstances when these penalties may be waived. Remember that the extension to the submission deadline is exception rather than the rule and it can be granted only in exceptional circumstances.
The assignment may cover all unit objectives, though content will vary with the topic selected. In addition to matters developed in more detail below the marker will examine whether you have:
1. identified and clearly stated the relevant issues;
2. applied relevant legal principles to the resolution of these issues;
3. critically analysed deficiencies in the law and recommended appropriate changes to the law;
4. integrated and evaluated relevant knowledge from both the material covered in this unit and your own independent research;
5. developed and sustained a concise and convincing legal argument through to a logical conclusion;
6. correctly referenced and acknowledged sources;
7. fluent, clear, concise writing, not containing poor expression, grammar or spelling; and
8. answered the specific question asked.
It is most important that your assignment address the issues raised in your chosen topic. Think about the topic and make sure you understand what the topic is about before you proceed.
Marks cannot be awarded for irrelevant material, no matter how good that material is. The assignment should contain:
1. An introduction, clearly setting out the broad direction of the assignment, its objectives, any parameters of the assignment, and perhaps a summary of the arguments;
2. Presentation of argument, review of literature and compilation of evidence relevant to the topic;
3. Conclusion, clearly summarising the arguments or findings;
4. a reference list, setting out all the books, articles and other sources you have referred to in the course of writing the assignment. You need not have necessarily read each reference from start to finish, but you should have at least looked up each reference;
5. Accurate citation of your sources of information. Your written material must be presented in accordance with the most recent Australian Guide to Legal Citation (AGLC) adopted by this School (you can download a copy of the AGLC from ).
Students should note the following:
• Many people are not familiar with the requirements of assignments. Basically they are like any other piece of good writing. They must have a beginning, a middle and an end. They must be organised so that one point leads to another in a logical sequence. Headings and subheadings are usually of assistance to the reader, who should be easily able to ascertain the logic of your arguments. You should look at the articles you read in the course of your research as a model for style and organisation.
• Statements of fact must be supported by referencing in the proper form. Also arguments and ideas you are adopting or disagree with must be properly referenced. This is one of the most important aspects of your assignment, and severe penalties will be imposed if you do not reference. Be aware of the University’s and Law School’s rules on plagiarism. You should avoid over-reliance on only a small number of sources. You are expected to have read widely on the chosen topic.
• You are expected to employ your critical and analytical skills in this assignment. Avoid mere description or regurgitation and do not quote excessively. Generally speaking, no more than 10% of the assignment should be direct quotes or substantive copying of other people’s work. Both your observations and your use of other people’s writing should reflect this critical/analytical dimension. In sum, your intellectual input should be clearly discernible in the assignment.
• You are not marked for your political or social views or opinions, but rather for your ability to present coherent, rational and logical arguments, properly supported by authority.
• You are also marked for your ability to express yourself clearly, logically and succinctly. Poor expression, grammar and spelling will detract from your overall mark.
•Many students do not also realise that the more drafts of the assignment that are written, the better standard the final product will normally be. You should aim to find the time to complete at least two, if not three, drafts prior to handing the assignment in. This will be especially important in ensuring that the word limit is not exceeded.
Marking criteria
Important information: You are advised to consider the following information carefully before starting your assignment.
The assignment will be marked according to the following criteria.
Research (40%) You are expected to demonstrate a comprehensive review of the primary law sources (legislation, case law) as well as an adequate review of secondary sources (for example textbooks, journal articles, case commentary, explanatory memorandum, Law Reform Commission reports). Your research should be used to identify and clearly state the relevant issues and legal principles and support your analysis.
Analysis (50%) You are expected to analyse the information gathered and evaluate the relevant legal principles. You are expected to develop your argument logically through clear analysis and apply relevant legal principles to the resolution of issue(s).
Your analysis should also:
• integrate and evaluate relevant knowledge from the material covered in this unit;
• develop and sustain a concise and convincing legal argument through to a logical conclusion; and
• importantly, answer the specific question asked.
Technical aspects (10%) You are expected to:
• correctly reference and acknowledge sources;
• use fluent, clear, concise writing that contains clear expression, correct grammar, syntax, sentence structure and spelling; and
• Use headings and subheadings (where appropriate), an introduction, conclusion and bibliography or reference section.
Submission of assignments
All students are required to upload an electronic copy of their assignments via Turnitin. DO NOT send a hard copy of your assignment.
Assignments must be uploaded on or before the due date.
Your assignments must be submitted as either Word documents (.doc or .docx) or as text documents (.rtf). Please do not submit PDF files. Please discuss any other file format with your lecturer well before the due date.
You can start by discussing history. I would say it is advisable since the constitutional issues are highlighted by earlier cases. You may also discuss Commonwealth-State rivalry in other areas of law as Tax law but briefly just to make a point or compare with Corporate law related issues
SAMPLE ANSWER
Company Law
Introduction
The commonwealth (Federation) and the States have been engaged in rivalry since the inception f the Australian federation in 1901, which has only got more heated over the past years given that the High Court has continued to award more power to the commonwealth at the expense of the States. The commonwealth has continually used the powers of the Australian High Court in judicial interpretation of the constitution to exercise their constitutional power over the policies of the States. A clear example of such a case was in 1942 when the High Court upheld the decision by the commonwealth to levy taxes through the First Uniform Tax case so that it could finance the war effort become the sole collector of taxes across the whole federation (OBPR, 2008). The High Court cited section 51 (ii) within the constitution that gave powers to the commonwealth to levy taxes (OBPR, 2008). The key issue of contention is that in cases where there is a conflict between the commonwealth and state regulations, the relevant commonwealth laws are considered supreme in such situations. The rivalries between the commonwealth and the states and the impactof the constitution have created an untenable situation in Australia that impedes effective national and corporate regulation. This was true in the past and is still true today although significant steps have been taken to create reform and change within the regulatory system so as to improve the situation. This paper shall focus on the recent reform agenda pioneered by the Council of Australian Governments (CAOG) and its effect on Australia and its corporate regulatory environment.
Fiscal Imbalances between States and the Commonwealth
A common source of rivalry between the Commonwealth and the States in recent years has been regarding how the federal government gives funding to the States through awarding them various grants. Given that the federal government is the sole tax collector in the country, it has to find a way of redistributing the taxes collected back to the States so that they can provide essential services to their people (OECD, 2009). The federal government is required to fund various basic services such as the provision of services to the elderly including their health care, and at the same time, it is supposed to provide basic health services to the rest of the population, but the States governments are required to provide hospital services. This scenario indicates that the responsibilities of the federal government and the State government overlap and the two bodies have been known to commonly use this overlap to blame the other party for any deficiencies in the provision of health services. As this blame game rages on because of the rivalry between the Commonwealth and the States, ordinary Australian continue to suffer due to lack of some basic health services as they are being told that it is the fault of either the State or the federal government (OBPR, 2008). Similar blame game scenarios exist in the provision of other basic services, which lowers the service delivery aspect of both governments.
Harmonization of legal and regulatory requirements
The commonwealth and the State governments also have a lot of rivalry that arises out of the harmonization of the legal and regulatory requirements for businesses in the country that have acted as a significant barrier to the growth of the country’s economy. Research indicates that through harmonization, the country can generate significant GDP growth, growth in real incomes and create more jobs, which will reduce unemployment and raise the living standards of many Australians. The rivalry has acted as a significant barrier to harmonization with both governments wanting to be the superior partner in such partnerships and to get the best of the benefits that accrue from such partnerships instead of thinking about the benefits to ordinary Australians (OBPR, 2008). It has seen Australia continue to offer significant obstacles in terms of regulatory requirements when creating companies and when paying for licenses with many corporations being charged for licenses both at the State and the national level. Without the rivalry one can only imagine how far Australia would actually go in terms of being one of the most friendly nations to investors and businesses in the region and maybe even across the globe. Over time efforts to establish national trade authorities and organizations that mange trade on a national level through harmonization have been met with a lot of resistance by the State governments. This rivalry has resulted in the lack of implementation of most of the harmonization programs in Australia.
National partnership payments
The delivery of services in the states has been affected for a long time by federal-state relationship in the sense that whatever the state governments did was tied to the policies of federal agencies. The NPP programs through which the federal government funded most of the projects of the states was skewed in the favor of the federal government, which had excess control over what the states did with the funding as it usually had attached conditions. The states were extremely limited in the scope of independent choices they could make in terms of how they would spend the money they received from the federal government. However, in order for states to have autonomy in their affairs as envisioned in the constitution, the role of the federal government in deciding the policies of states should be non-existent or minimal at best (‘BEPS and recent developments in Australian corporate tax law,’ 2013). Efforts to create a more independent relationship between the federal governments and the states have faced challenges because of the existing rivalry with most of the proposed changes still not being implemented. A different funding program should be implemented in order to give states more power over the policies they implement by removing the attached conditions that were a part of federal funding. Such a strategy would ensure that states have more control over the delivery of services within their jurisdictions, which will increase innovation within the states and boost competition between states that will benefit all Australians.
Rivalries between heads of governments
Initially the Commonwealth was almost entirely responsible for meeting of heads of governments that discussed the reform agenda in Australia, which gave little room for the states to set their own agenda and fully express their needs and policies in relation to the federal government policies. The heads of agencies in the federal government would arrive at such meetings with their requirements for the state governments clearly outlined with little room for debate, which fueled the rivalry further. However, the COAG has strived to reverse this trend and create a new culture for such meeting between heads of governments by directly involving the heads of governments from the states, the territories and the commonwealth in the planning of such meetings (COAG, 2008). Other avenues for dialogue have also been created in terms of working groups and ministerial councils, which meet much more frequently than in the past where COAG meetings were only convened on an annual basis and were extremely brief (OECD, 2009). These frequent collaborative meetings have served to increase the cooperation between the state and federal governments, which has significantly increased the pace of reforms within the country. The establishment of a Center for the Australian Federation by the states in 2006 is a clear indicator of the increased role of the states in the reform agenda currently being implemented in Australia.
The Impact of Ministerial Councils
During the implementation of recent reform agendas, the role of the ministerial councils has taken center stage given that they are a direct way of ending state and commonwealth rivalry as they are usually made up of ministers from states, the territories and the commonwealth (OBPR, 2008). The impact of ministerial councils cannot be understated as they usually result in the adoption of specific policies by the states that quickly translate into legislations and finally into regulatory practices in the states and territories. The ministerial act as avenues for resolving any issues that arise between governments and the COAG has identified them as a crucial component of the efforts to implement the reform agenda within the states because of the authority of the members of such councils as representatives of their governments. Initially the ministerial councils were too many with some having overlapping roles and there was ineffective communication between the numerous ministerial councils which directly impeded the coordination of their activities and their effectiveness. However, the CAOG embarked on a project of streamlining the effectiveness of the ministerial councils and creating better integration firstly by reducing their number and redefining their scope and providing clear guidelines for their formation (COAG, 2008b). The ministerial councils have been vital in redefining the role of the states in creating their own policies, which has positively impacted the relationship between the states and the commonwealth by increasing the autonomy of the states (OECD, 2009).
Improved mechanisms for regulatory management
A crucial component of the rivalry between state and federal governments is the rising costs of compliance across various jurisdictions in Australia because of non-uniform regulatory schemes that lead to double taxation on businesses, thus hindering business competition. Although the federal government is the sole tax collector, businesses are taxed and regulated under the individual constitutions of each state or territory, which greatly increases their compliance costs across jurisdictions (OECD, 2009). In order to improve the regulatory management mechanisms, the CAOG got the three levels of government to agree to several guidelines that would govern the regulatory environment (COAG, 2008b). The agreement included the establishment of gate keeping or controls as a crucial component of the decision making process, use cost-benefit analysis as a method of improving the quality of decisions made by analyzing the impact of such decisions. The agreement also involved the establishment of better analysis of the cost of compliance resulting from new regulations on individuals, businesses and the community, while at the same time increasing the scope of the impact analysis performed for new regulations (‘BEPS and recent developments in Australian corporate tax law,’ 2013). These mechanisms are supposed to apply to all three levels of government and the ministerial councils as they create regulations within the recommended regulatory framework in order to eliminate all forms of rivalry between states, territories and the federal government.
Applying best practice principles in regulation
In order to create and implement equal regulatory requirements the three levels of governments agreed to abide by some principles that would ensure the equality of regulations across Australia based on principles of equality and fairness. Some of the guiding principles under this agreement brokered by the CAOG include establishing a credible case for action before attempting to create legislation to solve a particular problem, considering several feasible options before making a decision on the best option to adopt for the problem, and adopting only those options that have the greatest overall positive impact on the society (COAG, 2008). The three levels of government also agreed not to restrict competition unless it could be proven that the benefits of such a move on the community would be greater than the costs and that this was the only way such benefits could be attained. The governments should also guide those affected by certain regulations on how best to comply with the regulations so that the expected policy outcomes might be achieved, while at the same time the governments should keep regulations up to date and relevant over time. In case there are issues that are raised by several jurisdictions after a particular regulation is being considered for implementation, the ministerial councils should halt its processes and commission a review of the decision making process (OECD, 2009). If the review team finds faults with the process, the council has the option of using the findings and recommendations when making their final decision, but if they ignore the recommendations, the heads of government may take up the issue.
Working Arrangements that Facilitate National Reform
As coordination between the commonwealth and states increased significantly after the December 2007 elections the COAG created a set of guidelines that would guide the creating of appropriate working conditions for the Australian workforce under the renewed cooperation between the two governments. Some key areas of focus included health and ageing, business regulation and competition, and productivity agenda including training and education. Working groups were constituted by the CAOG to create proposals for the implementation of these strategies, which were headed by a minister of the commonwealth with their output being in form of proposals, and delivery objectives (COAG, 2008). Heads of treasuries complemented the working group as an independent unit chaired by the Commonwealth Head of Treasury where they worked out formulas for implementing the proposed financial plans (OECD, 2009). The major strengths of the working groups include the fact that they have a clear agenda, they have high ranking political leaders, they have adequate funding and well established secretariats, and are composed of high level commonwealth and state officials with relevant experience in setting policies. However, states have raised issues with the significant role played by the commonwealth as the leader, but they also appreciate that the commonwealth is leading the reform agenda.
Conclusion
In conclusion, the analysis of the issues at the core of the rivalry between the commonwealth and state governments and the reform agenda implemented by the CAOG indicate that the reform agenda has tries to resolve most of the issues that impede the establishment of a national corporate regulatory environment. I would like to point out that if the reform agenda is implemented fully by successful governments, they can prevent any future rivalries by preempting them and establishing structure to quickly resolve such rivalries in the future. I would also like to issue a cautionary word to the corporations that are relying on the reform agenda to rollout programs or expand operations across the country or even internationally that the pace of reforms is unpredictable. Reforms may be fast tracked by one government only for them to drastically slow down during successive administrations, which means that all corporations should plan for such eventualities in future. The rivalries between the three levels of government are not new to Australia, what would be new is if the current generation of leaders was able to completely resolve the rivalries and constitutional impediments to create a favorable corporate regulatory environment. The reform agenda discussed here holds the key to the desired corporate regulatory future, but Australian leaders must be willing to implement it fully to reap the maximum benefits for their efforts.
Reference List
‘BEPS and recent developments in Australian corporate tax law,’ 2013, International Tax Review, 24, 10, p. 15, Business Source Complete, EBSCOhost, viewed 21 August 2014.
COAG, 2007b, ‘COAG National Reform Agenda, COAG Regulatory Reform Plan April 2007,’ www.coag.gov.au/coag_meeting_outcomes/2007-04-13/index.cfm.
COAG, 2008, ‘Intergovernmental Agreement on Federal Financial Relations,’ www.coag.gov.au/intergov_agreements/federal_financial_relations/index.cfm.
OBPR, 2008, ‘Best Practice Regulation Report 2007-08,’ Department of Finance and Deregulation, Canberra.
OECD, 2009, ‘Regulatory Reform: In Depth Review of Australia,’ DAF/COMP (2009), 3.
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