This is a service specifically targeted at the needs of busy non-executive directors. We aim to give you a “heads up” on the things that matter for NEDs in the week ahead – all in two minutes or less.
In this Edition, we consider the RBA’s monetary policy decision, a Queensland Supreme Court decision providing guidance on the whistleblowers regime and the introduction of small business restructuring reform to the Corporations Act. We also consider the Government’s Resources Technology and Critical Minerals Processing road map, and what this could mean for Australia’s critical minerals sector.
GOVERNANCE & REGULATION
RBA announces monetary policy decision. On 2 March, the RBA decided to maintain the current monetary policy settings, including the targets of 10 basis points for the cash rate and the yield on the 3-year Australian Government bond. The RBA recognises that the outlook for the global economy has improved over recent months due to the increased rollout of COVID-19 vaccines. On a local level, the RBA observes that Australia’s economic recovery is well under way and there has been a strong growth in employment. In light of this, the current monetary policy settings will be maintained given they are continuing to help the economy by keeping financing costs low, contributing to a lower exchange rate and supporting the supply of credit and householder and business balance sheets. The RBA states that together, Australia's monetary and fiscal policies are supporting the recovery in aggregate demand and the uptick in employment. See RBA’s media release.
Whistleblowers must know or believe corporate misconduct is occurring in order to have “reasonable grounds to suspect”. In Quinlan v ERM Power Ltd  QSC 35, the Supreme Court of Queensland has provided guidance on the proper construction of the phrase "has reasonable grounds to suspect" in section 1317AA, which defines when disclosures qualify for protection under the Corporations Act whistleblower regime. The Court found that the well-settled construction of the phrase "has reasonable grounds to suspect" in the criminal law applies equally to the construction of that phrase in s 1317AA. This means that only matters that are within the whistleblower’s knowledge at the time the disclosure is made are relevant to the assessment of whether the whistleblower had reasonable grounds to suspect that the information disclosed concerns misconduct, or an improper state of affairs or circumstances, or indicates conduct that constitutes an offence. We have long thought that the whistleblower regime has the potential to fundamentally reshape governance practices of norms in Australia, and in our view, this case demonstrates what is likely to be the beginning of actions seeking clarification of the law underpinning that regime.
Amendments to the Corporations Act provide restructuring relief for small businesses. On 3 March, a number of amendments were incorporated into the Corporations Act – the key amendment being the insertion of sections 458D to 458H to the Act. These provisions provide temporary relief for eligible small businesses seeking to enter the formal debt restructuring process set out in Chapter 1 of the Corporations Act. These provisions allow eligible small businesses to retain control of their business, property and affairs while developing a plan to restructure with the assistance of a small business restructuring practitioner.
OVER THE HORIZON
Announcement of the Resources Technology and Critical Minerals Processing road map. The Morrison Government is leveraging Australia’s world-leading critical mineral and resources sector to create more jobs and economic opportunities for manufacturing businesses with the release of a new ten year plan. The 2 year, 5 year and 10 year goals of the Resources Technology and Critical Minerals Processing National Manufacturing Priority road map are to improve capability to bring products quickly to market; foster increased collaboration with relevant sectors and international supply chains, increase exports and grow private sector investment; and establish Australia as a regional hub for resources technology and critical minerals processing. Directors of critical minerals companies should note that, alongside the road map, the Government has opened the door to applications for a $1.3 billion fund to assist manufacturers in ramping up production and commercialising products.