Craig Thomson (Dobell, Australian Labor Party) Share this | Hansard source

It is interesting, having heard the member for Berowra talk about the origins of the bill, to look at the record of the previous government on red tape. What we saw was an increase in red tape during their time in government. I suppose it really highlights the stark contrast between those on this side of the House and those on that side of the House. They might talk about these things, but we are actually out there doing them and fixing them up. We are there supporting small business in all our communities around Australia.

In keeping with the best reforming traditions of the Hawke-Keating Labor government, the Rudd government is pursuing the most ambitious program of reform in business regulation in the nation’s history. We are moving Australia towards a seamless national economy. One of the concerns I hear constantly from small businesses in my electorate of Dobell on the New South Wales Central Coast is the red-tape burden that has grown and grown and grown over a long time. Some have likened it to The Blob, the 1950s science fiction movie. It is gobbling up investment, jobs and opportunities. That is why the Rudd government is out there making sure that there are these reforms to our economy and that we do move towards this seamless national economy.

The red-tape burden in Australia is stifling economic growth and productivity. We all know that today’s productivity growth is tomorrow’s prosperity. We all know that growth and increasing productivity mean more jobs for Australians. It is no secret to the businesses of the Central Coast that red tape is strangling jobs in our region, as it is around the country. In 2009 Australia is an economy subject to no fewer than nine regulatory regimes which overlay these regulations, with eight states and territories each seeking to regulate in their own way, and in some cases it is duplicated another time by national regulation imposed at the Commonwealth level. In the 2006-07 financial year more than 31,700 Australian businesses were operating in more than one state or territory. More than 4,300 operated in every state and territory, meaning they dealt with all nine different regulatory regimes. These statistics alone show how important it has been that, in the 18 months since coming to office, the government has demonstrated its commitment to Australia having a seamless national economy.

The Personal Property Securities Bill 2009 is exactly what the government’s deregulation agenda is all about. The bill will supersede a tangled web of red tape involving over 70 Commonwealth, state and territory acts. The Personal Property Securities Bill will establish one national law governing the securing of finance using personal property. Personal property securities reform is an area that has long required change. Other countries, notably New Zealand, Canada and the US, have all implemented reforms in this area. The Personal Property Securities Bill will establish a national personal property register on which security interests may be registered and searched; provide rules for the attachment of security interests to personal property; specify the circumstances where personal property free of a security interest would be required; include priority rules for governing priority between competing security interests; and provide a process for enforcement against secured personal property.

The Personal Property Securities Bill is the result of extensive consultation. A first draft of the bill was released for consultation in May 2008. An amended version of the bill was referred to the Senate Standing Committee on Legal and Constitutional Affairs in November 2008. Amendments have been made to the bill in response to the committee’s recommendations. Personal property securities reform has been advanced in cooperation with states and territories as part of COAG’s deregulation agenda. The bill was supported by a referral of legislative power from the states. An intergovernmental agreement on personal property securities reform was signed by COAG on 2 October 2008. New South Wales is the first state to refer its power, having passed its referral legislation on 17 June 2009.

Let us have a detailed look at what the bill will do and why it needs to be implemented. Personal property security reform is about secured financing—that is, lending that is secured by property other than land. This can include secured car loans for individuals through to multimillion-dollar company charges. Currently there are over 70 Commonwealth, state and territory laws, as well as the common law and rules of equity, governing security interests on personal property. The laws vary in their application according to the form of the transaction, the nature of the debtor and the jurisdiction in which the property is located. This has the potential to significantly add to transaction costs. The various Commonwealth, state and territory laws are supported by a range of registers—in some cases, in the form of paper records operated by the various jurisdictions. Having to search across the different registers can also increase costs for lenders and borrowers.

Personal property security reform is an important part of COAG’s deregulation agenda. By harmonising the 70 Commonwealth, state and territory laws and creating a single national online register, the bill will have a significant impact for business and consumers. The bill will create one national law with one set of rules governing personal property security interests. The rules will apply uniformly to all Australian businesses and consumers. Providing consistent national laws for personal property securities will help enhance Australia’s position as a financial centre. Banks and financiers should be able to gain greater access to international finance, which will in turn assist growth and employment in Australia. This is particularly important in the current economic circumstances.

This government is about supporting jobs—unlike those opposite, who refuse to support a single government initiative towards preserving Australian jobs. Small business in particular will benefit, as the new system will enable them to use many items of personal property as collateral for the first time. This will increase their access to finance and reduce the cost of it. A key element of the law will be the creation of a single personal property securities register, allowing for central registration and search of security interests. Consumers will be able to search at a low cost to see if a property they are considering purchasing is encumbered. This is an important consumer protection measure. In the case of motor vehicles, it is proposed that the register will provide additional information about the car, such as its make and model, to help consumers make informed purchasing decisions. The bill will operate concurrently with the Uniform Consumer Credit Code.

The bill has been the subject of extensive consultation, as I have already said, and has received significant support and input from stakeholders, including industry, financiers, businesses and the legal industry. In March this year the Senate Standing Committee on Legal and Constitutional Affairs released its report on the exposure draft of the bill. Amendments were made to the bill to incorporate recommendations made by the Senate committee, including enhancing privacy protections in the bill. This bill provides for a review of the operation of the bill within three years after security interests are able to be registered.

Personal property is any property other than land. This bill would apply to all transactions which create an interest in personal property that secures a loan or other obligation. The new national personal property security register would operate on a cost recovery basis. Use of the register would incur small charges which would be used to cover the cost of operating the register.

Secured finance using personal property is very important to Australia’s banking and finance sectors. Borrowing using personal property has the promising potential to assist businesses to grow. This is particularly good news for small businesses. Small businesses will benefit in particular as the new system will enable them to use many items of personal property as collateral for the first time. This will increase their access to finance and reduce the cost of finance.

As I said at the start of my contribution, this reform is in the best traditions of Labor governments during the 1980s and 1990s. The Prime Minister just recently said:

The great social reforms of the Hawke and Keating era were critically important to sustaining public support for the difficult work of modernising our economy to make it more competitive in a rapidly globalising world.

The greatest trait of Bob Hawke as Prime Minister was that he brought Australia together while we went through a period of massive economic upheaval. Whereas those overseas experienced extreme social division, like in England under Margaret Thatcher, Australia has had the leadership to bring about reform with public confidence. We are living through another watershed moment in economic history. Global markets are shifting at a pace we have not seen in some time. There is no time to be ‘relaxed and comfortable’. In a period of great change our nation requires leadership of great economic and political skill. This is the kind of leadership the Prime Minister is providing, and it is the type of leadership that the Leader of the Opposition simply cannot provide. Under the stewardship of the Rudd government, Australia is weathering the global recession better than most. This is due in large part to the stimulus program that the government embarked on. The government acted early and decisively to support financial stability, nation building for recovery stimulus, jobs and training. Without the stimulus Australia would have recorded three negative quarters, following other countries into recession.

The Central Coast economy would have been devastated without the government’s stimulus package. The construction, tourism and retail sectors that my region relies on would have been blasted. One and a half million people work in the retail industry in this country. I represent a large retail workforce on the Central Coast. There is no other section of our economy on the Central Coast that employs more people than retail. Without the stimulus thousands of people would have been out of work. The lines at Coast Shelter at Donnison Street would have been twice as long. Treasury estimates that, without the stimulus, unemployment would have reached 10 per cent. I can assure you that it would have been higher on the Central Coast, where we already have high unemployment. The Central Coast is a region that always suffers from high unemployment. The absence of a stimulus package would set our region further back than most. Thankfully, the government did go down the stimulus path. As a result we are the only advanced economy to have grown over the past year; consumer confidence is at its highest level since July 2007; business confidence is at its highest level since October 2003; we have the second lowest unemployment of all the major economies; and we have the lowest debt and deficit of all the major economies.

Australia is well placed to emerge from this global recession. But the road ahead will be long and tough. The Australian Labor Party is the political party of vision and reform. We are the only party with the ability to bring the nation forward through the stormy economic times. We are the only ones with the ability to make tough economic decisions as required while not forgetting Australia’s belief in social justice and the fair go. We need to build for the future agenda. We need a ‘building decade’ for productivity. This is an important bill in terms of that reforming agenda. I commend the bill to the House.

See this speech in context