Sussan Ley (Farrer, Liberal Party, Shadow Minister for Justice and Customs) Share this | Hansard source

I am pleased to speak on the Personal Property Securities (Consequential Amendments) Bill 2009. In talking about personal property securities reform, I make the comment that it seeks to address the complexity of the over 70 Commonwealth, state and territory laws, common-law rules and rules of equity that currently govern security interests in personal property. PPS reform will provide a modern and efficient personal property securities framework, which is essential for any modern financial system. This is a consequential amendments bill on personal property securities and it follows very much from the principal bill, the Personal Property Securities Bill 2009, which was introduced in parliament on 24 June 2009. I recall that it was a priority matter for the previous Attorney-General, the member for Berowra. By harmonising existing laws, the bill will reduce the complexity of the existing arrangements for secured lending using personal property as collateral. The bill will also increase consistency in the arrangements for creating, dealing with and enforcing security interests in personal property. Before going into this bill I will go back to the principal bill, which was referred to the Senate Legal and Constitutional Affairs Legislation Committee for inquiry and report after its introduction earlier this year. The committee’s report was published on 20 August 2009. The committee recommended that the principal bill be passed subject to a commitment from the government to, among other things:

… include in a consequential amendments bill to be debated in the Senate cognately with this Bill—

that is, the principal bill—

and intended to take effect immediately after the commencement of the 2009 Bill all changes to the Bill identified as a result of concerns raised with this committee and subsequently directly with the department during the recommended further period of consultation until 30 September 2009.

The government response to that recommendation is the bill that we are looking at here today, which contains in schedule 4 the changes to the principal bill which were identified by the committee.

I want to draw the House’s attention to comments made by the Liberal senators on that committee, who recommended that the government ‘develop and implement a comprehensive education campaign for small to medium business and others prior to the start-up date for the new personal property securities system’. I am pleased to say that that recommendation was accepted by the government, which undertook to develop and implement an education campaign prior to the commencement of the new personal property securities system.

Personal property is any form of property other than land or buildings. The PPS Bill will apply to transactions which have the effect of securing a payment or other obligation by taking an interest in personal property, regardless of the form of the transaction, the nature of the debtor or the jurisdiction in which the personal property or parties are located. This is known as the functional approach.

The PPS consequential amendments bill represents the next stage in the government’s harmonisation of Australia’s law on secured financing using personal property. This consequential bill will amend 25 Commonwealth acts that deal with the creation, registration, priority, extinguishment or enforcement of interests in personal property. The amendments proposed by this bill will also clarify the operation of legislation that will operate concurrently with the PPS Bill. This will facilitate the establishment of a single national regime for personal property securities.

As to the specifics of the consequential bill, it contains measures that are designed to: harmonise language and concepts with the PPS Bill where appropriate; support a seamless transition to the PPS register to be established by the PPS Bill, including removing provisions for the registration of security interests on a separate Commonwealth register; resolve conflicts between the PPS Bill and other Commonwealth legislation that provides for security interests or other interests in personal property; determine the priority between Commonwealth statutory interest in personal property other than security interests and security interests in the same property; clarify the rights of secured parties and other parties in particular situations, including statutory detention of personal property that may be the subject of a secured security interest; and ensure that the current rights are preserved on the implementation of the amendments. The consequential bill, we note, will not amend the Corporations Act 2001. That will be amended by a separate bill, following a separate public consultation process. The coalition supports the bill.

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