Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

It gives me great pleasure to rise this evening to speak on the Personal Property Securities Amendment (PPS Leases) Bill 2017. This fixes up an act that was introduced back in 2009. I can remember back then reading some commentary when the bill for that act was introduced by the former Rudd-Gillard-Rudd government and thinking to myself, 'How could the parliament possibly legislate something that makes so little sense for the small business community?' It was crystal clear to me at the time, from sitting outside of this place, that what was actually in that bill back in 2009 would cause problems, would have unintended consequences and would have adverse and unfair effects. But at that time there was just so much poorly thought through legislation that this just piled another bad bill on top of another bad bill.

However, I have to admit that back in 2009 the coalition, when they were in opposition, did not oppose the bill. I have to be fair to the then Attorney-General—Robert McClelland. Yes, he was mistaken on many aspects in this bill. There were some good things originally in it, but I was a bit disappointed that the coalition at that time did not pick up on the bad things. But, in their defence, there was so much confused and chaotic legislation being driven through the parliament then, often on ideological grounds, I suppose the opposition sometimes did not know where to actually start.

As it was, the concerns I had were over two issues. The first concern was with what was known as a Romalpa clause or a retention-of-title clause. This enabled a supplier, a wholesaler or a manufacturer, when they were onselling goods through the supply chain, to have in their contract of sale a retention-of-title clause. The clause was simply something they would often put at the bottom of their invoices that said, the supplier retained the title to the goods until they received payment in full. That was a fair enough term. If a supplier is supplying goods on credit, it is fair enough, if the person he is supplying to goes into insolvency or liquidation and an administrator is appointed, that he gets to retain the title of the goods that he has supplied, especially in circumstances where he can easily identify what his goods are if they have not been mixed with other goods or they have not been made fixtures in a particular property. That worked well for decades. It was a contractual term so that if a company went into liquidation the supplier could turn up and show the administrator or the liquidator the terms of the supply agreement they had. That would have had the retention-of-title clause in there, so they would have been able to take their goods back. Those simple contractual terms worked well and protected the interests of small business suppliers.

But there was a change made to this simple contractual arrangement back in 2009 that said: 'Now you have to register your retention-of-title clause at each particular sale you make with a government bureaucratic website and get it officially stamped. Otherwise, in a liquidation, what you should have retention of title to, or you thought you had retention of title to, will go to the assets of the company in receivership, which, in effect, will go to the secured creditors'—which are often the banks—'or the liquidator.' So, through those provisions, you simply had an asset transfer from the small business community to help the big end of town—the large banks and secured creditors—to, effectively, take windfall possession of goods that they had no entitlement to whatsoever.

The second concern I had with the original act was with regard to the rental and hire industry because it made it so that, if I was a business hiring my goods to another company, and I had an indeterminate term of the lease—and that sometimes may be the case because, when you lease goods or a company hires goods, you do not know how long you may want that term for; you may want it for three months, six months, 12 months, a year or two years—again, in an administration or liquidation situation, the goods that my company had hired out would all of a sudden no longer be my property. Again, that reversed years of simple common sense and a common practice in the industry. Suddenly you had to take along your lease and get it stamped and registered in a government bureaucratic form. If you did not do that, you were at risk of the administrator taking ownership of your property. This was absolutely, completely absurd.

I see the member for Moreton is speaking on this bill, which is very good. I had a look at how this legislation got through parliament the first time, when it was so obvious—

Mr Perrett interjecting—

I said that. I have acknowledged that. I wondered how it got through parliament the first time. Surely there were parliamentarians here that understood the damage that this would do. Who was on that speakers list for that bill back in 2009? The member for Moreton. He was telling us how wonderful the legislation would be for solicitors—how it would create more work for clerks. I hope that when the member for Moreton makes his contribution on this bill he will stand up and apologise to this House for how mistaken he was back in 2009.

Let's have a look at some of the damage that was done through the legislation that the member for Moreton supported last time. Let's look at a couple of cases.

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