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

I rise to speak on the Personal Property Securities Bill 2009. The purpose of this bill is to provide for a single national law to deal with personal property securities, PPS. PPS reform will address the complexity of over 70 Commonwealth, state and territory laws, common law rules and rules of equity governing personal property securities. It will provide a modern and efficient personal property securities regulatory system, which is essential for any modern financial system. The bill is modelled on the New Zealand, Canadian and US legislation. It also draws on work by the United Nations Commission on International Trade Law and the International Institute for the Unification of Private Law. The bill will also address the relationship between potentially conflicting Commonwealth, state and territory laws. The bill specifies where other laws prevail. For example, the bill will not apply to tradeable water rights, water access entitlements, goods affixed to land or to non-consensual interests such as liens. Furthermore, a state or territory will be able to expressly exclude a right, entitlement or authority granted by law of the state or territory from application by the bill.

The various states and territories have long had their own mechanisms for the registration and management of securities given over personal property to secure financial obligations. Familiar examples include fixed and floating charges, bills of sale, chattel mortgages and registers of hire-purchase agreements. It has also long been recognised that there is a need for national harmonisation of these arrangements to provide greater certainty for borrowers and lenders and to increase efficiency in the sector.

The matter of PPS reform was referred to the Australian Law Reform Commission in June 1990. Draft legislation informed by the ALRC’s report was prepared in 1995, and it was itself the subject of extensive consultation. The matter was pursued through COAG, which in 2007 endorsed the model of a national system. The former Attorney-General, the honourable member for Berowra, gave this issue particular priority. In October 2008 COAG signed an intergovernmental agreement to effect the proposed legislation as part of the seamless national economy agreement between the Commonwealth, the states and the territories. New South Wales has passed its referral act, and it is expected that the other jurisdictions will follow soon.

The bill will apply, with very limited exceptions, to all types of personal property, including motor vehicles, contractual rights, intellectual property rights and uncertificated shares. It provides for rules for the creation, priority and enforcement of security interests and to establish a national register of them. There are detailed, specific provisions in relation to certain classes of property. The coalition support this bill; however, we foreshadow potential amendments in the Senate.

I conclude by stating that this bill would not have been possible without the hard work and efforts of the member for Berowra, a minister in the previous government, Philip Ruddock. I thank the Main Committee.

Chris Hayes (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

I too rise to support the Personal Property Securities Bill 2009. It is a bill which will establish one national law governing security interests for personal property and will create a register of personal property securities, in which security interests would be able to be registered and searched in one vicinity.

As the Attorney-General said in his second reading speech, the government went to the election with an ambitious deregulation agenda and promised to reduce the amount of regulation burden borne by Australian business. In doing that, it aimed to undo the amount of red tape, which was becoming very wearying for business interests throughout the Commonwealth. It was also a very direct effort to ensure that we grow the productivity of the country and assist the development of small business by relieving them of those burdens. In the 28 months since coming to office the government has amply demonstrated its commitment to that agenda.

By way of background, it is important to note that this bill is a result of an extensive consultation process and has received significant support from various stakeholders, including the industry financiers, the legal fraternity and certainly business generally. In April 2007, COAG endorsed the need for a national system to deal with the creation and enforcement of security interests for personal property. The first draft of the Personal Property Securities Bill was released in May 2007. COAG signed an intergovernmental agreement in October 2008, making it clear that it was committed to this issue. The amended version of the bill was referred to the Senate Standing Committee on Legal and Constitutional Affairs in November 2008 and amendments have been made to the bill in response to the committee’s recommendations.

This brings me now to deal with the substance of the bill itself. The personal property securities reform is very long overdue in terms of the securitisation elements of industry. Other countries, such as New Zealand, Canada and the US, have moved to implement reforms in this area. Personal property security reform is about securing finance—lending that is secured by property other than land.

You might recall that only this week the government made other inroads in terms of security when we introduced legislation in relation to margin lending. It is more than just businesses that go out to secure loans to raise capital for various ventures, and that was another matter that flowed from a general agreement through COAG. One of the things in terms of consistency in the provisioning of securities associated with margin lending was the well-established and recognised need throughout the Commonwealth for one set of harmonised laws governing these things. You cannot have a multiplicity of state and territory arrangements which only serve to be confusing, not only for the lenders but also for the borrowers. That legislation, introduced earlier this week, is another example of what we are doing in moving in that direction.

In a legal sense, personal property is any form of property that is not land or buildings. Land or buildings would be known as real property or real estate. Personal property includes tangible property such as motor vehicles, machinery, office furniture, currency, artworks and stock in hand. But it also includes intangibles such as contract rights, uncertified shares and intellectual property rights.

The overall purpose of the Personal Property Securities Bill 2009 is to rationalise the current arrangements, which include more than 70 pieces of Commonwealth, state and territory legislation and apply to more than 40 different registers of security interests in personal property. We know that they vary in application and according to the forms of the transaction, the nature of the debtor and the jurisdiction in which the property transaction or the property is physically located. It all has potential to add costs to the transaction, and that is bad for business. Having to search across all the various registers adds significant legal costs to lenders and, in turn, borrowers. The complexity of the existing secured lending arrangements and the lack of consistency between them is a major source of uncertainty. By harmonising these laws, these bills will have a significant impact for businesses and consumers by providing greater certainty for both lenders and borrowers.

Of equal importance, under the current economic circumstances, providing consistent national laws for personal property securities will enhance our ability to position our country as a financial centre. Banks and financiers should be able to gain greater access to international finance, which in turn will assist the growth of businesses and help stimulate growth and employment in this country. Small businesses themselves will be direct beneficiaries of the new system, which will enable them to use personal property as collateral for the first time, thereby increasing their access to finance and reducing costs within their businesses.

These reforms are wonderful news. I have got somewhere in the vicinity of 10,000 small businesses in my electorate. Not all of them will be accessing arrangements such as these, but I know a number of them certainly will. These arrangements, in terms of providing greater access to lending using personal property, come on top of a vast array of reforms that have been introduced by this government to assist small business. One of the huge growth areas in the south west of Sydney and the employment generator is small business itself.

So, things that we have brought down to assist small business since coming into power include direct financial assistance to small business through expanding and enhancing the small business tax breaks. There are $720 million in tax reductions to provide cash flow during the 2009-10 period, which comes on top of the boost provided by the government through a discounted rate of Pay As You Go, or PAYG, tax instalments in the December 2008 quarter. These all take pressures off businesses at a time when they need it most, at a time that we want them to maintain employment.

Small business has also been assisted by the advice and support centres that have been established and the support that we have given directly to Business Enterprise Centres. I am very fortunate. I have one in my electorate that covers both Liverpool and Campbelltown. That organisation received direct funding from the Commonwealth. I know what it does in relation to small business. I know not only how much time and effort goes into establishing the businesses but how much this organisation goes towards helping these businesses make the transition from an initial idea to a working model that is capable of expanding and hopefully employing additional people. I would like to commend the work of my BEC, which has now been running for more than 15 years. The CEO, David Waudby, and its chair, Bruce Hanrahan, do a sterling job for small businesses throughout the south-west of Sydney.

A key element of the law will be the creation of a personal property securities register, allowing for the central registration of and search facilities for security interests. It will replace the existing, confusing array of electronic and paper based state and territory systems. These reforms are long overdue. Surprisingly, some registers currently being used have been in use now, in terms of personal property, since 1920 to 1930. I concur fully with what the Attorney-General said in his second reading speech: this is a 21st-century reform for 21st-century circumstances.

The bill will allow consumers to search, at low cost, to see if the property they are considering purchasing is encumbered. In the case of motor vehicles, it is proposed that the register will provide information such as the make, model et cetera, to help people to make informed choices, in addition to registration numbers and chassis numbers. As I said, this will make sure that people know that what is being put up for security is not encumbered elsewhere. This measure is clearly very important for customer protection and will be very much welcomed by hard-working families.

There is, however, a need for an orderly transition to the new system. The significance of this reform to business cannot be underestimated, and the government is committed to making sure that business and the financial sector are prepared for the introduction of the new system. The transitional arrangements are that the system will go online once all the information has been placed onto the new system. That is going to take a little while, but it will happen before the register goes live and is made available to the public.

In conclusion, the bill will, in the end, bring down the costs of obtaining credit. It will also increase the propensity of lenders to lend, particularly to small business, thereby increasing the availability of credit within the market. By reducing the complexity and introducing greater consistency amongst the different kinds of secured finance, the bill will generate a wide range of benefits for all parties who need to secure personal property to raise finance. I commend the bill.

Philip Ruddock (Berowra, Liberal Party) Share this | Link to this | Hansard source

I welcome this opportunity to speak on the Personal Property Securities Bill 2009, which deals with the implementation of the personal property regime. First, can I thank the Attorney for acknowledging that I did take an interest in this reform and ensure that it was given the priority it deserved. I will take a moment or two just to elaborate on that first.

This is a very significant reform. But it should be seen as only one of many that are absolutely necessary in our federation if we are to ensure that businesses are able to operate efficiently and effectively and in the national interest, generating profits and not having to meet unnecessary costs and charges in order to be able to operate. This exemplifies one of many areas which all ministers ought to be aware of in their portfolios where our federation can produce difficulties for business operations and impose additional costs.

It is very interesting that, when you look at Australia as against the United States of America, which has something like 50 states, when we have six states and two territories, that sometimes you can see measures implemented that can wreak considerable harm upon an economy as you race to the lowest common denominator, to the least regulated environment, in some jurisdictions. In the state of Delaware in the United States, corporations legislation is minimalist in terms of its impact on those who want to establish their presence there, and it means that there is often a desire to register there for less scrutiny. If you look at some of the present financial crisis that we face, a lot of it was generated in the United States, where financial regulation in some jurisdictions was less robust than it ought to have been, as people went for the lowest common denominator.

Harmonised laws are essential in the national interest, and I think they are in the national interest in relation to personal property security. I welcome the government’s continuation of the measures that I initiated to bring this fruition. I notice that the Attorney wanted to share some of the credit with Labor predecessors. I do not deny that they may have undertaken certain roles. In 1990 Michael Duffy referred a review of the adequacy of personal property security reform to the Australian Law Reform Commission. I must say that I was not aware that he had, but no doubt he did. I am not aware of the outcome and I am not aware of anybody implementing an outcome arising from that review. I am told that in 1995 Michael Lavarch released a discussion paper. That may have happened in 1995, but I am not aware of anything that actually flowed from it. I have a great deal of regard for Michael Lavarch but I do not remember it being taken up as a major initiative of the then government.

What I can say is that this issue became an issue largely by accident. I was attending a regional bar association and law society conference on the Sunshine Coast at Coolum. My wife said to me: ‘Look, there is this session on personal property security. If you can’t see anything else in the program that you want to do, you might as well go along.’ I went along and I heard a presentation from the late Professor David Allan from Bond University on measures that had been taken in some states of the United States and Canada to simplify personal property securities and, equally, the measures to codify arrangements that had been put in place by New Zealand. I heard from a very distinguished legal practitioner at that time about the very considerable business that he as a legal practitioner had in advising on variations in personal property security in different jurisdictions. The point that he was making was that if you are a legal practitioner you can spend a lot of time and you can generate very considerable costs, which clients have to pay, offering advice on differences that are in fact totally unnecessary.

I have also spent a bit of time with people in business, people who you might think would not be interested in these matters. I went to a function organised by the Australian Hotels Association. I met with an officer of the Hotels Association who had a hotel in Geelong and a hotel in South Australia, in Mount Gambier. He was telling me about the problems that he and his business experienced operating in two jurisdictions in terms of getting floating charges over his stock in trade and the costs that he incurred in getting advice on those matters. It reinforced my view that this was an absolutely essential reform. We did take it to SCAG and we got the states to agree there. We did take it to COAG and, I might say, it was not an easy path to get the department of finance and the Treasury to agree to meet some of the costs of getting the states up to the barrier in relation to this. I might also say that if you did not drive it, it was not going to happen.

I was interested in some of the statistics in the second reading speech of the Attorney, because they were statistics that were shared with me. There were some 70 Commonwealth, state and territory acts referred to in paragraph 7, I think, of the Attorney’s speech. I was once chastised for saying that; chastised for saying there were 70 different acts and implying that there were 70 differences. One of my advisers said, ‘But, look, there are only 40 substantial differences incorporated in those 70 pieces of legislation.’ While it certainly ensured that I was accurate in the way in which I was describing these matters, it brought home the enormity of those differences. And as a legal practitioner who learnt about the different forms of personal property security which you may have to give, from floating charges, to bills of sale, to hire purchase and maritime loans—you can go through the full range of them—all with, in some places, different provisions, you can see the enormity of the challenge.

I do not want to give any particular advice in relation to the process forward, save to say that I welcome the reference by the Attorney-General to the fact that this bill, having been reviewed to simplify its language and structure, is consistent with comparable legislation in Canada, New Zealand and the United States, while taking into account the unique circumstances surrounding Australian law. I simply want to make this point: I always saw this measure as one that uniquely, given our relationship with New Zealand, could, the closer we linked our legislation to the New Zealand scheme—and I recognise that it may not be possible to do it in every respect—better ensure that the closer economic relations between Australia and New Zealand were going to be seen as a cooperative arrangement, rather than New Zealand always having to come on board in relation to what our arrangements might be.

They embarked upon personal property security reform and rationalisation well in advance of us. I hope the officers who are listening will have regard to the importance of ensuring that this is a scheme that will not jeopardise closer economic relations, notwithstanding the unique circumstances surrounding Australian consumer law, although I am not sure that is always as unique as we like to think. I hope that those matters can be taken into account.

When I sit down and write about the four years that I was the Attorney-General of this country, the major agenda item for me was harmonisation of laws. I had responsibility for national security and, certainly, maintaining Australia as safe and secure in a very difficult world environment was something to which I attached a great deal of importance, but one should never forget that there are other areas of important reform that need to be pursued in the national interest, and you cannot put them to one side because there are other difficult issues that you might have to deal with.

I will be gratified when this measure comes to finality, but I hope the engagement which I had with the late Professor David Allan from Bond University, who brought this matter into very clear focus, will not be forgotten. I took the opportunity of sharing on some of the occasions when we talked these issues through of bringing his widow to witness the progress that was being made in implementing these changes. I think she was very gratified for the acknowledgement that was given to his leadership. In public life it is very important to share the credit where it is due and to recognise the importance that people along the way have played in developing your ideas and helping you identify the changes that are needed.

I do thank the Attorney-General for his acknowledgement that I was interested in this reform and that I ensured that it was given priority. I thank him for continuing to ensure that, those steps having been taken, the matter is being brought to fruition. It is a very important reform; it is in the national interest, it will generate savings for people who are running small businesses, it will help to make us more internationally competitive and it should serve to make sure that anyone who serves in the role of Attorney identifies further areas in which harmonisation is possible, because you can do a good deal for Australia if you do.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I too rise in support of the Personal Property Securities Bill 2009. I thank the member for Berowra for giving a little bit of the history of this initiative. Looking back at significant meetings in history, we talk about initiatives coming out of Bretton Woods and the like, and it is great that this is the ‘Coolum initiative’, the ‘Sunshine Coast clause’ or something like that. It is great that we can trace this back to a part of Queensland that is so beautiful. This is another bill which is shredding red tape, removing duplication and delivering greater consistency across this great nation of ours. It is part of the Rudd government’s cooperative approach to deregulation rather than the big-stick style of our predecessors.

On 2 December 2008 through COAG all states and territories agreed to refer their legislative power on personal property securities to the Commonwealth. When it comes to security interests on personal property there are more than 70 Commonwealth, state and territory laws, as we heard from the member for Berowra, but only about 40 substantive differences, which is still 39 too many. These laws vary between jurisdictions and this can significantly add to confusion and transaction costs. I declare an interest: my wife is in her last year of law and she is doing the personal property law subject next semester. If we can simplify this before she starts that semester, hopefully that will make my life a little bit easier!

There are also various registers operated by different states and territories and some of these registers are firmly entrenched in not the 20th or the 19th century but the 18th century and are devoted to paper records. I do not think they quite roll out the vellum or anything like that, but my understanding is that it is not far from that. In Queensland we have the Torrens title and the like, so we are a little bit advanced, but some of the other states are very much entrenched in the 18th century. This bill will bring into force one national law governing security interests in personal property and a single national online register. This single register will replace more than 40 registers operated by or on behalf of the various jurisdictions. One of the joys of being an articled clerk, or an articled slave, was going off to search some of those registers. I remember the delay and how your life was in the hands of some clerk who might or might not let you look at or search for something. I am sure that people with a background in business like Andrew Burke would understand that it is timely in the 21st century for the nation to have a simplified approach.

The legislation before the House applies to all transactions which create an interest in personal property, usually through a loan or other obligation. The bill defines personal property as any property other than land. So we are talking about tangibles like cars, boats, machinery or crops and intangibles such as shares or intellectual property. It is what a lot of suburban solicitors, apart from those in conveyancing, would class as their bread and butter, providing support to small businesses and the like. Personal property securities are interests in personal property that secure a payment—for example, a car loan for an individual or multimillion-dollar company charges.

This bill is good for the finance sector, it is good for business, it is good for customers and it is even good for solicitors and especially the articled clerks that work for those solicitors. It is not often that we can tick all four of those boxes together. Consumers will have greater protection, as they will be able to search to see if property they are considering purchasing is encumbered. For example, if an individual is in the market for a used car—and certainly used cars are big business in my electorate—for a small fee they will be able to do an online search to see whether a particular car is being used as security for a loan.

Small businesses will benefit as they will have greater access to finance at reduced costs. The new system will enable them to use more personal property to secure finance. It will also benefit banks and financiers, who will have greater access to international finance. Now more than ever we need to ensure that our banks can access international finance to boost investment in Australia, which in turn obviously provides jobs and financial security for Australian families.

As we transition to this new system, there will be some compliance costs, as you would expect, but nothing like the costs associated with red tape from the present system. As I said, the present system in some of the states involves searching through documents and wading through boxes—not quite trotting out the calf skin, as I suggested for some of those houses, but not far from it. So there will also be some costs associated with the Personal Property Securities Register. However, these costs will be covered by the small costs associated with the use of the register—all those articled clerks submitting all that money.

States and territories will have to formally pass legislation to refer their powers to the Commonwealth, and New South Wales, at the forefront, has already done so. As I said from the outset, all states and territories are on board with this long overdue reform. Any legislation that seeks to cut red tape, reduce compliance costs and bring about a more efficient system is welcome. The Labor Party have taken up this initiative, which, as we heard from the previous speaker, has its origins in the preceding government. We are particularly keen to do so because it will benefit those in society who need a helping hand. While it is easy to talk about going off to buy a big boat, the reality is that some of the people who need to access these securities are, unfortunately, using the services of a same-day moneylender or something like that. So anything that can reduce costs and hopefully defray some of the costs associated with lending money to people is a good thing. I commend the bill to the House.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to 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.

Robert McClelland (Barton, Australian Labor Party, Attorney-General) Share this | Link to this | Hansard source

in reply—I would like to thank members for their contribution to the debate. As members are aware, the Personal Property Securities Bill 2009 will implement a significant reform to Australian secured financing laws. Secured financing using personal property is an important element of the Australian credit market, worth several billion dollars annually. The current arrangements for security interests in personal property are unnecessarily complex. They involve artificial distinctions about the nature and form of the transaction, the jurisdiction and other formalities. These sorts of distinctions are unnecessary and inappropriate in a modern economy and add unnecessary complexity and expense. The current law reflects the ad hoc development of common law and legislation in this area, including over 70 various acts among Commonwealth, state and territory legislatures.

In place of this complexity, the bill will implement a single national law creating a uniform and functional approach to personal property securities. As I said in my second reading speech, by streamlining lending arrangements in this way the bill will provide greater certainty for both lenders and borrowers. It will lower the risk for lenders, improve the efficiency of secured financing and increase competition among providers of finance. The bill will more closely align Australia’s secured transactions law with that in other jurisdictions. In doing so it will increase the confidence of international investors and creditors and should make it easier for Australian businesses and individuals to secure finance in international capital markets.

Australia’s new PPS system will be supported by a single national online register of personal property securities. The new register will replace the existing patchwork of electronic and paper based national, state and territory registers. Reducing the number of registers will alleviate the confusion currently faced by businesses and consumers in trying to work out which register they need to use. Making use of the latest technology will mean the register is state-of-the-art and easy to use. Users will be able to search the register via a web browser or alternatively via a mobile phone using SMS. High volume users will be able to establish a direct business-to-government link to access the register.

As I pointed out in my second reading speech, PPS reform is part of the ambitious deregulation agenda the government is pursuing through the Council of Australian Governments. It is an example of the government’s continued commitment to cooperation between the Commonwealth, states and territories on regulatory reform, and it must be acknowledged that this reform would not take place without their cooperation. By working together we are bringing about significant changes that are essential to the modern Australian economy.

I should also acknowledge the important work of the Standing Committee of Attorneys-General in advancing PPS reform, including developing model legislation to refer power to the Commonwealth to pass the PPS bill. When I introduced the bill into the House I said that the New South Wales parliament had become the first to refer power to the Commonwealth. I am pleased to also report that referral legislation was introduced in Victoria on 11 August, Queensland on 1 September and South Australia on 9 September, and I look forward to the remaining states progressing their referral legislation shortly.

In conclusion, existing secured lending arrangements create barriers to businesses, especially small businesses accessing secured lending. By harmonising the law in this area and creating a national PPS system the bill will generate real benefits for all parties involved in secured finance. The bill provides a national solution to meet a very important national need.

Question agreed to.

Bill read a second time.

Ordered that the bill be reported to the House without amendment.