Michael Keenan (Stirling, Liberal Party, Shadow Minister for Justice, Customs and Border Protection) Share this | Link to this | Hansard source

I rise to talk on the Personal Property Securities (Corporations and Other Amendments) Bill 2011. As defined on the Attorney-General’s website, personal property is any form of property other than land or buildings and fixtures which form part of that land. It can include tangibles such as cars, boats, machinery and crops as well as intangibles such as shares, intellectual property and contract rights. Personal property securities involve an arrangement where an individual or business offers personal property, which includes all property except for land, in order to secure a financial loan provided by a financial lending institution such as a bank.

As the system currently stands, Australia has different laws and registers in each state and territory. The personal property securities reform brings together the different Commonwealth, state and territory laws and registers under one national system. The bill makes some minor and technical amendments to the personal property securities regime, which was introduced with coalition support in 2009. This regime comes into effect this year. The regime rationalises the current Commonwealth state and territory laws on securities and personal property to create one national set of rules and a single national online register. It establishes one comprehensive law with clear rules.

The personal property securities legislation arises from an Australian law reform reference in 1990. The matter was pursued through COAG, which in 2007 endorsed the model of a national system. It should be noted that the former Attorney-General, the member for Berowra, gave the 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, states and territories.

The amendments proposed by this bill clarify that the regime does not affect a secured party’s capacity to appoint or veto the appointment of a company administrator under a transitional security agreement; confirm that the rights and liabilities of receivers and administrators in respect of pre-appointment transactions are unchanged; ensure access to the third party data for consumer protection purposes; and prevent access to the registry for the purpose of sale of the data. There are also some technical amendments in respect of powers of the registrar to deal with accession to the regime by states that have not yet adopted the relevant version of the Personal Property Securities Scheme, as amended in 2010 and by this bill.

As noted in the bill’s explanatory memorandum, the bill will make a number of amendments to provide exemptions to the rules on taking personal property, free of security interests, for temporarily perfected transitional security interests and transitional security interests that were not previously registered by serial number; ensure that the definition of security interest is consistent with the New Zealand legislation and remove any potential for confusion; clarify that CHESS securities are intermediated securities and the means by which CHESS securities can be subject to control; ensure access to third-party data through the register, as an important consumer protection measure; impose conditions on accessing and using data on the register, to ensure that parties cannot sell this data and undermine the Commonwealth’s ability to recover costs associated with the implementation and ongoing administration of the PPS system; enable the registrar to investigate breaches of the rules authorising searches of the register and registration of security interests on the register; and clarify the provisions on security interests in authorised deposit-taking institutions and the provisions on control of inventory and accounts.

In conclusion, these amendments were wisely recommended by the Senate Legal and Constitutional Affairs Legislation Committee report on the 2010 amendments, and the coalition is happy to support the proposed amendments in this bill. I therefore commend the bill to the House.

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

I rise to voice my support for the Personal Property Securities (Corporations and Other Amendments) Bill 2011. This bill implements a number of minor and technical amendments that were recommended by the 2010 Senate inquiry by the Senate Legal and Constitutional Affairs Legislation Committee. Before we passed the Personal Properties Securities Bill in 2009 there were more than 70 Commonwealth, state and territory laws relating to security interests on personal property. Whilst that was good for article clerks and baby solicitors, in terms of giving them work and something to do—as I horribly remember, from my days as an article clerk—it was not good for business, it was not good for individuals with security interests and it was not good for the running of the country. So the Labor government introduced one national law governing security interests in personal property and a single, national online register.

Personal property is any property other than land, so we are talking about either tangibles like cars, boats, machinery or crops, and intangibles such as shares or intellectual property. Personal property securities are interests in personal property that secures a payment. So when the new scheme comes into force from October this year—as I am sure lawyers are eagerly looking forward to—the new online register will replace more than 40 registers around the country, of which many are still, in 2011, paper records. So, unfortunately, article clerks will have to look for new things to entertain their time!

Personal property securities reform is happening because of the 2008 COAG agreement. This bill will amend the Personal Property Securities Act 2009 to address issues raised by stakeholders and practitioners. Some of the minor and technical amendments include correcting drafting errors, clarifying certain definitions, clarifying that the intention of the act is not to interfere with existing rights of parties under the Corporations Act and introducing certain practical measures to ensure the regime is appropriate for users. I am sure the member for McPherson, who is in the chamber, will be looking forward to these changes when they come in, as are many other Australians.

Under the 2008 COAG agreement all states and territories agreed to refer their powers regarding personal property securities to the Commonwealth. This bill enables states that have not yet passed the necessary legislation to refer their powers to adopt the relevant version of the PPS Act and refer power to the Commonwealth. Personal property securities reform is good for the finance sector, it is good for business and it is good for consumers. 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, for a small fee they will be able to do an online search to see whether a particular car is being used as a security for a loan—and, rather than searching around different states, they will be able to cover the entire nation. In my electorate—in fact, just down the road from where I live—is the Moorooka ‘magic mile of motors’, which will benefit from this process because people will be able to buy or sell a car and know whether it is encumbered or unencumbered. I am sure the member for McPherson would agree that this will be a great thing for Australian consumers.

Small business will benefit, as they will have greater access to finance at a reduced cost. 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. That will be a great thing, because the banks and financiers who lend money will have a better understanding of whether something is encumbered and it will therefore be easier to lend money to people. That benefits small business, it benefits the individual who is making a decision about purchasing something and it also benefits banks and financiers, who will be able to lend for something knowing it is not encumbered. It will also benefit banks and financiers because, as I said, they will have greater access to international finance, so this should make money cheaper. Therefore money will be able to flow to those people who are in need and able to access credit, and they can then make considered purchases—and that is a good thing. Now, more than ever, we need to ensure that our banks can access finance to boost investment in Australia. This, in turn, provides jobs and financial security for Australian families.

The bill will also slash costs and red tape, as you would expect from our consistent national approach. I particularly commend the Attorney-General and Minister Emerson, who has been doing some great work in terms of slashing costs and slashing red tape. The amendments in this bill are very minor; however, they do show the government is listening to stakeholders and responding to their concerns. This bill will ensure certainty for all parties when the national system comes into play from October 2011. 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 commend the member for Moreton and other speakers for their contributions to this debate. As mentioned throughout the debate the Personal Property Securities (Corporations and Other Amendments) Bill 2011 makes the final set of amendments to the Personal Property Securities Act 2009 and consequential amendments to a number of other acts before the personal property securities regime comes into effect later in the year. Personal property securities are currently governed by complex regulatory arrangements. The PPS Act, as it is known, will replace these with a single, national, functional approach. The PPS reform will simplify over 70 Commonwealth, state and territory laws and replace the many existing registers of interests that complement these laws, with one PPS register.

PPS reform is essential for making secured financing more accessible and efficient by lowering risks for lenders, increasing competition between finance providers and providing greater certainty for both lenders and borrowers. This bill has been developed with the assistance of stakeholders including business, consumer advocates, state and territory governments, lawyers and financiers. Essentially, the amendments to the PPS Act will regulate the use of the PPS register, ensure that the regime is consistent with commercial practice, facilitate consumer access to data held on other databases, and correct minor errors and update certain definitions. In short, the amendments in the bill to the Corporations Act will also clarify that the intention of the regime is not to interfere with existing rights under that act.

In conclusion, the PPS reform is a key aspect of the government’s deregulation agenda. I would like to acknowledge the assistance of the states in achieving this reform. New South Wales, Victoria, Queensland and South Australia have already passed referral legislation, and Tasmania and Western Australia will be passing their referral legislation in the coming months. The states and territories have also made consequential amendments to their legislation dealing with personal property securities interests. The passage of this bill, and the commencement of the PPS regime later this year, are significant achievements and will deliver major benefits to many sectors in the Australian economy. I commend the bill to the House.

Question agreed to.

Bill read a second time.

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