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

In the small time left to me, I would like to conclude that this bill remedies a terrible Gillard government bill passed back in 2009. The bill was an oversight that has seen tens of millions, if not hundreds of millions, of dollars of goods lawfully owned by small business being transferred to the financiers, the big banks and the insolvency companies. It was a terrible piece of legislation. It was an oversight. I acknowledge that the coalition did the wrong thing in opposition in supporting it. We should have picked this up in opposition back in 2009. We also need to act on the Romalpa clause. That is another area that we need to fix up. It has been done, and allows property from small businesses to be transferred to the large end of town. I hope that the member from Moreton in his contribution acknowledges the great mistakes that were made and the tens of millions of dollars that have been lost by the small business community because of this poor piece of Gillard government legislation.

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

The Personal Property Securities Amendment (PPS Leases) Bill 2017 seeks to amend the Personal Property Securities Act 2009, a piece of legislation that the coalition voted for. I cannot see any members from the 2009 parliament from the coalition that voted for this in the chamber at the moment. But certainly nearly the entire frontbench of the coalition voted for this piece of legislation. The member for Hughes is clearly seriously confused, because that 2009 PPS act was introduced by Labor, proudly, by the Attorney-General, Robert McClelland. It created a single national online register of security interests in personal property within Australia.

I could almost take a personal explanation later in the day, because I need to correct the member for Hughes, who is seriously flawed. Firstly, he referred to my speech of Wednesday, 16 September 2009—my wife's birthday, incidentally—so I went back to my speech. The member for Hughes said that I supported the legislation because it made more work for articled clerks. He totally misread my speech. I clearly said that we were clearing up the process—we were removing work from articled clerks. I referred to my time as articled clerk running around to those 70 different registers. The more legal work you do, the more people will pay. We turned 70 security registers into one. It was a great piece of legislation. It reduced red tape. It was a good thing to do. That is why the coalition supported it. That is why any sensible person would support it.

I looked at some other things that the member for Hughes said. I quote from Hansard:

With this legislation we are changing the minimum duration for which leases apply down from two years to one year. It was previously two years; it is now one year.

Member for Hughes, that is not what the legislation does. You need to talk to your Attorney-General. You need to actually read the legislation. This bill actually amends the Personal Property Securities Act to extend the minimum duration of a PPS lease from more than one year to more than two years. You have totally misrepresented what your government's legislation does. You need to make a personal explanation after question time, member for Hughes, so that you can actually point out what your legislation does. It was quite bizarre—what he was on—when the member for Hughes was speaking last night. I thought he was going to come in this morning and set the record straight. But no, he has chosen not to. And I would point out to the member for Hughes, going on about why this legislation has not been changed, that he is in his fourth year of government—the fourth year of government, member for Hughes. You are a member of the coalition government. If anything is going to be done, surely you are the ones who can do it.

So, I bring you back to my great pride in Labor's Personal Property Securities Act, because when it was introduced it was described as important microeconomic reform. I actually referred to it, in my speech, as basically stealing jobs from articled clerks. And I know that anyone who has been an articled clerk would have done a lot of that work in the fifties, sixties, seventies, eighties, nineties and noughties. But now that work does not exist, because we got rid of the red tape. Prior to the Personal Property Securities Act, a purchaser of property could be misled by an apparent owner that clear title was held by them. There was no independent way to determine whether anyone else held an interest in the property that was contrary to the interest being offered. The PPS regime allows a party to secure its interest in a property and to provide anyone who searches the register with knowledge of that security interest. Any interest in personal property can now be perfected by registering on the PPS register—effectively the Torrens title of non-land-based property, I guess.

The second reading speech by the then Attorney-General, Robert McClelland, described the regime as replacing:

… the existing complex, inconsistent and ad hoc web of common law and legislation, involving over 70 Commonwealth, state and territory acts. It will implement a single national law, creating a uniform and functional approach to personal property securities.

How could someone who is supposed to be a champion of small business not praise bringing 70 bits of red tape down to one? I mean, it is bizarre. I really am starting to wonder whether the Liberal Party has totally disconnected from those Liberal Party values Menzies used to trumpet. I am seeing so much erratic behaviour. Maybe it is from being too close to the Nationals. Maybe that is what it is. The Nationals are leading them astray, maybe. But the Senate committee: I call on all those present to try to set them straight—

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

The member for Hughes on a point of order?

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

Under '66A Interventions', I would ask the member for Moreton whether he would accept a question.

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

No.

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

Oh, come on.

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

You had your chance to correct the record. You chose not to do it. You have misled the people who listened to your speech.

Mr Craig Kelly interjecting—

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

Order! Member for Hughes, the member for Moreton has the call, and he will be heard in silence.

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

The Senate committee report on the bill in 2008 noted that the Attorney-General's Department described the objectives of the then bill as the four Cs: the regime that would be created would deliver more certain, consistent, less complex and cheaper arrangements in relation to personal property securities. And when you talk to lawyers today you see that. You see it time after time. Prior to the 2009 act, consumers and businesses had to negotiate their way through a minefield of unnecessary red tape. Some security interests had to be registered in more than one jurisdiction and on more than one register to be fully effective. There were both electronic registers and paper based registers and in some cases, some jurisdictions, there were no registers at all. This resulted not only in confusion but in unnecessary costs for everyone involved—more work for lawyers, more costs for consumers. The reforms were described as 'the most substantial reform in a decade'. The is what the member for Hughes is asking the Labor Party to apologise for and I guess he is also asking everyone who was in parliament in 2009 and is currently here who voted for this legislation. It is bizarre. I am hoping that the Prime Minister will try to rein him in.

Let's look at what the Consumer Action Law Centre said. They supported the idea of 'national personal property security laws and a register that makes that work more efficiently and laws that again create certainty and efficiency in that system'. But let's hear from some other 'crazy, left-wing' organisation—like the Australian Bankers' Association! What did they say? They said that they are 'very supportive of the two-pronged PPS reform proposals—register and substantive law reform'. I know they might have Anna Bligh working for them at the moment, but they are not a left-wing organisation—and I should stress, member for Hughes, that I was being ironic when I said that.

The reforms, while they made day-to-day transactions simpler and less expensive, required a complete mind shift for lawyers and articled clerks, which was the point I was making in my speech in 2009. The common law and equitable principles previously underpinning the law of personal property securities were all but abandoned for the far less complex PPS regime. The concepts of a floating charge and crystallisation of a floating charge are now replaced with the straightforward rules provided by the PPS Act. That was certainly a relief to a lot of young law students, I am sure—turning 70 into one—and, as I said, maybe even articled clerks. It was the newly minted law graduate who often had the task of going from building to building with various forms to register personal property securities on the 70 different registers that existed throughout Australia.

The object of that legislation, brought in by the Labor government, by Robert McClelland—this monumental reform—was to make life easier for lawyers but also to make doing business much more streamlined and less expensive. The Labor Party put the consumer first. That object has been achieved. That is why the Prime Minister voted for it. That is why the Deputy Prime Minister, in the Senate, voted for it. That is why every sensible Liberal Party person who believes in small business voted for it. Yet we have the member for Hughes calling for them to apologise—unbelievable.

The World Bank gives a rating to countries on the ease of doing business in that country. In 2013 Australia jumped from 10th place from a previous 15th place in these rankings. The introduction of the 2009 PPS Act is credited as being instrumental in improving that rating. How are they going under the coalition government? How are we going in terms of ease of doing business at the moment, in the last four years of this shambolic government that we have here. The World Bank publication that lists the rankings particularly commented on the PPS reform, saying:

In Australia the Personal Property Securities Act 2009 and associated regulations came into effect, and a single, national online register began operating. The web-based registry allows creditors to conduct searches and register security interests in personal properties at any time.

In the World Bank's assessment of which country has the most legal rights for borrowers and lenders, Australia had the highest ranking attainable in 2013.

The PPS Act, when it was introduced in 2009, revolutionised the way business was conducted in Australia. Everyone from small businesses, large supply companies, finance companies, banks and ordinary Australians benefited from the protections the regime offered. Labor is proud of these reforms; Labor will not be apologising for doing the right thing by small business and big business. The PPS reforms were real regulatory reform that cut red tape, lowered costs for businesses and improved productivity. That term 'red tape' is one I have heard a lot in the 44th Parliament and 45th Parliament—not so much in the 45th but certainly the 44th Parliament.

I remember the Liberal government's obsession with red tape repeal. Let's be fair dinkum, it amounted to attacking a couple of commas and a few brackets. It is what every sensible government does, but it was the great visionary achievement of the Abbott-Turnbull conglomeration—celebrate red tape repeal day. I remember it because it was like an obsession. You are lucky, the class of 2016, you did not have to hear some of the speeches about 'We attacked some commas', 'We took it to those semicolons'. It was like being in the trenches in World War I. It was unbelievable that they could focus so much on it, and I am really not kidding. In fact, I have to this day the current governments Cutting Red Tape web page, which is subheaded 'The Australian Government's online resource for regulation reform'. I printed it off yesterday, and it gives these tips:

The Australian Government's Guide to Regulation has been written to help change the way policy makers think about regulation and to inform the consultation and policy making processes.

Families, businesses and community organisations pay the price for poor regulation and the purpose of this Guide is to help make better regulation, not more regulation.

Strangely, this Prime Minister is not having his red tape celebration days. He is leaving the commas alone or maybe he is just doing what governments do—he is doing that part of the job rather than having champagne and confetti every time he attacks a semicolon. But we do have this government website telling us how great the government is for doing its job.

We did have those four repeal days—spring and autumn repeal days in 2014 and 2015. We normally started with the Omnibus Repeal Day Bill. Sadly and unbelievably, not all of the bills were actually passed on the celebrated repeal date. For example, the Australian Charities and Not-for-profit Commission (Repeal) Bill 2014—and I am sure the member for Fenner would know this—did not pass. Most of the bills were to abolish bodies that were actually defunct, to consolidate previous bodies and repeal spent and redundant provisions and acts and, of course, to eliminate those pesky commas and unruly full stops. It was a jihad on grammar—a grammar jihad. Thankfully, the current Prime Minister wanted to distinguish himself from that great visionary, the member for Warringah, and so he decided that we would not have these repeal days. Instead, he has focused on those great challenges, like responding to dangerous climate change—no, I am just kidding, Deputy Speaker—he is instead defending people's right to be bigots or he is focusing on the idea of using coal to pump water up a hill. He is doing some great stuff. He is definitely a man of vision—

Michael McCormack (Riverina, National Party, Minister for Small Business) Share this | Link to this | Hansard source

It is more than I can say about you.

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

This bill before the chamber, which the member for Hughes was attacking, is actually a sensible response to issues that were raised by a number of submissions to the Whittaker review and by a number of recent Supreme Court decisions concerning problems with the operation of the PPS act in relation to PPS leases. The bill extends the minimum term of a PPS lease from one year to more than two years—I do hope that the member for Hughes notes that. Any PPS leases which run for more than two years will be 'a security interest' that should be registered on the PPS register. It is a sensible tweak to the legislation that addresses concerns about the burden on small business, particularly in the hire and rental industry, where short-term lease arrangements or indefinite-term leases are commonplace. Labor is very happy to support this bill, which will help small businesses.

Michael McCormack (Riverina, National Party, Minister for Small Business) Share this | Link to this | Hansard source

I thank the honourable members for their contributions to be Personal Properties Securities Amendment (PPS Leases) Bill 2017. The Personal Properties Securities Act 2009 is an important reform which established a single national set of rules for secured credit using personal property. The framework provides greater clarity for both lenders and consumers than ever before, and, since its introduction, Australian businesses are now more readily able to use their assets as security for obtaining cost-effective secured finance.

It is clear, though, after a period of time that there are compelling reasons to make adjustments to the act. The regulatory impact the act has had on short-term equipment hire businesses is one such case. Businesses with high volumes of short but indefinite term leases have had difficulties adapting to the framework and have struggled to meet the administrative burden. And this government is all about lifting administrative burden and cutting through red tape.

The consequences for small and medium enterprise hire operators in some circumstances can be quite severe. Extending the minimum duration of a lease before it becomes a PPS lease will lift the burden the act is having on the hire and rental industry. Leases with an indefinite term will only require registration once they have exceeded two years in length, and fixed-term leases will only require registration if they are for a term of more than two years. The changes to the PPS lease time frame in this bill are aimed at ensuring that the short-term hire and rental sector remains a strong contributor to the Australian economy without disrupting the effectiveness of the operation of the rest of this important national framework.

Deputy Speaker, I would like to respond to the member for Isaacs' comments on the Whittaker review. The government is considering the total of the 394 recommendations from the report of the review of the Personal Property Securities Act. The report is comprehensive; it provides recommendations on technical and complex aspects of the legislation which are interlinked and must be progressed as a complete package. The bill deals with an urgent matter of reform which can be dealt with now, independently of other issues addressed in the report.

This bill provides relief to the hire and rental industry without disrupting the proper operation of the rest of this important national framework. The government, through the Attorney-General's Department, is working closely with the Australian Financial Security Authority to develop a response to the report which will benefit businesses and consumers to the maximum potential.

In conclusion, a range of industry representatives have been consulted on these measures in order to preserve the balance between competing interests of all stakeholders who deal with the act on a day-to-day basis. With the assistance of industry and the support for the bill provided by state and territory governments, these measures will succeed in providing short-term hire businesses with appropriate relief.

Question agreed to.

Bill read a second time.