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

I rise to speak on the Personal Property Securities Amendment (Deregulatory Measures) Bill 2014. This is a bill which seeks to enhance the Personal Property Securities Act 2009. This piece of legislation before the chamber is not the most boring piece of legislation ever to pass through this parliament, but I think it is in the same postcode. The 2009 PPSA was proudly introduced by Labor. As earlier speakers have noted, it created a single national online register of securities interests in personal property within Australia. At the time it was introduced, it was described as important microeconomic reform. We did not have a red tape celebration day; it was just the business of good, sensible government. We did not put out a big red tape press release. Instead, we just got on with doing that incredible microeconomic reform which, as the coalition speakers have mentioned, produced incredible savings. This is why the then opposition supported that legislation.

The regime created by the PPSA remedied the evil of apparent ownership. Prior to the PPSA, a purchaser of property was at risk of being misled by an apparent owner that clear title was held by them. There was no independent way to determine if anyone else held an interest in the property contrary to the interest being offered. The PPSA regime allows a party to secure its interests 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.

Having been a lawyer in Queensland, I can say that the simplified version is almost like the Torrens title registry process for real property being rolled out across the nation. The second reading speech described the regime that Labor introduced 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.

I am very proud of that piece of legislation, and I particularly mention Dr Craig Emerson, the former minister who steered a lot of that through because it was not easy.

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 c's'. The regime that would be created would deliver more certain, more consistent, less complex and cheaper arrangements in relation to personal property securities. That is what it has provided to the people of Australia—certain, consistent, less complex and cheaper. That is a fair dinkum red tape reduction process, not the red crepe—that red material that they put out whenever there is a party. Every time they get rid of a comma, they have a press release, and get together and have a party, and say, 'We've reduced red tape.' This was real Labor reform that supported small business, although some small business did suffer—I will acknowledge that. And I note that there are people involved with the Attorney-General's office here in the adviser's box.

Small legal firms did suffer when we changed those security registers. My job as an article clerk was to head around to those registries and wait there in front of the public servants for the documents to be stamped, wait there for them to be registered, and try to keep our masters in the legal firms happy. The firm I worked at was Quinn & Scattini and my master Michael Quinn probably had not read the modern management handbook. The fear that came with being an article clerk, waiting for a form to be filled in correctly and then stamped, has now been simplified. As any article clerk would tell you, the real power in our society rests with the clerks who have the piece of paper and the stamp they are waiting to put on it. There is no power like that sort of power. Parliament is nothing compared to it.

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—we are one nation with states and territories—and then on more than one register to be fully effective. There were both electronic registers and paper based registers, and in some cases no registers at all. This resulted in not only confusion but unnecessary costs for everyone involved.

The Labor Party reforms were described as 'the most substantial reform in a decade' and there was an abundance of support from the commercial and consumer sectors. 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'. The Australian Bankers Association said they are 'very supportive of the two-pronged PPS reform proposals—register and substantive law reform'.

The reforms, while they made day-to-day transactions simpler and less expensive, required a complete mind shift for lawyers and their officers. 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 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 lawyers and their article clerks. It was the newly minted law graduate who often had the task of going from building to building.

The object of that monumental reform introduced by the 2009 PPSA under Labor was not to make life easier for lawyers but to make doing business in Australia more streamlined and less expensive. That object is being achieved. In fact, the World Bank gives a rating to countries on the ease of doing business. In 2013, under Labor stewardship, Australia climbed to 10th place from a previous 15th place in those rankings—proving that Labor knows how to look after business in Australia.

I will be interested to see, after that incredible assault on commas and full stops by the two red tape repeal days, where we will go. How high will we go? From reading the press releases, I think we will be No. 1, but I am waiting to see what the LNP actually produce rather than say what they will produce because they are kings and queens of artifice when it comes to real change for business. I note the Minister for Small Business is in the chamber and I commend him for his efforts in the budget in terms of helping to remedy the damage done by the last budget. Hopefully, he can have a moment in the sun and help small business because the budget did a few good things for small business. The 19,000 small businesses in my electorate of Moreton hopefully will recover from the throttling they received from the last budget.

The introduction of the 2009 PPSA is credited as being instrumental in that change from 15th to 10th. I look forward to the next red crepe day, where they put out the red streamers and say, 'We've done something,' and hopefully they will announce the World Bank ranking that Australia has achieved under them.

The World Bank publication that lists the rankings particularly commented on the PPSA reform, saying: 'In Australia the Personal Property Securities Act 2009 and associated regulations came into effect and a single, national online registry began operating. The web based registry allows creditors to conduct searches and register security interests in personal property at any time.' The World Bank, not exactly a left-wing group of commentators, recognise Labor's real reform. 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—something those in the legal profession should all be proud of.

The PPSA 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, and hire companies, as mentioned by the earlier speakers, benefit from the protections the regime offers. It offers protections to businesses by giving them rights over a registered security if a customer defaults in their obligations. Individuals purchasing property such as boats, cars or machinery can search the register via the PPSR website to ensure that there is no registered security interest that would prevent them getting clear title.

The bill before the chamber, the Personal Property Securities Amendment (Deregulatory Measures) Bill 2014, makes a minor change to the PPS regime in order to simplify the process further still. It is basically changing the definition of when a lease becomes a security interest. There is currently a provision that deems leases for serial-numbered goods—that is, mobile property such as motor vehicles, boats and aircraft—to be PPS leases if they are for a term of 90 days or more. That provision is to be repealed and leases for serial-numbered goods would be treated in the same way as all other personal property leases and deemed to be PPS leases if they are for a term of 12 months or more. This amendment will assist small to medium hire businesses by alleviating the requirement to register leases of less than 12 months. This amendment is a welcome addition to the simplified regime introduced by Labor in 2009—a real reform, a fair dinkum reform, that supports business—and that is why Labor supports this bill.

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