Mark Dreyfus (Isaacs, Australian Labor Party, Shadow Attorney General) Share this | Link to this | Hansard source

I rise to speak to the Personal Property Securities Amendment (Deregulatory Measures) Bill 2014. This bill makes a small amendment to the Personal Property Securities Act, passed by the Labor government in 2009. As the explanatory memorandum to this bill notes, the PPSA was an important and long-awaited microeconomic reform. The Labor government established a single national system for the creation, registration and enforcement of security interests in personal property. Before the enactment of the PPSA, personal property securities in Australia were governed by a complex mess of common-law principles and legislation, including more than 70 different statutes. This was obviously an unacceptable state of affairs.

Personal property securities play an important role in the Australian economy. Secured credit is a significant part of the Australian credit market, and it is vital in a range of business applications. The cost, confusion and uncertainty around security interests in personal property before Labor's reforms were a real burden on business—and particularly small and medium enterprises. In government, Labor worked hard to alleviate that burden. The Productivity Commission estimated that our reforms saved some $70 million a year in compliance costs.

This bill is a modest addition to that work. It clarifies and simplifies the operation of the PPSA scheme with respect to some types of short-term leases. Labor is happy to support it. A large reform such as the PPSA will always require this sort of finetuning.

The PPSA provides for the circumstances in which the lease of goods will constitute a security interest for the purposes of the act. This includes leases for a term of more than 12 months, or indefinite leases. However, the act also presently applies to leases for 90 days or more of 'serial numbered goods', a category which includes motor vehicles. The bill will abolish this stipulation.

The hire industry has expressed its concern about the 90-day rule. As the explanatory memorandum notes, the complexity of having two rules covering different goods and different lease terms has proven confusing and costly to deal with. Accordingly, Labor is happy to support this minor but evidently worthy tweak to the PPSA scheme. In fact, we wish there was more of this sort of activity from the government.

This bill was introduced on the first of the government's so-called 'repeal days' on 19 March 2014. Amid much fanfare, the government committed itself to an ambitious deregulatory agenda. Announcing the introduction of this and a handful of other bills, the Prime Minister said in the House that his government would be holding 'the biggest bonfire of regulations in our country's history.' As has so often been the case with this government, however, its action has not lived up to its rhetoric. Had they had some policy ambition, had they done the work, had they properly consulted with industry, the government could have brought in any number of bills like this one. They could have brought any number of careful, sensible deregulatory reforms into the parliament. But this is a lazy government. This is an erratic government. This is not the 'careful', 'methodical' and 'grown-up' government we were promised.

When they do cut, they cut recklessly. They cut without consulting, indeed apparently even without thinking. This is a government which sought to abolish Australia's national security legislation watchdog at the same time as pressing ahead with successive waves of new national security laws. This is a government committed to repealing the Australian Charities and Not-for-Profit Commission even over the objections of those organisations it regulates! This is the government which hopelessly bungled its attempt to repeal Labor's Future of Financial Advice laws.

But for the most part, the government is content with mere showmanship. They brag about repealing spent, inoperative regulations. They boast about correcting typos and drafting errors on the statute book, claiming it as a bold deregulatory reform. This is routine work. It is house-keeping—the sort of activity all governments undertake as a matter of course, and certainly not a reform of any kind.

Given this sorry performance, it is no surprise that the business community—supposedly the beneficiaries of the government's deregulation agenda—are sorely disappointed. After just the first repeal day, the Business Spectator wrote that the Abbott government's 'bonfire of red tape had fizzled'.

Amidst all of the recklessness and sheer nonsense from the government, this lonely bill contains a small, sensible reform of a business regulation. Undoubtedly there are many other opportunities in our regulatory framework for such reforms, if only the government would do the work to identify them, to consult with those affected and to think carefully about the consequences of changes to the law.

I commend the bill to the House.

Wyatt Roy (Longman, Liberal Party) Share this | Link to this | Hansard source

It was very interesting listening to the shadow Attorney-General's contribution. He said that we need to consult and that this does not mean anything. I invite the shadow Attorney-General to come up to Caboolture and talk to Ian Rogers from my electorate. The Attorney-General is laughing. I think Ian would like to have a chat because this bill comes from a discussion that the now Assistant Treasurer, the former parliamentary secretary to the Prime Minister had with Ian in Caboolture. Ian has a hire firm and the bill that we have here today will save Ian—

Mark Dreyfus (Isaacs, Australian Labor Party, Shadow Attorney General) Share this | Link to this | Hansard source

We support it.

Wyatt Roy (Longman, Liberal Party) Share this | Link to this | Hansard source

If you want to come and have a chat to Ian, we can explain to him why the thousands of dollars that he is going to save as a result of this business does not mean anything. I think the word that the shadowy Attorney-General used was a 'fizzle'. I think this bill will make a very big difference to businesses in my electorate. Ian has said it means he can hire new staff and create jobs in the electorate and in Caboolture.

I am very proud to rise to speak on the Personal Property Securities Amendment (Deregulatory Measures) Bill 2014, a significant piece of reform. This is part of something that exemplifies the government's commitment to slash red tape by a billion dollars a year. There was bipartisan backing when the former government introduced the Personal Property Securities Act in 2009. It fundamentally changed the system for security interests in Australia by establishing a single national law governing the creation, registration, priority and enforcement of those interests in personal property. More than 20 state, territory and Commonwealth property and security registers were replaced as well as more than 70 pieces of supporting legislation. The act has resulted in a single online personal property security register known as the PPSR, with initially migration of 4.7 million registrations.

In simple terms, under these changes any holder of a security interest in a personal property must register with the PPSR to ensure that their claim to that property is maintained. One of the primary objectives of the regime was to provide greater confidence to lenders in the security of their interests. But concerns have been raised by Australian businesses, especially the hire and rental industry, over the significant administrative burden that has resulted, including substantial compliance costs and fees. Under the PPSR, personal property generally includes goods or inventory, intellectual property, shares, debts and contractual rights.

On our side of this place, we recognise that the great creator of wealth, prosperity and employment in our nation is not the government; it is the private sector. The best thing that we can do as a nation is unshackle this driving force of the economy to scrap unnecessary regulations that businesses in my electorate spend hours, days and weeks attempting to satisfy. Their staff are tied up in red tape rather than responding to the needs of the customers and making sales.

If further reform is required so that our businesses can grow and more fully prosper, we will listen and we will act. And so it was with this reform. More than 12 months ago, I organised a function in my electorate, as I was informing the shadow Attorney-General, with the Parliamentary Secretary to the Prime Minister, the member for Kooyong, the honourable Josh Frydenberg, where local traders told how excessive regulations were stifling their success. The now Assistant Treasurer blazed the trail for implementing the government's colossal deregulation agenda. After one of the function attendees, Ian Rogers—who I already mentioned—mentioned these elements of the PPSR, I initiated further discussions with the parliamentary secretary, who then conferred widely with the hire and rental industry. The seeds of this consultation helped sow the legislation before the House today. Our approach is indicative of an inclusive and constructive government, which understands business and is determined to eliminate the fiscal drag of bureaucracy and overregulation.

This legislation proposes to unclutter the rules on when a lease is considered a security interest. Under the PPSA, arrangements where property is deemed a security interest include the lease of goods where the lease term is for more than 12 months or an indefinite term and the lease of serial-numbered goods such as motor vehicles, boats and smaller engined equipment for 90 days or more. The two deeming provisions have become a major headache for rental and hire companies. Confusion has reigned over two rules covering different goods and different lease terms, with some businesses forced to make multiple registrations to ensure that they are covered, all at a cost of money and time. This bill will repeal the provision deeming leases of 90 days or more for serial-numbered goods to be security interests. In addition, the government will amend the PPSA regulations to encompass a more reasonable and sensible definition of 'a motor vehicle'.

Here is the kicker: under the legislation currently, if a hire company chooses not to register its equipment, it risks losing it if the second party renting the goods becomes insolvent. A liquidator may be able to take title and sell the property to help pay back creditors. Only the successful passage of this bill into law will mean that hire firms leasing serial-numbered goods for between 90 days and 12 months will no longer have to register the equipment in order to protect their ownership rights. Instead, for these leases, a hire business would rely on proof of its ownership of the goods—that is, the lease agreement—to avoid loss in the event of a customer's insolvency or where the customer had sought to sell the goods to a third party. This would align the PPSA with PPS regimes in other common-law countries such as New Zealand and Canada.

When he spoke up on the impact of the 90-day rule, R&R Hire's Ian Rodgers told the then parliamentary secretary and me about our local business community and how it was costing him thousands of dollars a month in registration fees and compliance costs, including encumbering his staff with paperwork instead of their doing their job, which they could otherwise be doing, growing that business and potentially employing more people.

They're costs I've been absorbing …

That is what he said. He did not mince his words. He said:

There's no other word for this regulation but ludicrous. Around the country, we've seen multiple cases of hire companies which have lost excavators or other machines to their customer's liquidators.

But, with the emergence of this bill, he has since told our local media:

… after years of trying to get something done, we've got this relief within six months of raising it with Wyatt and Josh.

He said, 'With this change, we've been able to put the cost we've been absorbing into growing our business.' He added:

It's been a hell of a result.

The amendments in this bill are a huge win for Longman's local hire companies, including Skyreach, which, like R&R, is located in Caboolture. I am very happy to have played my part.

As I mentioned, the amendments in this bill sit inside our red-tape repeal program, which was underscored by the government's initial red-tape repeal day, where more than 10,000 acts and regulations were axed, removing more than 50,000 pages from the statute books. It was the first of many dedicated repeal days. Indeed, earlier this year, in the third such day, another $305 million in net red-tape reduction was achieved, further easing the burden on Australian businesses, community organisations, families and individuals.

The coalition set itself a target to make decisions reducing the regulatory burden by a billion dollars a year. Not only did we exceed that net target by more than double in our first year, but we are well on our way to meeting a new target of a billion dollars worth of deregulatory decisions for 2015. Associated benefits for small business include the repealing of the carbon tax, which has removed a $9 billion a year hit on the economy and is saving more than $85 million a year in monitoring, record-keeping and reporting costs; establishing a dedicated small business hotline at the Fair Work Ombudsman so small businesses can access fast, binding advice on employment terms and conditions; using standard contract terms for government procurements under $200,000 and using credit cards for payments under $20,000 so small businesses can be paid sooner—

Bruce Billson (Dunkley, Liberal Party, Minister for Small Business) Share this | Link to this | Hansard source

Hear, hear! Good measures!

Wyatt Roy (Longman, Liberal Party) Share this | Link to this | Hansard source

a great measure implemented by the minister at the table, the very effective Minister for Small Business. Actually, in the next line of my speech, I mention that we have a small business minister in cabinet, a very effective and talented Minister for Small Business. That is so that the coalition government can bring a focus to reducing the tax and paperwork burden facing small businesses.

We want to see small businesses soar, not falter as they did under the former Labor government. Labor's red-tape legacy is well documented: 40 new or increased taxes and more than 21,000 new regulations. We are untangling the mess that has enveloped our businesses, schools, hospitals, community groups, families and individuals, a mess that has choked productivity and an outcome that has led to costs being passed on to everyday Australians.

As Sir Robert Menzies once said, we want fewer forms and more reforms—in other words, fewer costs and more jobs. I would like to once again thank the Assistant Treasurer and the now Parliamentary Secretary to the Prime Minister, the Hon. Christian Porter, for working so hard to take down red tape and for being prepared to actively listen to the local businesspeople of my community. The coalition government's red-tape reduction program is about seeing Australians get ahead and plan their future with confidence. I proudly commend this bill to the House.

Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

I am actually quite delighted to see the Personal Property Securities Amendment (Deregulatory Measures) Bill 2014 before the House today, although I preface my speech by saying that, when I did see it on the Notice Paper for today, I was a bit confused and surprised because, quite frankly, I thought I had spoken on it before. I remember going through the detail. I remember refreshing my memory of what we did back in 2009 when we brought together over 70 pieces of legislation to create a single way of dealing with personal property securities. I remember the Labor Party's work on that, and I remember these amendments being put forward by the government. I remember preparing to speak on it. I remember it.

I thought I am sure I have spoken on it, so I went back through my old speech notes to see. I had to go back to May last year to find where I had prepared for this speech because this bill was introduced to parliament a year ago. It was scheduled for debate on and off a couple of times and then disappeared into the aether, so I have not spoken on it before. I prepared to speak on it. I prepared to say, 'The Labor Party supports this, this is good and this is good. Small pieces of reform build on a lot of hard work—really good. It will help a number of small businesses. Let's do it. Let's go for it.' I remember preparing that speech and I never got to give it. A year later, I do get to give it and I am in fact making that speech. I would say to you—

Michael Sukkar (Deakin, Liberal Party) Share this | Link to this | Hansard source

Well get on with it!

Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

I am going to take that interjection, because I am going to say to the member interjecting when he says 'Get on with it' that we probably should have said that to the government a year ago when it put this bill to the parliament, which everyone supported, that it could have gone through in 10 minutes and then they sat on it for a year.

The member for Longman clearly got out his speech from a year ago as well. When he says it only took six months—how pleased Ian from Longman was that it only took six months from the first time he mentioned it to Josh and Wyatt—that was six months before May last year. It has now been 18 months. This is a bill which could have been passed anytime in that 12 months. This is a bill they could have added to their rather fictitious total of red tape reduction last year. This is a bill which could have actually saved the work of small businesses last year because it had the support of both sides of parliament.

I suspect that it is in the House today because the government does not actually have much other legislation. If it did, it would probably still be sitting on the table. You look at what we are discussing in the parliament today—and I am pleased that the 100th anniversary ministerial statement is being debated in this House. But traditionally, because of the amount of work this House does, in past parliaments most of the legislation that we are debating today would have been in the Federation Chamber. This one certainly would have been because it has the support of both sides and is non-controversial, so it would have gone through in the second chamber and been handled in a very short period of time.

I think the member for Longman also spent most of his speech talking about the work that was done by Labor in 2009. He spent about two or three minutes talking about what this bill is actually about. That is not surprising because that is where the bulk of the work was done. In the normal course of business, by the way, the government of Australia deals with the consequences of our history and having six states and regulatory regimes that build up in each state and do not match. At some point a competent federal government finds a way to work with the states and amalgamate all those different regimes and put them together in one federal act, and that is what we did—incredibly difficult work. Not a song a dance, not a bonfire red tape repeal day when we did it; we just did it back in 2009. That is when the work was done.

With any extremely complex piece of regulation and with so many different regimes—in fact, there were 70 pieces of legislation, 23 different state and territory registers prior to 2009—when you deal with red tape regulatory reduction there will be things that you did not think of that come up. It is the normal work of government every day to gradually, bit by bit, work those things through, to consult with industry and bring them to this House, and hopefully put them to the House for debate not just sit on them for 12 months. That is what this bill does. It deals with two particular unintended consequences which have caused a certain amount of pain for small business. It is really good to see them finally—a year and a half, not six months but 18 months after first raised with Wyatt and Josh by Ian in Longman—get to this House where they will no doubt go through quite quickly now that the government has decided to act on it and not just talk about it.

There are two aspects to this bill that are the guts of it. One is that at the moment there are two timeframes for registration of interests. One is for motor vehicles and a number of other assets that are leased for 90 days or more or for 12 months or more. This just removes the 90 days. The government did consult well on this. They put out three different options including leave it as it is, making other changes, or this option. This was the one which received the most industry support and appears to be the simplest and we support it. The consultation work in that six-month period was quite good and the outcomes are good. What is not good is that they then sat on those good outcomes for 12 months and left business in the position that they are now railing against—business was in this terrible position. In the last 12 months there was an answer. They could have brought it forward at any moment and they did not.

The second one is really quite interesting. I have hired a Wacker Packer myself recently. Apparently it turns out that a Wacker Packer is a motor vehicle—

Bruce Billson (Dunkley, Liberal Party, Minister for Small Business) Share this | Link to this | Hansard source

I hope it finished well.

Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

It did finish well. I can tell you a Wacker Packer is not a motor vehicle. It is very good at packing down road base and crushed granite—excellent—but it is not a motor vehicle. It is not a car. You cannot actually go far on it. It is covered by the 2009 act in the way that it is because of one word. We are actually here changing one word. A lot of the red tape reduction that we have seen over the last year by the government was changing one word—it was changing e-mail into email, or a few things like that, many thousands of times. This is a change which does make a red tape reduction.

The current definition of a motor vehicle includes an item capable of travelling at speeds of at least 10 kilometres an hour, or which has one or more motors with a total power greater than 200 watts. A Wacker Packer does not go 10 kilometres an hour—I can tell you that as well—at least not in a horizontal direction, but up and down it certainly does. It has a motor and it has power greatly exceeding 200 watts, so it gets caught in that definition. The new definition changes one word—it changes 'or' to 'and'—so that a motor vehicle will be something capable of travelling at speeds of at least 10 kilometres per hour 'and' which has one or more motors with a total power greater than 200 watts. It is a very simple amendment which takes out something which was clearly an accidental outcome of the original bill.

Again, it could have been done unbelievably quickly with phone call and a quick amendment. That is the work of government. The fact that this government in many ways is holding its work for so long before it brings it to the parliament, even when there is general consensus, is perhaps one of the reasons we do not have much legislation in this House. I am quite astonished when I go to caucus meetings every Tuesday and look at the list of legislation. I look for the legislation that actually matches the rhetoric. I look for legislation that is about growth, opportunity and removing barriers. Here is an actual example of it and it has been sitting in the back cupboard for a year. It is very difficult to explain why that would be the case.

That is really all I have to say on this bill. They are important amendments to the act. They will impact on a number of businesses, particularly in the car hire area and a few other areas as well. It will reduce their paperwork. These are actually good amendments. They are the kinds of amendments that governments from both sides of this House make. They are important. They should be mechanical amendments and handled quickly. They are traditionally handled in the other house because we usually debate controversial bills in this House. There usually are some, but there are not any at the moment. There is very little legislation coming before this House. It is good to see it finally here. I hope it goes through speedily. I hope it is also scheduled in the Senate very quickly so it does not have to wait a year to get in there as well because in that case it would be another year for something we all agree on. I repeat what the member for Deakin, who interjected earlier, said: get on with it.

Michael Sukkar (Deakin, Liberal Party) Share this | Link to this | Hansard source

I am rising to speak on the Personal Property Securities Amendment (Deregulatory Measures) Bill 2014. After hearing the member for Parramatta's contribution we now understand fully what the Rudd-Gillard-Rudd government was all about. The member for Parramatta said: 'This is just the normal work of government. This is just the ordinary work that we do.' She forgot that the Labor Party increased the number of regulations by 21,000 in six years. When they came to office they suggested they would have a one-in one-out policy for regulations. By the end of their term there were an additional 21,000 regulations. So when the member for Parramatta says, 'This is the ordinary work of government,' quite frankly, I scoff because their record is absolutely outrageous.

Whenever we are discussing deregulation the Labor Party speak as though they are the champions of deregulation and this just happens and it should just ordinarily happen. If that is the case, why is their record so dismal in this respect? In the small business sector 519,000 jobs were lost in their six years of government. Forgive me, member for Parramatta, if I do not accept your rhetoric. For the member for Parramatta to spend the vast majority of her contribution criticising this bill and in the end supporting it I think indicates the hollow rhetoric she was engaging in.

But, as the name suggests, the purpose of this bill is to continue the process of simplifying the personal property securities legislative regime that operates in Australia with a particular view to limiting and reducing the administrative burden placed on all businesses but particularly small businesses. I know the member for Parramatta thinks these things are not worthy to talk about, but how do we help small businesses get ahead? We get out of the way. The Labor Party always talks as though the marker of success of a government is how much legislation we pass in this House. Well my marker of success is the opposite. The fewer pieces of legislation we pass in this House, the more we get our hands out of small businesses' pockets and the fewer forms we impose on small businesses to fill out are my markers of success.

The member for Parramatta talked about wanting to see a full board of legislation. She said she was disappointed that there is not a full board of legislation, but I have the absolute opposite opinion. I am extraordinarily happy when government is getting out of the way and is allowing our citizens and small businesses to do what they do best, and that is create wealth and opportunities for themselves. We have seen that governments do not create those opportunities. I think the member for Parramatta spelt out very nicely, but probably unwittingly, the core values and beliefs of the Labor Party—that the marker of success of a government is to pass more regulation and more legislation. They did that very successfully, and who suffered? Small businesses. There were 519,000 jobs lost. This legislation goes a small but symbolic and important way towards improving that situation.

As previous speakers have said, the personal property security regime came into effect with bipartisan support in 2009. It introduced a national register. The creation of that national system streamlined and provided a framework for the creation, registration, priority and enforcement of security interests. It altered the manner in which businesses were able to borrow and it brought about increased levels of confidence for lenders. It was of course of particular importance to small businesses. In that respect the bipartisanship on this issue was important. We all know from our own electorates that often it is difficult for small businesses to access the credit that they need to grow and expand their businesses. This regime was very important and altered the way in which it did so.

It also reformed the laws. We did away with 23 state, territory and Commonwealth property security registers and the associated 70 pieces of supporting legislation. Given that those changes were made some six years ago, I think it is now important that we address some of the issues associated with it. So what does this bill seek to achieve? As I said earlier, it seeks to streamline a range of current definitions in the PPSA. Previous speakers have spoken about each of those and I will briefly touch on them.

As the member for Longman pointed out, in the higher end rental industry—an industry which employs over 18,000 people and has a turnover, to put it into some context, of over $6.6 billion—the changes included in this bill will drastically reduce the number of registrations that will need to be made. The member for Longman quite thoroughly went through what these changes would be based on experiences with a business in his electorate. We estimate that will save those businesses around $11 million a year. Some might think that is a trifling amount, but all of these small changes and incremental amendments to decrease regulation ultimately have a very significant impact, particularly on small business. We are doing this through simplifying the rules on when a lease will be deemed to be a security interest for the purposes of the PPS Act and, as other members have said, clarifying the definition of a motor vehicle.

There is one additional change that I think is quite important and has not been spoken about at length. Whilst it is not contained in this bill, it is complementary. That is the fact that the Attorney-General has separately announced that we will shortly proceed with a statutory review of the PPS Act to consider whether the act creates an effective consolidation of the system governing personal property securities ownership in Australia. That is so important because it is not good enough to introduce wide-ranging and sweeping legislation such as the PPS Act and have a set-and-forget approach. We have to be ruthlessly constantly reviewing these rules and regulations and legislation to ensure that the circumstances described and which this bill is trying to amend do not drag on for too long.

The fact that this regime commenced back in 2009 and now some six years later we are making minor amendments to issues that presumably the higher end of the industry have had to deal with this whole time is too long. When members opposite talk about the ordinary course of business of government, I ask, 'Why did you allow that to transpire for some 4½ years? Why wasn't it fixed earlier?' It took a coalition government to consult with and listen to small businesses and make the change.

I welcome the review by the Attorney-General because government should impose discipline on itself that when it makes wide-ranging reforms there is a constant eye to unintended consequences or effects from those changes that negatively impact on any stakeholders so that it can swiftly amend them. That is what this government will do. In a commercial world—from my former life practising as a lawyer, I know that the PPS Act contains lots of complexity—definitions and circumstances are changing all the time. So I think it is very timely that the review happens now.

The establishment of a single national framework when it came to personal property securities was undoubtedly a good thing. Credit goes to the former government, with our bipartisan support, on that. It means that our small businesses just deal with one legal framework rather than the myriad state and territory based systems that previously existed. This government believe above all else that, regardless of whether a regulatory system is national or not, it must always be updated to ensure that the burden it places on businesses is as minimal as possible. Members opposite can say that that is the ordinary work of government; I would say that is the ordinary work of coalition governments. That is the ordinary work that we do. The fact that we have, through our two red tape repeal days, repealed over $2 billion of regulatory complexity indicates that, yes, it is the ordinary work that coalition governments do, but I would disagree that it is the ordinary work that Labor governments do. I enthusiastically commend this bill to the House.

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

David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

The Personal Property Securities Amendment (Deregulatory Measures) Bill is a very straightforward matter for this House to consider. As you know, we in the coalition support simplifying business. We are trying to cut out unnecessary red tape, removing duplication, costs and ambiguities for business. The Personal Property Securities Act of 2009 did bring a lot of different state-based registration systems into one house, and it was passed with bipartisan support. But there was some residual confusion with this act, and this amendment tries to address that problem. The 'leases of 90 days or more and less than 12 months' requirement meant that many leases had to be registered, which added to the costs and the complications for the leasing company and the person taking the lease. These amendments change the deeming provisions so that where the lease is for more than 12 months, or for an indefinite term, it is a registered security; but for leases of less than that it will not be required. Multiple pieces of paperwork will become unnecessary and multiple lease-registration costs will not be incurred. The Personal Property Security Register remains unchanged.

As you know we have had three red-tape repeal days. This is one of those red-tape repeals. It is a clarification and a simplification. To put a monetary value on it, there is a value of $11.2 million to the benefit of customers leasing goods on a short-term basis and/or the businesses conducting leasing activities. It also simplifies matters in the case of insolvency and for financial institutions. The principle of keeping it simple is applied here. The red-tape repeal target we set ourselves was to repeal at least $1 billion worth of red-tape costs from the economy, and with three red-tape repeal days we have achieved that and more. Over $2 billion worth of red tape, strangling and stultifying small and big business, has been removed from businesses across Australia. Not only have we done that; we have been doing a lot to help small business. You only have to see what we brought out in our last budget. There were the tax cuts to small business—1½ per cent is a brilliant initiative for small business. The one-off five per cent reduction for unincorporated businesses is another great relief for people running small businesses that are unincorporated, whether they are the local hairdresser, the local florist shop or a tradesman. A one-off five per cent cut in their tax of up to $1,000 is a great initiative and will be really appreciated by small businesses in the Lyne electorate.

We are all about keeping costs down for business and for customers. This is common-sense legislation. I commend it to the House. Not only do we have this sort of legislation, but we have small businesses represented in cabinet by a very able Minister for Small Business. We will continue to fight for small businesses around the country—and big business—because it is the economy that drives the wealth of employees and companies, and it is what keeps Australia vibrant and strong. The best help we can give Australian citizens is to have a strong economy so that people can get jobs, get ahead and have a go. This legislation marries nicely into our latest budget, which is great for families and great for small businesses. I commend this bill to the House.

Bruce Billson (Dunkley, Liberal Party, Minister for Small Business) Share this | Link to this | Hansard source

There have been some interesting contributions and great recognition of the ongoing work of the coalition in the area of deregulation. The Personal Property Securities Amendment (Deregulatory Measures) Bill 2014 will simplify the operation of the Personal Property Securities Act and minimise costs and confusion for business, particularly for small businesses in the equipment-hire industry. These reforms have come about through meaningful and effective consultation with the hire industry and that is why I am so pleased to be supporting these matters with other colleagues in this House.

I should add, before commending the bill to the House, that mention was made of the statutory review of the act—a timely review. That timely review has recently been completed, led by Bruce Whittaker. Some good work has been done there, and the government is considering that review because—for small businesses in particular who have been listening to this discussion—the questions that arise around the equipment-hire industry are very important and action is being taken.

But there are other examples of the level of awareness and understanding of the way in which the Personal Property Securities Register system acts. What kind of assets need to be registered? What is involved in deregistering them when that is appropriate? And where there is a need to vary those registrations—for instance, if it is scaffolding for a building and you have made registered 150 metres of scaffolding materials only to find you need 160 metres—those variations can be quite complex. Those are some of the reasons why that important statutory review will be something the government considers carefully. In summing up, I commend the bill to the House and thank my colleagues for their contribution to the debate.

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

The question is that the bill be read a second time.

Question agreed to.

Bill read a second time.