John Williams (NSW, National Party) Share this | Hansard source

I wish to contribute to this debate on the Personal Property Securities Amendment (PPS Leases) Bill 2017 by saying that, in 2015, I had a meeting with James Oxenham from the Hire and Rental Industry Association and their legal representatives Oliver Shtein and John Elmgreen. They explained to me that the hire and rental industry was suffering badly from an unintended consequence in the PPSA and that companies were losing their property when the lessee went broke. This is because they had not properly lodged security over the equipment by not completing the required paperwork and online registration or completing it incorrectly, or not completing it in the correct time frame.

A classic case is a matter of Alleasing Pty Ltd, which lease plant equipment worth $23 million to OneSteel manufacturing. Alleasing registered an interest in the equipment on the register but included OneSteel's ABN, not their ACN. The administrators ruled that this made the registration defective and invalid and, even though Alleasing lodged a fresh registration and then went to court, it lost the case and its $23 million worth of plant and equipment.

Farmers are not immune either—this is a matter happening as I speak. Three farmers leased dairy cattle to a fourth farmer and, unfortunately, his operations failed and the liquidators moved in. Because the farmers either were not aware of the necessity to register under the PPSA or completed the paperwork outside the required time frame, they have been embattled with the bank and the liquidators as they try to get back at least some of their cattle.

It has been a long road to get here. I raised this 18 months ago in the joint party room when these people came to me. The current exemption period is one year, and the industry want that extended to three years. A big part of this was the banks, because they are the ones who appoint receivers. But, even if they do not appoint, any assets lost to the insolvent company under the PPSA usually end up in the hands of the bank.

In the Forge Group liquidation, ANZ successfully claimed turbines owned by another company worth more than $50 million. So I got the two parties together—the hire companies and the banks—and a period of lease, which can be maintained free of PPSA risk regardless of paperwork, was agreed on for the two-year period.

This legislation will amend the act's definition of a PPS lease to ensure that it captures only leases which are long enough to necessitate registration on the PPS Register to meet the act's objectives. Leases with an indefinite term will require registration only once they have exceeded two years, and the length of a fixed-term lease will require registration only if it is for a term of more than two years. This will fix what I call 'legalised theft'. This is a good outcome for the hire and rental industry, which has an annual turnover of $6.6 billion and employs more than 18,000 people. It is a win for common sense.

I would like to thank the Attorney-General, Senator Brandis, for bringing this legislation forward and also his adviser Jules Moxon, who is sitting here in the chamber—good on you, Jules. He worked with the department to develop the changes needed. I think Jules would refer to me as 'Three Horses' because, every time I went over to see him, I was simply: nag, nag, nag. We have got there, and I thank you very much, Jules. I commend the bill.