Philip Ruddock (Berowra, Liberal Party) Share this | Hansard source

I welcome this opportunity to speak on the Personal Property Securities Bill 2009, which deals with the implementation of the personal property regime. First, can I thank the Attorney for acknowledging that I did take an interest in this reform and ensure that it was given the priority it deserved. I will take a moment or two just to elaborate on that first.

This is a very significant reform. But it should be seen as only one of many that are absolutely necessary in our federation if we are to ensure that businesses are able to operate efficiently and effectively and in the national interest, generating profits and not having to meet unnecessary costs and charges in order to be able to operate. This exemplifies one of many areas which all ministers ought to be aware of in their portfolios where our federation can produce difficulties for business operations and impose additional costs.

It is very interesting that, when you look at Australia as against the United States of America, which has something like 50 states, when we have six states and two territories, that sometimes you can see measures implemented that can wreak considerable harm upon an economy as you race to the lowest common denominator, to the least regulated environment, in some jurisdictions. In the state of Delaware in the United States, corporations legislation is minimalist in terms of its impact on those who want to establish their presence there, and it means that there is often a desire to register there for less scrutiny. If you look at some of the present financial crisis that we face, a lot of it was generated in the United States, where financial regulation in some jurisdictions was less robust than it ought to have been, as people went for the lowest common denominator.

Harmonised laws are essential in the national interest, and I think they are in the national interest in relation to personal property security. I welcome the government’s continuation of the measures that I initiated to bring this fruition. I notice that the Attorney wanted to share some of the credit with Labor predecessors. I do not deny that they may have undertaken certain roles. In 1990 Michael Duffy referred a review of the adequacy of personal property security reform to the Australian Law Reform Commission. I must say that I was not aware that he had, but no doubt he did. I am not aware of the outcome and I am not aware of anybody implementing an outcome arising from that review. I am told that in 1995 Michael Lavarch released a discussion paper. That may have happened in 1995, but I am not aware of anything that actually flowed from it. I have a great deal of regard for Michael Lavarch but I do not remember it being taken up as a major initiative of the then government.

What I can say is that this issue became an issue largely by accident. I was attending a regional bar association and law society conference on the Sunshine Coast at Coolum. My wife said to me: ‘Look, there is this session on personal property security. If you can’t see anything else in the program that you want to do, you might as well go along.’ I went along and I heard a presentation from the late Professor David Allan from Bond University on measures that had been taken in some states of the United States and Canada to simplify personal property securities and, equally, the measures to codify arrangements that had been put in place by New Zealand. I heard from a very distinguished legal practitioner at that time about the very considerable business that he as a legal practitioner had in advising on variations in personal property security in different jurisdictions. The point that he was making was that if you are a legal practitioner you can spend a lot of time and you can generate very considerable costs, which clients have to pay, offering advice on differences that are in fact totally unnecessary.

I have also spent a bit of time with people in business, people who you might think would not be interested in these matters. I went to a function organised by the Australian Hotels Association. I met with an officer of the Hotels Association who had a hotel in Geelong and a hotel in South Australia, in Mount Gambier. He was telling me about the problems that he and his business experienced operating in two jurisdictions in terms of getting floating charges over his stock in trade and the costs that he incurred in getting advice on those matters. It reinforced my view that this was an absolutely essential reform. We did take it to SCAG and we got the states to agree there. We did take it to COAG and, I might say, it was not an easy path to get the department of finance and the Treasury to agree to meet some of the costs of getting the states up to the barrier in relation to this. I might also say that if you did not drive it, it was not going to happen.

I was interested in some of the statistics in the second reading speech of the Attorney, because they were statistics that were shared with me. There were some 70 Commonwealth, state and territory acts referred to in paragraph 7, I think, of the Attorney’s speech. I was once chastised for saying that; chastised for saying there were 70 different acts and implying that there were 70 differences. One of my advisers said, ‘But, look, there are only 40 substantial differences incorporated in those 70 pieces of legislation.’ While it certainly ensured that I was accurate in the way in which I was describing these matters, it brought home the enormity of those differences. And as a legal practitioner who learnt about the different forms of personal property security which you may have to give, from floating charges, to bills of sale, to hire purchase and maritime loans—you can go through the full range of them—all with, in some places, different provisions, you can see the enormity of the challenge.

I do not want to give any particular advice in relation to the process forward, save to say that I welcome the reference by the Attorney-General to the fact that this bill, having been reviewed to simplify its language and structure, is consistent with comparable legislation in Canada, New Zealand and the United States, while taking into account the unique circumstances surrounding Australian law. I simply want to make this point: I always saw this measure as one that uniquely, given our relationship with New Zealand, could, the closer we linked our legislation to the New Zealand scheme—and I recognise that it may not be possible to do it in every respect—better ensure that the closer economic relations between Australia and New Zealand were going to be seen as a cooperative arrangement, rather than New Zealand always having to come on board in relation to what our arrangements might be.

They embarked upon personal property security reform and rationalisation well in advance of us. I hope the officers who are listening will have regard to the importance of ensuring that this is a scheme that will not jeopardise closer economic relations, notwithstanding the unique circumstances surrounding Australian consumer law, although I am not sure that is always as unique as we like to think. I hope that those matters can be taken into account.

When I sit down and write about the four years that I was the Attorney-General of this country, the major agenda item for me was harmonisation of laws. I had responsibility for national security and, certainly, maintaining Australia as safe and secure in a very difficult world environment was something to which I attached a great deal of importance, but one should never forget that there are other areas of important reform that need to be pursued in the national interest, and you cannot put them to one side because there are other difficult issues that you might have to deal with.

I will be gratified when this measure comes to finality, but I hope the engagement which I had with the late Professor David Allan from Bond University, who brought this matter into very clear focus, will not be forgotten. I took the opportunity of sharing on some of the occasions when we talked these issues through of bringing his widow to witness the progress that was being made in implementing these changes. I think she was very gratified for the acknowledgement that was given to his leadership. In public life it is very important to share the credit where it is due and to recognise the importance that people along the way have played in developing your ideas and helping you identify the changes that are needed.

I do thank the Attorney-General for his acknowledgement that I was interested in this reform and that I ensured that it was given priority. I thank him for continuing to ensure that, those steps having been taken, the matter is being brought to fruition. It is a very important reform; it is in the national interest, it will generate savings for people who are running small businesses, it will help to make us more internationally competitive and it should serve to make sure that anyone who serves in the role of Attorney identifies further areas in which harmonisation is possible, because you can do a good deal for Australia if you do.

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