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Thursday, 13 May 2010
Page: 3629

Mr NEUMANN (11:21 AM) —I speak in support of the Personal Property Securities (Corporations and Other Amendments) Bill 2010. When I was training to be a lawyer at the University of Queensland in the late 1970s and early to mid-eighties I did not quite understand, when doing constitutional law, the travails and troubles that the Federation actually caused us. You read section 51 of the Australian Constitution and recognise that the Commonwealth has jurisdiction in respect of certain aspects. But there are areas in which business goes across jurisdictions.

I remember the first day I started practising as an articled law clerk and someone walked into the office with all their tax returns and a big box of receipts et cetera. I asked where they had business interests and they said, ‘In the Lockyer Valley just outside of Ipswich, and interstate I have got farming interests.’ I asked, ‘What about your securities? Are you secured on any properties, debentures, companies et cetera?’ They wanted me to check all this out. I remember distinctly contacting my then master, as they called it, and finding out that you had to go interstate to check so much with respect to mortgages, liens and debentures. You really realised then—and I realised as a very young lawyer—what stupidity it was in this country to have all these different systems with different charges and different registries, and I recognised there and then what a shocking impediment and obstacle to a seamless national economy it was—though I did not quite use that expression in those days.

When I got into business for myself and built up a law practice which dealt with a lot of commercial clients interstate and overseas, it was an endless frustration to me, particularly in the commercial section. So the creation of this new registry, the idea of personally being able to be searched online and across the country, whether you are living in Queensland or Tasmania, is a great national reform of the reformist Rudd Labor government. I think this is a great initiative.

The amendments here are consequential; they are about making sure there is consistency with the Corporations Law and that definitions of property are the same. This is about making improvements to the system, and of course there are going to be changes—that is what happens when you establish a new registry. I noted what the Attorney-General, who is here in the chamber, said on 26 November 2009 when the personal property securities law was passed. I read what he said at the time because I thought it was very important in that the passage of that bill was a major achievement in reforming Australia’s personal property securities system. I say amen to that; I think it was a major achievement. It is a demonstration once again of the Rudd Labor government’s commitment to small to medium sized businesses. We saw that in the budget with the reduction in corporate tax rates and the write-off of $5,000 upfront for small businesses. There is a myth in this chamber, perpetrated and perpetuated by those opposite, that they alone are the friends of small business. It is simply a nonsense. The legislation here is consequential, but it makes the system work better. It is necessary. The COAG implementation timetable requires the personal property securities reform to be implemented in May 2011.

This legislation before the chamber makes amendments in accordance with schedules, as we often do, to amend the Corporations Law and the primary legislation, the Personal Property Securities Act or PPS Act, and also other Commonwealth legislation. It is minor but it improves the system, amending terminology in the Corporations Law to make it consistent with the PPS Act and amending the Corporations Law in relation to the concept of property. Property has a particular concept in law: it is personalty or realty; it is tangible assets or intangible ones. Things like contractual rights and intellectual property rights are intangible. Tangible assets, as we know, are things like livestock, property, crops, cars et cetera. This legislation makes the definition of property consistent. It repeals chapter 2A, which establishes the ASIC register of company charges. That is being replaced by the PPS register. It maintains the existing rights of secured and unsecured creditors such as employees, debtor companies, owners, lessors, lienees, pledgees, controllers, administrators or liquidators. It is minor, as I said, but it is important.

The Ministerial Council for Corporations have approved the changes and the Standing Committee of Attorneys-General have approved the amendments in accordance with the intergovernmental agreement. It makes a difference, clearly, to make sure this system works better. Small businesses will clearly benefit because they will use the registry on a daily basis. It will improve their capacity to get finance and their security. Nothing causes more disputes between parties than a dispute between a third party and two other people involved in a contract. We see that all the time; that is what causes difficulties. That is why there are complicated provisions in the Corporations Law and the Bankruptcy Act in relation to third parties. If people can get access online to a registry and can check it out to see what the situation is with respect to the security, that will enhance their certainty of transaction. When they go to bargain in relation to a good or service it will improve the situation.

I think this legislation is important. It improves the PPS Act. I am very excited about this legislation because it will make a big difference to business and to the many small businesses and farming communities in my regional and rural seat of Blair. It will help business operators in Ipswich but it will also help in the little communities where there are small businesses who need access to that information. It will help people who live in little country places like Kilcoy, Lowood, Minden, Fernvale, Toogoolawah and Esk, as well as the farmers who support the economies in those areas. I support the legislation and I commend the Attorney-General for the work he has done.