Mr McCLELLAND (Attorney-General) (11:29 AM) —I thank both of the previous speakers for their contribution to this debate on the Personal Property Securities (Corporations and Other Amendments) Bill 2010, in particular the member for Blair, who has just completed his speech. I would like to thank members for their contribution to the debate more generally. Before I turn to some of the specific aspects of the bill, I reiterate the comments that have previously been made that this is a significant reform of Australia’s personal property security regime and will create significant efficiencies, leading to businesses being more likely to lend funds on the basis of identified securities and ultimately making it cheaper for those financial institutions that lend funds to do so more cheaply as a result of a reduction in costs of compliance.

The core elements of the bill are amendments to the Corporations Act 2001 to ensure its consistency with the functional approach of the Personal Property Securities Act, or the PPS Act—an easy acronym. Under this approach to security interests, transactions which have the same effect are treated alike. The bill has received significant support and input from stakeholders, including businesses, consumer advocates, representatives from state and territory governments, lawyers and financiers. I am grateful to all of these people for their comments and feedback and, of course, to officers of the Attorney-General’s Department who, for a long period of time, have been doing some tremendously dedicated work on this bill and the overall structure of the personal property securities scheme.

The amendments to the Corporations Act in schedule 1 will make amendments to the Corporations Act concept of property to apply the functional approach to security interests, particularly in relation to property in which the grantor does not have title. It will repeal chapter 2K, which establishes the ASIC Register of Company Charges, as this will be replaced by the Personal Property Securities Register. It will maintain existing rights, including employee entitlements in insolvency, and apply appropriate transitional and application provisions. The Ministerial Council for Corporations approved the amendments following a six-week consultation period which ended in January of this year. The amendments to the PPS Act in schedule 2 will simplify the transitional provisions, ensure consistency with existing state and territory provisions on the enforcement of security interests in crops and livestock and reflect the terminology used in the international financial industry in relation to intermediated securities. The Standing Committee of Attorneys-General has approved these amendments in accordance with the intergovernmental agreement that supports the PPS reform. Schedule 3 makes minor consequential amendments to other Commonwealth legislation.

The bill was referred to the Senate Legal and Constitutional Affairs Legislation Committee for inquiry. Submissions to the committee raised some possible amendments which would clarify the operation of the bill. To avoid any delays, we are proposing to give appropriate consideration to the issues raised in the Senate committee inquiry and, if necessary, to enact a further amendment bill which will be introduced later in the year.

In conclusion, as I have said before, the PPS Act will replace the existing complex regulatory arrangements, based on artificial distinctions between personal property security transactions, with one national functional approach to personal property securities. PPS reform is a key aspect of the government’s continued commitment to cooperation with the states and territories on the government’s deregulation agenda and the national agreement to deliver a seamless economy. I acknowledge the contribution of the Standing Committee of Attorneys-General in progressing the PPS reform and this particular bill.

As this reform is based on a referral of power from the states to the Commonwealth, I also acknowledge the prompt and cooperative manner in which the states have assisted in this reform. New South Wales, Victoria, Queensland and South Australia have passed referral legislation and Tasmania and Western Australia will be passing their referral legislation in due course. The states and territories will also be making consequential amendments to their legislation dealing with personal property security interests. In closing, PPS reform is essential to making secured financing more accessible and efficient by lowering risk for lenders, by increasing competition between finance providers, by providing greater certainty for both lenders and borrowers and by lowering costs for borrowers. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Ordered that the bill be reported to the House without amendment.