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Wednesday, 2 November 2011
Page: 12634

Mr NEUMANN (Blair) (16:27): I rise to speak in support of the Personal Property Securities (Registration Commencement) Bill 2011. The federal Attorney-General made it plain that the purpose of this legislation is to ensure that the Personal Property Securities Act does not commence operating before the PPS Register can be made available for public use. He also made the point in his second reading speech that, if he did not determine an earlier time, what he described as the migration time will be 1 January 2012 and the registration commencement time will be 1 February 2012.

This legislation has a long history, and it is important for personal property securities. Land title is held across the states and territories, and it is in their jurisdiction. If someone wants to refinance their mortgage or they want to purchase a property, they contact the land titles office in the state or territory. They can do that online. In Queensland, solicitors usually do that if they are acting in a conveyancing role; indeed it is the solicitors for the mortgagee who do that. Of course, the mortgagor has to pay. For a very long time this country has had a regulatory framework for personal property which is totally unsatisfactory: different registers for different types of debtors; different registers for different types of properties; no registers for some securities; and different consequences for a nonregistration. Because of the eccentricities of Federation and because of the procrastination of previous coalition governments, nothing much was done. This reform had its genesis back in 1990, when we were in power and the then Attorney-General referred the adequacy of the situation to the Australian Law Reform Commission for review. Not much was done in relation to the reform for about 16 years until the Standing Committee of Attorneys-General put out an issues and options paper on it. So for a long time a worthy and important financial reform in this country lay dormant, and that is very sad indeed. This particular legislation deals with personal property. That is commonly known in law as personalty, and it is any form of property other than land or the buildings and fixtures which form part of that land. So it can be intangible things such as shares, intellectual property, contract rights or tangible things such as cars, boats machinery or crops.

The Personal Property Securities Act 2009, a commitment of this federal Labor government and a worthy piece of financial reform in this country, created one national law with one set of rules governing personal property, securities or interest held in property other than land. It simplified about 70 items of state, territory and Commonwealth legislation. It made big changes to the rules of equity and common law which govern securities in terms of personal property. These are very complex areas of law. This is some of the most significant law reform we have seen in this country, and it took a federal Labor government to do it. Virtually nothing was done in this area—in fact, there was not a jot of legislative reform—by those opposite when they were on the Treasury benches. The PPS reform will improve the ability of individuals and businesses, particularly small to medium-sized businesses, to use more of their property in raising capital. It is good for the economy and it is good for those businesses and their profitability.

Development of these types of reforms has been occurring across the world. Canada, New Zealand and the United States have all undertaken this type of thing, but of course this all bypassed the coalition when they were in power—it just seemed to go over their heads. But, after completion of a trial of the system, about 4.6 million records will be migrated onto the new PPS and we will see the Insolvency and Trustee Service Australia assume responsibility for the PPS register and the customer contract centre when it commences in early 2012. The new role will form a very core part of the role of ITSA. It will be an information provider to major creditors, financial institutions and the public.

This bill will help the government in terms of the registration time, and I think it will be important because not just government but also stakeholders, industry, consumer advocates, small businesses and individuals will have access to a register so they can have security. If you are a lender and you have the asset in your possession and you are lending the money, you have security. But, if you are a lender and the assets are in the hands of the person who wants the money, you do not have that kind of security and you cannot check out online whether that person has then decided to falsely, fraudulently or wrongly decide to seek further security. If you are plan to buy a car, you want to know whether there is some form of security over that car when you are going to buy it at a dealer or privately.

So the PPS will make important changes. It will improve the ability to raise capital. It will also mean that a person can have knowledge by checking online. I think there are some overlaps in the current law, and that was my experience when I was in private practice. It depended on the jurisdiction—New South Wales was different from Queensland—and on the type of interest. I certainly saw different types of interest, tangible and intangible. I think that the registration requirement being the same across all jurisdictions will make a difference. I am sure that the jurisdictions in this country have been created differently and that section 51 of the Constitution means that the things the Commonwealth can do in the various jurisdictions are very different; but I applaud the COAG process because we have seen a national system for registration of personal property arise, and I think that is an important reform. The Department of Finance and Deregulation has estimated that 10 of the 27 of this government's seamless national economy business regulation reforms will add about $3.5 billion to the Australian economy with about $1.8 billion flowing to business profitability and advantage. We see business regulation and small business assistance as fundamental core business for this government. We believe it is important to the Australian public. About 4.4 million Australians work in small business. In fact there are more sole traders than trade unionists in this country. We believe ongoing regulatory reform is vital and we have undertaken many steps to reduce red tape.

This particular measure is important. I am pleased to see that a federal Labor government has implemented it. When they were in power the coalition government could not be trusted to tackle this reform. The Leader of the Opposition and the shadow minister for small business sat in the government of Mr Howard and could not see fit to make this reform, but I am pleased that they will support it now in opposition. Consumers need to protect themselves when purchasing goods which could be repossessed, by using a function on the PPS register. The opposition say they are prepared to do in opposition what they would not do in government—that is, get rid of red tape in business. They have had a road to Damascus conversion in relation to this issue, and we are pleased that they will now support small business in a way they would never do when they were in government. The coalition government promised to cut red tape for small business by 50 per cent in its first term of government, and guess what? They left the country with eight different regulatory systems in terms of key business regulation. They have left a legacy of neglect, which we are now fixing up. Their lack of interest is matched by our acute interest in this area. It has taken this government to embark on a bold agenda in competition and consumer reform and in regulatory reform like the PPS to cut the red tape and to make sure that we engage in economically sound measures so that this country's wealth can be spread across the whole economy.

I support this reform. I think it is good for the economy. It will make our economy stronger. It will protect security. It will give greater opportunity and the ability for business to raise capital. It will protect consumers and individuals who might be going to purchase assets and who want to use those assets to raise money, for example, in the creation of jobs in small business. This particular measure is worthy of support and I commend it to the House.