House of Representatives

Second Reading Speech

Mr McClelland (Attorney-General)

I move:

That this bill be now read a second time.

Introduction

The Personal Property Securities (Consequential Amendments) Bill 2009 represents the next stage in the government's harmonisation of Australia's personal property securities laws.

Currently there are over 70 Commonwealth, state and territory laws, as well as common law and rules of equity governing security interests in personal property.

These different laws vary in their application according to the form of the transaction, the nature of the debtor or the jurisdiction in which the property is located. This adds significantly to transaction costs.

Personal property securities reform is an important part of COAG's deregulation agenda.

By harmonising the current laws and creating a single national online register, the reform will have a real impact for business and consumers. Transaction costs will be reduced and businesses will be able to use more types of personal property to secure lending, resulting in them being able to secure lower interest rates.

This bill will amend 25 Commonwealth acts that deal with the creation, registration, priority, extinguishment or enforcement of interests in personal property.

The amendments are necessary to facilitate the establishment of a single national legal regime for security interests in personal property. The amendments will clarify the operation of legislation that will operate concurrently with the Personal Property Securities Bill once enacted.

This bill also makes minor amendments to the Personal Property Securities Bill 2009, which was passed by the House on 16 September.

Amendments to other legislation

The Personal Property Securities (Consequential Amendments) Bill contains measures designed to harmonise language and concepts with the Personal Property Securities Bill.

The amendments will reduce complexity and increase consistency in the arrangements for creating, dealing with and enforcing security interests in personal property.

Importantly, the amendments will support a seamless transition to a single national Personal Property Securities Register by amending provisions in Commonwealth legislation that provide for the registration of security interests on a separate Commonwealth register.

For example, the Shipping Registration Act 1981 will be amended to change the current regime for creating and registering mortgages over ships. It will bring such transactions solely within the ambit of the Personal Property Securities Bill.

Existing mortgages over ships currently registered on the Australia Register of Ships will be migrated to the Personal Property Securities Register.

The result will be that the Personal Property Securities Register will be the sole register for the registration of mortgages and other security interests in ships.

Amendments will also be made to the Designs Act 2003, the Trade Marks Act 1995 and the Patents Act 1990.

The registration of security interests on registers created by those acts made after the commencement of the PPS scheme will have no effect on the registered owner of the intellectual property interest.

This will encourage registration of security interests in intellectual property on the Personal Property Securities Register and resolve any conflict between the Personal Property Securities Register and the intellectual property registers.

This bill will also reinforce the privacy protections applied to the PPS Register, as it will be known.

The Privacy Act 1988 will be amended to confirm that unauthorised uses of register data are 'interferences with privacy' under the Privacy Act and subject to the Privacy Commissioner's powers of investigation.

The amendments effected by the bill will resolve possible conflicts between the PPS Bill and Commonwealth legislation that provides for other interests in personal property.

The bill will make it clear that the PPS scheme cannot be used to frustrate other legitimate interests in personal property.

In relation to the Commonwealth's maritime and fisheries legislation, for example, this bill ensures that enforcement action taken under such legislation will not be circumvented by a secured party attempting to enforce a security interest under the Personal Property Securities Bill.

This bill will also ensure that current rights and interests are preserved after the new PPS scheme commences operation.

In particular, where Commonwealth legislation has clearly provided for the priority of an interest in relation to a security interest in the same property, that priority will be preserved upon implementation of the Personal Property Securities Bill. An example is the priority of statutory liens held by Air Services Australia under the Air Services Act 1995.

Some additional amendments to Commonwealth legislation will be needed before the PPS scheme commences.

I foreshadow now, for instance, that the Corporations Act 2001 will need to be amended as part of the new personal property securities reform.

Prior to the introduction of those amendments, the government will conduct a consultation process on the proposed amendments in accordance with the intergovernmental Corporations Agreement. That consultation process will begin shortly.

Amendments to the PPS Bill

On 25 June 2009, the Senate referred the provisions of the Personal Property Securities Bill to the Senate Standing Committee on Legal and Constitutional Affairs for inquiry and report.

I thank the committee for its thoughtful consideration of this complex bill.

The committee released its report in August 2009 and recommended that the government consider the stakeholder concerns raised with the committee and any further concerns brought to the government's attention until 30 September 2009. The government has done precisely that.

Following consideration of the submissions made to the Senate committee and subsequently to my department, a small number of minor amendments to the Personal Property Securities Bill were identified and are included in the bill that I introduce today.

The amendments will, among other things, address stakeholder comments that the operation of some provisions could be clarified and correct drafting errors.

The amendments have been included in this bill because the PPS Bill is supported by a referral of legislative power by the states.

Moving government amendments to the PPS Bill itself would cause some states to have to revisit their referral legislation.

The method adopted here-which provides the parliament with the same opportunity to consider the changes to the bill as government amendments-will allow the states to continue the referral process without interruption.

I am pleased to advise that New South Wales, Queensland, South Australia and Victoria have all passed their referral legislation. I anticipate Western Australia and Tasmania will introduce their referral legislation shortly.

Conclusion

This bill will facilitate the establishment of a single national regime for secured lending over personal property.

By harmonising legislation across the Commonwealth statute book, the bill will provide greater consistency and support a seamless transition to the new national personal property securities regime.

A recent World Economic Forum survey ranked Australia second among global financial centres.

Making Australia's secured transactions law more certain and consistent and less complex and costly will facilitate international investment in Australian businesses.

This will further strengthen Australia's position as a leading global financial centre.

Debate (on motion by Mr Haase ) adjourned.