STATUTES AMENDMENT (PERSONAL PROPERTY SECURITIES) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 10 March 2011.)

The Hon. S.G. WADE (16:59): This bill follows the passing of the Personal Property Securities (Commonwealth Powers) Bill in 2009. During that debate, there was substantial debate around this legislation. I do not propose to detain the council long in reiterating that because it was dealt with at that time. In effect, this bill is an enabling bill for the elements of the national harmonisation that was agreed to by this parliament at that time.

In 2008, COAG adopted the national partnership agreement to deliver a seamless national economy. That was particularly a project of the Howard Liberal government. The Standing Committee of Attorneys-General considered matters in relation to personal property securities in August 2009. The changes, as adopted around Australia, will replace 40 separate registries in the states and territories and consolidate them into a single registry. The single online registry will have benefits to both business and consumers and should make information more accessible to them. We are advised that South Australia has 127,000 entries on its registers, and that there are likely to be more than three million Australia-wide.

It remains to be seen how quickly this register will become available to the public. The advice to the opposition from the Attorney-General's office is that South Australian government departments will be ready from May 2011; however, it was also noted that the migration of data is taking longer than expected. Stakeholders are also still preparing for the merging of data and have requested additional time. The estimated commencement date of the register is stated to be October 2011. The Goods Securities Act 1986 will expire in three years' time, rather than immediately at the introduction of the new register, as we understand it, to allow for any compensation or settlements that need to be made under the previous act.

Yet again, the South Australian government seems to be taking the support of the community for granted, however. The only entities that were consulted by this government were government departments—another case of government seeing consultation as talking to itself. Other stakeholders were not approached. For our part, the opposition consulted with the Australian Bankers' Association, the Australian Finance Association, the Co-operative Federation of South Australia, Elders stock agents, Landmark stock agents and the Motor Trade Association. These were the stakeholders that we thought might be affected most by these changes. The opposition was not advised of any concerns through these consultations.

These organisations deserved to be consulted, nonetheless, by the government. The transition to a so-called 'seamless economy' is, after all, primarily to benefit consumers and the private sector, not government departments. However, yet again, the private sector was completely overlooked. Perhaps this is a better indication of this government's views about the nature of national legislation that, from the Labor tradition, this government enjoys centralising bureaucracy rather much more than it does in enabling Australian businesses to conduct their businesses more efficiently.

State government departments, we are advised, will notify businesses and consumers of the change in the registry arrangements as the commonwealth is under no obligation to do so, and the opposition will be watching the government's management of that communication process. With those few words, I indicate the opposition will be supporting the passage of this bill.

The Hon. D.G.E. HOOD (17:03): I rise to indicate Family First's support for the second reading of this bill that will set up a personal property security scheme held in place with one set of national laws and one nationally accessible register. As I have stated on numerous occasions, Family First is a party that believes in less red tape and less waste. This proposal will certainly reduce those things and this scheme therefore has our support.

For the benefit of some members, personal property is generally property that is not real property; that is, it is not land, water, buildings or fixtures to land. It is primarily all tangible property like personal possessions, cars, boats, crops and the like. It also includes intangible property like shares, intellectual property and other property in a broader sense.

However, this bill will not deal with all personal property. We are told that petroleum, mining, fishing and aquaculture licences will be excluded from the scheme. Nevertheless, this bill, when fully realised nation-wide, will replace around 70 acts relating to personal property securities with a single national scheme with one central register online. It is certainly one of the most significant changes to business laws affecting these issues in recent times.

I understand from documents regarding this scheme that the national register will 'go live', if you like, in October this year, having been moved back from May this year. Around 40 separate electronic and hard copy registers around the country will be abolished and replaced by this new online system that will operate 24 hours a day, seven days a week—a substantial improvement. In our state, data contained on the registers under the Goods Securities Act 1986, the Bills of Sale Act 1886, the Cooperatives Act 1997, the Liens on Fruit Act 1923 and the Stock Mortgages and Wool Liens Act 1924 will be migrated.

The concept of having property in a thing is actually a fairly ambiguous concept, but I have heard it described as being a bundle of rights that a person holds over something. That is, the right to use, sell, transfer and benefit from the ownership of particular property. John Locke once wrote that, 'The reason why men enter into society is the preservation of their property.' Perhaps this is a fairly cynical view of property rights, but Locke is certainly correct that the preservation of property and the proper recognition of the rights associated with property is important and fundamental in our society. Another view comes from Frederic Bastiat, a French political economist of the 19^th century, who wrote:

Life, liberty and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty and property existed beforehand that caused men to make laws in the first place.

Certainly this bill which seeks to better protect property seems to back up this argument. My understanding is that the impetus behind this particular initiative dates back some 20 years to a 1990 Australian Law Reform Commission inquiry, which resulted in a report published in May 1993 as the 64^th report of the commission. The report noted that the method of dealing with personal property securities was both complex and inefficient. I quote from the findings of the report after an examination of the applicable laws:

A complicated and often overlapping range of laws applied depending on the nature of the security, the type of property the security was taken out over and the class of the debtor. These laws were a mixture of common law and statute law and of federal, state and territory law. They differed widely between jurisdictions. This haphazard method of dealing with personal property securities meant that there was no one simple method of determining whether a particular person had a security interest in certain property. Where two or more people had interests in the one property, there was no clear way of determining which person had priority.

The existing system was inefficient for both borrowers and lenders. Because there were a variety of registers used for different types of property, it was often difficult for those considering a transaction involving that property to determine whether a security interest was attached to it. In addition, the priority rules were unnecessarily complicated and lacked clear standards for businesses to adhere to.

Clearly the system requires improvement in light of that quote and others we could bring to the chamber. My only question is why it has taken more than 20 years from the inquiry until now before we have seen this bill. That is not necessarily a slight on the government; I understand that this is a process that has been in train for some time, but it does seem that it has taken a long time indeed. Certainly this is a very promising bill. We wholeheartedly support the second reading and look forward to the committee stage of the bill.

Debate adjourned on motion of Hon. I.K. Hunter.