Personal Property Securities (Commonwealth Powers) Bill

utilised without returning to parliament. In response to that, the scope of these references is limited

given that there are exceptions to the broader referral power. They should be included to enable the

national PPS system to be developed in sufficient time to permit industry to prepare for the significant

task of implementing the new scheme. All cooperative schemes involve compromise and cooperation to

deliver benefits to the community. The committee also notes concerns about Henry VIII clauses in the

Commonwealth PPS Bill. The relevant clauses are required to ensure that the Commonwealth Personal

Property Securities Scheme will work efficiently and effectively.

Members expressed concerns about the national PPS providing an opportunity for the federal

government to embark on a revenue-raising operation. The cost of searches will be recovered on a

cost-recovery basis. Given the large economies of scale and the use of latest technologies, this cost is

likely to be significantly lower than the current fees charged.

There were concerns expressed about the cost to Queensland. Members expressed concerns

that charges from the federal government have not been identified. The intergovernmental agreement

on PPS law reform, the PPS Law Agreement, states that the registrar of the new national PPS Register

will maintain cooperative arrangements with the states. These arrangements may include providing

states with free access to the register for purposes including law enforcement. Departmental officers

have been advised by the Commonwealth Attorney-General’s Department that where a state register is

replaced by the PPS Register agencies that currently search that register in undertaking a regulatory

function will do so on a fee-free basis. It would be unusual for state agencies to need to establish a

business-to-government link to access the PPS Register unless the agency expected to be a highvolume

user of the register. Interacting through the website, which would have no IT set-up costs, would

be sufficient.

Concerns about loss of revenue to Queensland were expressed. One member expressed

concern about the loss of income to the Queensland taxpayer. At the 26 March 2008 meeting COAG

agreed to 27 areas of regulatory reform of which 11 fall within the portfolio of Fair Trading. One member

was asking what these were. These were licensing of property agents, consumer policy framework,

product safety, financial services, consumer credit, business name, trade measurement, personal

property securities and wine labelling. Under the national partnership agreement the Commonwealth

will make national partnership payments to the states and territories. Queensland will receive a total of

$112.7 million from the Commonwealth comprising $20.1 million in facilitation payments in 2008-09,

which I assume has already been received, and a maximum of $92.6 million in reward payments in

2011-12 and 2012-13 for fully implementing the reforms.

In relation to what impacts closing the Queensland registers will have on Queensland Public

Service jobs, the Department of Employment, Economic Development and Innovation manages the

three registers that will cease to operate once the national PPS Register commences. I have been

advised through consultation with Smart Service Queensland that 8.7 full-time equivalent employees

will be affected by the transition of Queensland registers to the Commonwealth. A range of

complementary services is also provided by my department. As the commencement of the new scheme

is not scheduled until May 2011, both departments have significant time to plan for redeployment of staff

to other areas within the Public Service. My department, which has only one full-time employee

impacted, has already planned that that staff member can continue with the department providing a

similar service-delivery function.

Concerns were expressed about timing for review of the scheme. The Australian government has

considered options for review of the Commonwealth PPS Bill but considers reviewing the reforms after

only 12 months would not provide useful data about the new PPS system.

In relation to concerns about the intellectual property provisions of the draft bill, the

Commonwealth Attorney-General’s Department advises that further consultations were conducted with

IP stakeholders between the Liberal senators recommencing this course in March 2009 and the PPS Bill

being introduced into June 2009. As to concerns about input from the Attorney-General’s office in

Queensland, we have heard that the previous Attorney-General and the current Attorney-General are

completely aware of the project as it is being progressed by the Standing Committee of Attorneys-

General. Officers from my department are in constant contact with officers from the Department of

Justice and Attorney-General.

There were concerns about privacy issues. One honourable member expressed concerns about

the protection of individual rights and privacy issues with the PPS Register being web based. As has

been noted by the member for Brisbane Central, I assure the honourable member that privacy issues

have been paramount in the development of the national scheme and register. In fact, the PPS Register

will contain very little personal information. The majority of information recorded on the Queensland

registers are recorded on the Register of Encumbered Vehicles, commonly known as REVS. This

means that for the majority of recorded security interests the only details recorded will be the vehicle or

hull identification number and whether a security interest exists over that property. No other details will

be recorded let alone available. There will be no details on the size of the loan nor of the payment

history on the loan.

In relation to consumer transactions, the Commonwealth PPS Bill stipulates that the grantor’s

name and date of birth would be the only grantor details that can be recorded on the PPS Register. No

address details will be recorded. Further, anyone searching the register would have to already have

those details in order to be able to search the register. The grantor would have to have given their date

of birth details to the person undertaking the search. The PPS Register will monitor and investigate

suspicious register activity and the federal Privacy Commissioner will have jurisdiction over any

unauthorised use. A civil penalties regime will also apply.

A member suggested that, for privacy reasons, there be a legislative principle that personal

information be retained for the minimum time. The Australian government has agreed it will include as a

principle that personal information be held for the minimum time possible once a registration is no longer

active. I agree that the PPS Bill should preclude the use of personal information for prescreening and

direct marketing. The Commonwealth Attorney-General’s Department advises that the PPS does not

allow such use.

In relation to a member’s suggestion that an increase in scope of the PPS Register should require

legislative authority or a privacy impact assessment, I am advised that any increase in the scope of the

register will need to be authorised by PPS regulations. Development of the regulations must include

preparation of a privacy impact statement.

In relation to concerns from Clayton Utz and the Australian Finance Conference about unintended

consequences, a member noted that there may be unintended consequences if definition of investment

entitlement is linked to the Corporations Act definition. The Commonwealth Attorney-General’s

Department advises that any undesirable, unintended consequences could be addressed through

regulations made under clauses 8(1) (i), 8(3) and 12(5) (b) of the PPS Bill.

The Australian Financial Market Association suggested clarifying ambiguity about knowledge of

interest in investment entitlements. The Australian Finance Conference submission to the committee

suggested that the requirement to be registered be within 10 days of the finance being provided, not

within 10 days of the grantor taking possession. The Commonwealth Attorney-General’s Department

advised that a transaction that includes a flawed asset that in substance secures payment or

performance of an obligation would be a security interest under the bill. The Commonwealth Attorney-

General’s Department is not aware of any policy justification for excluding from security interests a

flawed asset that meets this criteria. It notes that the approach taken in relation to flawed assets by

clause 12(2) is consistent with other international jurisdiction legislation.

In conclusion, the PPS referral bill is the result of significant work undertaken by Queensland and

the other states. This effort has been achieved through consultation and cooperation between the

jurisdictions. The benefits of reforming PPS law will be experienced by a large number of

Queenslanders, as many of us are affected by the laws of person property securities. This may be as a

purchaser of goods that are the subject of an encumbrance as a business or a consumer borrower, as in

investor who is considering buying into a business, or as a financier of a business or consumer

purchase where goods are used as security for a loan.

The objective of this bill is to refer power to the Commonwealth to set in place the legal framework

for national reform of personal property securities law. This will serve to remove uncertainty surrounding

this area of law, open up greater opportunities for business to obtain finance, deliver lower costs for

financing, provide greater assurance for consumers and provide a single national register for the

recording of security interests of personal property. The referral bill will lead to a reduction in the

complexity of the current system and deliver lower costs for business and consumers. The successful

outcomes delivered by PPS law reform will assist with business growth and have flow-on positive

impacts for Queensland growth and productivity. I would like to thank all honourable members for their

support for the bill.

Question put—That the bill be now read a second time.

Motion agreed to.

Bill read a second time.

clause 4. My question is to the minister. Being a renowned Gold Coast solicitor, he is far more attuned to

these matters than a humble layman like me. The important principle I am trying to make sure is

protected here is clause 4(2) (c) (i), which states—

the forfeiture of property or interests in property (or the disposal of forfeited property or interests) in connection with the

enforcement of the general law or any law of the State;

I raise a scenario that may well occur with the Commonwealth register. Let us say that a very

valuable cotton crop in Queensland has a lien registered with the Commonwealth and, at some stage

down the track, unfortunately, a few little hemp products or drug products are grown under the cotton

crop. The state then comes in and grabs that property, as it would probably be forfeited to the state

government in terms of our right and proper seizure acts. But the person who has the lien over the

cotton crop, which would have been done through the Commonwealth register, would then have, as I

see it, an action against the Commonwealth for advising him on his property.

What I am trying to ask the minister is: are we protected from the Commonwealth, because the

Commonwealth has the power, as I understand it, to oversee states’ rights—and what this bill is trying to

do at all stages is protect states’ rights? Does the Commonwealth have the power to come over the top

of the state on this matter to protect its own rights and stop that property being seized because it

obviously granted the guy the lien in the first instance?

from being seized. The PPS scheme will not prevent the continued operation of Queensland laws, such

as the Criminal Proceeds Confiscation Act and the Police Powers and Responsibilities Act. These laws

enable the state to confiscate property obtained through the proceeds of crime and vehicles used for

hooning and so on. So the mere fact that there is a lien over that crop or a charge over a vehicle will not

prevent the Queensland laws from prevailing in those instances.

The referral bill does not refer power to the Commonwealth to limit or modify the power of the

state to make laws with respect to confiscation and enforcement action over personal property. The

Commonwealth PPS Bill expressly intends for these state laws to operate concurrently with the PPS Bill

and also allows for a state law that extinguishes or modifies interest in personal property to prevail in

qualified circumstances.

Clause 4, as read, agreed to.

Clause 5, as read, agreed to.

Clause 6—

relation to clause 6(1). There are two issues here particularly in relation to the delegation of power. At

point 13 under ‘Delegation of administrative power’, the Scrutiny of Legislation Committee says—

Clause 6(1) would refer legislative power to the Commonwealth Parliament to enact national legislation, the Personal Property

Securities Bill 2009 (Cth). That bill contains two provisions (clauses 147 and 197) which would confer on the Registrar of the

Personal Property Securities Register a wide discretion to delegate ‘all or any of his or her functions or powers’ to any public

servant or another person determined by the Registrar. Accordingly, the delegation could be to any public servant or nonpublic

servant.

In which cases does the minister see that delegation going to a non-public servant, which raises

many propriety issues?

contracted by the Commonwealth organisation to carry out the functions of the register—in other words,

to keep it up to date and so on. Also, there are issues associated with call centres. In those cases, those

functions could be delegated to someone other than a public servant.

operators in relation to the register? How do you transfer all of those powers that government has to a

private operator?

There are committees, as there are here, that would supervise the transfer of any responsibility from

any government department to any contractor to ensure that there are strict security measures in place.

Mr STEVENS: One other issue that the Scrutiny of Legislation Committee: Legislation Alert

raised was in relation to clause 6(1). It stated that the bill would refer legislative powers to the

Commonwealth parliament for the enactment of the Personal Property Securities Bill. But the bill

contains a provision clause where it would shift the onus of proof, and it is more that proof would be to

the criminal standard of proof, unless the contrary was shown beyond reasonable doubt. Why is there a

different level of onus of proof in relation to this matter?

where, for instance, two people who live in a house and were aware of the encumbrance on a motor car

transfer the vehicle from one person to another. The onus of proof is then, as I understand it, reversed

and it is a lower standard. The onus of proof reverts to the person who has received the property. So, if

it is a car, for example, it is up to them to prove that they were unaware of the encumbrance. It is

essentially designed to prevent fraud.

Mr STEVENS: Thank you, Minister.