Public consultation on the Government's response to the statutory review of the Personal Property Securities Act 2009

Defer proceeding with the draft Bill;
Instead, as a next step, the Attorney General’s Department should revalidate the relevance of the Whittaker review’s 345 recommendations proposed for adoption;
Where the recommendations are found to be still relevant, a cost benefit analysis should be undertaken

Defer proceeding with the draft Bill;
Instead, as a next step, the Attorney General’s Department should revalidate the relevance of the Whittaker review’s 345 recommendations proposed for adoption;
Where the recommendations are found to be still relevant, a cost benefit analysis should be undertaken.

As a starting point, Equifax wants a cost benefit analysis of each recommendation. The reforms will be disruptive to established processes and practices

See submission

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RECOMMENDATIONS
Defer proceeding with the draft Bill;
1. Instead, as a next step, the Attorney General’s Department should revalidate the relevance of the Whittaker review’s 345 recommendations proposed for adoption;
2. Where the recommendations are found to be still relevant, a cost benefit analysis should be undertaken.

EQUIFAX AND THE PERSONAL PROPERTY SECURITY REGISTER
Equifax is a data, analytics and technology company, best known for consumer credit reporting and as a leading provider of risk and due diligence solutions. We have extensive experience in the management and operation of very large transactional databases and considerable expertise in data architecture and search functionality. Our services help businesses to quickly and efficiently protect their interests and to perform due diligence as part of credit risk assessment.

Typically, PPSR activity is embedded in broader risk mitigation activities, such as assessing critical background information on directors, the company’s status on the ASIC Company Register and whether there are any adverse commercial credit bureau indicators.

Today our services and solutions are used by more than three thousand credit providers and finance companies with registrable interests, including most of the ASX 50.
- Equifax is one of the largest private searchers of the Register, enabling around a quarter of the annual PPSR search volume;
- Similarly, in the last 12 months, around a quarter of all new registrations on the PPSR were generated through Equifax;
- Equifax has also been a long term participant in the PPSR Users Forum.

STATUTORY REVIEW OF THE PERSONAL PROPERTY SECURITIES ACT 2009
(Whittaker Review)
Equifax (then Veda) was heavily engaged in the lead up to the start of the new PPSR in January 2012, both educating customers about the importance of the Register, and as one of the private sector partners participating in the pre-launch test environment.

Based on our experience as industry behaviour adjusted to the new Register, we made a submission to the 2014 Statutory review of the Personal Property Securities Act 2009. This had four key recommendations:
1 Allowing greater private data analytics of PPSR information
2 Enhance requirements for PPSR awareness by Certified Practising Accountants
3 Inclusion of yellow goods within the PPSR register suggesting the inclusion of a sprayed on micro-serial number together with the chassis and engine number
4 A series of enhancement, including consolidation of minor registries
The intervening decade has seen Australian business growing familiarity with the PPSR reflected in now well-established practices and processes. The issues of 2013/14 that triggered recommendations in the final Whittaker report may now be both less relevant and less problematic than was apparent ten years ago.

On 12 July 2023, the Parliamentary Joint Committee on Corporations and Financial Services inquiry into corporate insolvency in Australia issued a report recommending that the government provide a formal response to the Whittaker Review.

The response two months later came in the form of a 170 page draft Bill (the Personal Property Securities Amendment (Framework Reform) Bill 2023).

Equifax is a member of the Australian Institute of Credit Management (AICM) and shares the view of the AICM expressed in its November 2023 submission to the PJCCFS, that only modest changes were needed to improve the efficiency of the Register. Further, the cost and time to implement more wholesale changes need to be weighed against the possible benefits.

As a next step, the Attorney General’s Department should revalidate, via industry consultation, the 345 recommendations that formed the basis for the draft Bill. From there, the proposed changes to the PPSR should be evaluated in terms of the extent of the benefit they could bring, versus the disruption implementation they would cause.

APPENDIX
As a member of the AICM Equifax shares its opposition to the following recommendations. We are particularly concerned that:
- Sole traders and individuals be identified using their full name and date of birth
- The current definition of motor vehicle may be changed

RECOMMENDATION
DETAIL
POSITION
REASON

20.
That the definition of PPS lease in s 13 be amended to remove all references to “bailments”.
Oppose
Potential Manipulation
86.
That the Act be amended so that:
• a registration does not need to indicate whether the collateral is consumer property or commercial property;
• all registrations against individuals, or against serial-numbered property that may not identify the grantor because the grantor is an individual, must have a maximum term of 7 years; and
• a registration that is made against only serial-numbered property and that identifies the serial number may not identify the grantor, if the grantor is an individual.
Oppose
Lack of clarity and impacts sole traders negatively
87.
That the definitions of “consumer property” and “commercial property”in s 10 of the Act be deleted.
Oppose
Adds complexity
88.
That item 1 of the table in clause 4.1 of Schedule 1 to the Regulations be deleted.
Oppose
Costs don't outweigh benefits
90.
That item 6 of the table in s 153(1) be deleted.
Oppose
Costs don't outweigh benefits
92.
That item 4(c) of the table in s 153(1) and the functionality of the Register be amended to enable a registration to be made against a number of collateral classes at the same time, using a common free text field.
Oppose
Reduction in clarity
93.
That the collateral classes on the Register be changed to the following 6 classes:
• serial-numbered property (with appropriate subclasses for the different types of serial-numbered property);
• other goods;
• accounts;
• other intangible property;
• all present and after-acquired property;
• all present and after-acquired property except.
Oppose
Reduction in clarity
94.
That the Act be amended to make it clear that a registration that contains text that describes collateral is only effective to perfect a security interest in the collateral that is so described.
Oppose
Reduction in clarity
100.
That the table in s 153(1) be amended to provide that a registration against serial-numbered property have the same registration period as for any other collateral, for the relevant type of grantor.
Oppose
Costs don't outweigh benefits
101.
That Government explore whether the current definition of “motor vehicle” in reg 1.7 of the Regulations could be amended so that a vehicle is a motor vehicle (and is only a motor vehicle) for the purposes of the Act and the Regulations if it has a vehicle
identification number.
Oppose
Reduction in clarity
110.
That the Regulations be amended so that a registration to perfect a security interest over trust assets should be made against the relevant details for the trustee, rather than the ABN or other identifying details for the trust.
Oppose
Adds complexity
120.
That item 1(b) of the table in s 153(1) be amended to read:
“(b) a person, nominated by the secured party before the financing statement is registered, who has authority to act on behalf of the secured party in matters relating to the registration.”
Oppose
Adds complexity
158.
That the Act not be amended to give courts a power to rectify ineffective registrations.
Oppose
Increases confidence
330.
That s 268(1)(a)(ii) be amended to read: “(ii) a PPS lease;”.
Oppose
Piecemeal change