The Government introduced a bill into parliament in March to proposing the following amendments to the Personal Properties Security Act 2009 (PPS Act):
- Remove the provision deeming that leases of serialised goods for more than 90 days are a ‘PPS lease’; and2.
- Amend the definition of ‘motor vehicle’.
Currently, a lease for serialised goods of more than 90 days is a deemed PPS lease pursuant to the PPS Act, requiring registration on the PPS Register. The amendment proposes to remove this requirement, simplifying the deeming provisions for PPS leases to relate only to leases for a term of more than 12 months or more, aligning Australia’s PPS lease provisions with other jurisdictions operating under a similar regime.
If the bill is passed, the amendment will reduce onerous compliance costs on small and medium hire businesses leasing serialised goods, such as motor vehicles, boats and aircraft, for short periods of less than 12 months, as these leases will no longer require registration on the PPS Register.
It is important to note that if passed these provisions will not revoke any deemed PPS lease arrangements entered into prior to the amendments to the PPS Act.
A further measure to reduce PPS complexities is the Personal Property Securities Amendment (Motor Vehicles) Regulation 2014 (PPS Regulations) which will commence on 1 July 2014 to amend the definition of ‘motor vehicle’.
The definition currently provides that a motor vehicle is either “capable of a speed of at least 10km/h” or “has one or more motors that have a total power greater than 200 W”. The amendment narrows the definition to require both of these elements. Motor Vehicles are a sub-category of ‘serial-numbered goods’ which require individual registration under the PPS Act. This amendment narrows the goods within this category and will limit the scope of motor vehicles requiring registration on the PPS Register, again reducing compliance costs.
The final report for the statutory review of the PPS Act is due on 30 January 2015 where it is expected that further recommendations will be made to improve and simplify the PPS Act.
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