INDUSTRY NEWS
Fighting for a worthy cause to make life easier HRIA executives have been busy working behind the scenes to try to get some important amendments in current legislation to make your life easier.
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ames Oxenham, HRIA CEO, Garry Kerr, Oliver Shtein and Tim Nuttall have been lobbying the Assistant Minister to the Attorney General, Senator Amanda Stoker, to have the hire industry removed from Personal Property Securities Act (PPSA). The Act is briefly explained in the article on the next page. HRIA executives also met with Senator Bridget McKenzie and Senator Matt Canavan. The good news is that to have the hire industry removed it doesn’t require a change to an Act of Parliament but a change to the regulations. This means it is a simpler and quicker process. “The PPSA is really a law about finance and security but the hire industry was originally dragged into the PPSA because the government thought that people might be misled when hired assets are left in the hands of customers especially for extended periods,” Oliver Shtein, Bartier Perry consultant, said. “The purported rationale is that buyers or financiers dealing with the customer might be confused and think that the equipment is really owned by the customer and not the hire business. “We think this is a flawed rationale and that hire businesses, which are not really engaging in finance, should be outside the PPSA. The risks to hire businesses obviously outweigh the supposed rationale. “We want to see ordinary hire business transactions out of the PPSA even if the hire goes for more than two years. By ‘ordinary hire business’ we mean hires that are a normal part of a business where the same equipment is typically hired out to more than one customer over the useful life of the equipment.” The benefit to businesses in the hire industry is simple. Hire businesses that don’t really offer finance or finance-equivalents would not have to worry about losing their equipment under the PPSA. There would be no need to register or worry about all of the complexities that go with learning how to make a PPSA registration so that it can’t be challenged if the customer goes into insolvency. But there is still one caveat. “However a hire business that is engaging in substance in finance, for example offering rent to buy, hire purchase or long-term hires
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HRIA is working hard to have the hire industry exempt from the PPSA.
similar to finance leases where the customer is really looking to the hire business as a substitute for obtaining finance and buying the equipment, would still be caught by the PPSA,” Shtein said. HRIA are pleased that this matter will be resolved in the not too distant future. “The impact for businesses where hires exceed 24 months, will be time saved on complex PPS registrations,” Oxenham said. “Hire companies will also be able to go about business without worrying about the risk of losing assets due to the PPS Act. “Even where hires do not exceed 24 months, there is a chance that the contract could be extended or a verbal agreement might be made that the hire can continue, putting them into the realm of PPS leases and therefore exposing these hires to the PPS Act.”
HRIA have been working on changes to the PPSA since 2017. “If it was not for the HRIA, indefinite hires would still be in the Act, meaning the minute equipment left a hire yard it became a PPS lease and needed to be registered on the PPS Register,” Oxenham said. “The HRIA was successful in fast tracking an amendment to the Act in May 2017, which took indefinite hire out of the Act and extended the timeframe before a hire became a PPS lease from 12 months to 24 months. “I would like to personally thank Gary Kerr, Tim Nuttall and Oliver Shtein who have been members of our small but committed team, for their perseverance and commitment to the cause, without whom we would not be where we are today.”
HIRE & RENTAL MAGAZINE MAY 2021
