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Hire&Rental
INDUSTRY NEWS
HRIA action on PPSA stalled but not deterred by election Australian hire companies remain at the mercy of a law that under certain circumstances can trap them into ruinous financial burden if a construction client goes bust. This update outlines the action taken by the HRIA to bring legal reform and what is being requested.
By Virginia Laugesen The push to amend the Personal Property Securities Act 2009 (PPSA), led by Hire and Rental Industry Association CEO James Oxenham, has been interrupted by the federal election. But HRIA members can be assured that the pressure will continue, regardless of the election outcome. The PPSA operates in conjunction with the Personal Property Securities Register (PPSR), the record of equipment on hire at construction sites. This structure, linking the regulation to the register creates confusion about the financial ownership of hired assets by assigning that equipment the same status as assets belonging to the building company, in the case of voluntary administration.
Probuild’s impact
Probuild’s collapse in February was a catalyst for the HRIA’s renewed action to change the PPSA and exclude hire companies from unfair risk. “When the Probuild liquidation was announced, the HRIA immediately surveyed its members and within days could confidently estimate that at least four million dollars’ worth of equipment was on hire to Probuild sites from among the responses we received,” said James Oxenham.
MAY 2022
The HRIA CEO was quick to alert Senator Stoker, who is the Assistant Minister to the Attorney General and has the portfolio covering the PPSA, about the financial impact of the liquidation on all hire companies. James reiterated to her the legal advice already supplied to the government about the simple nature of the reforms required, hoping to have the regulations amended during the parliament’s final sitting of its term, pre-election. Unfortunately, amendments to the PPSA were not on the government’s agenda for its closing session.
Simple changes needed
Instead, the law remains in place that currently treats your on-hire EWPs, floodlights, fencing, generators or anything else hired to builders who subsequently go into liquidation, as owned assets of a bankrupted company. “The HRIA’s PPSA taskforce, with assistance from Bartier Perry Lawyers, made significant progress on behalf of members during the past two years, including attending a successful personal meeting in Canberra in March 2021 with Senator Stoker,” said James. “Our delegation explained the unfair imposition on hire companies and proposed our legally informed, 40-word amendment to remove the problem.” “Lobbying politicians for reform is a lengthy process requiring a patient and well-managed approach. Although our efforts will need to re-start, whether there is a Federal Cabinet reshuffle or a new government taking office mid-year, the case for PPSA reform is strong and our legal research backs this up. When construction companies collapse, their widespread negative impact on communities and businesses cannot be ignored by any government, and the hire sector represents a significant number of those affected parties.”
