Since its commencement in 2012, the PPSA has unified the (formerly wide-ranging) approach to securities over personal property, at the cost of significantly increasing its complexity. While some amendments have been made over the years, a significant package of reform changes on the horizon.
Proposed Reforms
In 2014, pursuant to section 343 of the PPSA, the Attorney-General announced a review of the PPSA’s operation was to be conducted. The review was to be conducted by Bruce Whittaker.
After a lengthy submission and consultation process, Mr Whittaker issued two reports: an interim report on 31 July 2014, and a final report on 18 March 2015 (the Whittaker Report).
The Whittaker Report did not hold back. Its recommendations were both wide-ranging and precise, and recommended, in many respects, a substantial reconfiguration of the PPSA, culminating in 394 recommended amendments.
Among other things, the Whittaker report recommended:
1. Simplifying the rules applying to the perfection of security interests over trust assets, by removing the requirement that a security interest be registered over the trust’s ABN (this administrative technicality would subsequently go on to cause one secured lender to lose a $23 million crusher);
2. Modifying the definition of a “PPS Lease”, including by removing bailments from the definition of a PPS Lease;
3. Repealing technical sections of the Corporations Act 2001 (Cth) concerning the time in which security interests need to be offered, lest they vest in a company in external administration; and
4. Limiting the definition of “motor vehicle” to a vehicle that has a Vehicle Identification Number (VIN).
Those recommendations sat unactioned for nearly 10 years, until September 2023, when the Attorney-General’s Department announced the government’s response to the Whittaker Report.
The Government’s Response
As with the Whittaker Report, the government’s response was both comprehensive and wide-ranging, touching on the myriad issues raised by the Whittaker Report; indeed, the government adopted 345 of the 394 recommendations; including the Whittaker Report’s recommendations concerning removing bailments from the definition of a “PPS Lease”, simplifying the registration requirements to perfect security interests over trust assets, and narrowing the definition of motor vehicles. The recommendation regarding technical sections of the Corporations Act 2001 (Cth) was rejected.
One aspect the government has not yet resolved is how these reforms will affect existing security interests. The government has proposed two approaches:
1. Grandfathering: the adoption of a dual regime approach to the PPSA, meaning that:
a. Security interests granted before the amendments to the PPSA will not be subject to the amendments; and
b. Security interests granted after the amendments will be subject to the amendments; or
2. Temporary Perfection: the implementation of a grace period, during which security interests are temporarily “perfected”, in which time secured parties are expected to “correct” any defects in their security interests which arise because of the amendments.
If the former approach is taken, then two regimes will be operating simultaneously for a long time. Some security interests do not have an end date, and many operate for seven, or even 25 years.
Implementing the Government’s Response
Despite nearly two and a half years having passed since the government’s response, the PPSA remains unamended.
This is likely a result of the public consultation process in respect of the government’s response having been transferred from the Attorney-General’s Department to the Treasury in May 2025.
It remains to be seen when the amendments will be introduced; though the government does not appear to be in any rush to do so.
Key Takeaways & How We Can Help
While these reforms pose are markable opportunity for reform (and in some respects, such as the amendments to the perfection of security interests over trust assets, are a much-needed change), their lasting implications are uncertain.
In particular, whether a transitional approach of grandfathering or temporary perfection is taken, the next few years will be complicated; with security interests either being governed under one (or another) set of rules, or there being a need to conduct security reviews to bring securities into compliance.
Thomas Dickinson, Associate, and the Watson Webb team can assist, not only with the uncertainties and complexities of transition and new rules, but also with preparing for that transition.
Disclaimer
This article is provided for general information purposes only and does not constitute legal advice. It is not intended to address the specific circumstances of any individual or business. It is also not intended to be a comprehensive statement of the law and is limited to a general commentary on the Personal Property Securities Act 2009 (Cth) and its proposed reforms. Given that this area of law is subject to ongoing legislative development, the information contained in this article reflects the position as at the date of publication and may be subject to change.
Reliance should not be placed on this article as a substitute for obtaining legal advice tailored to your particular circumstances. If you require advice in relation to how the PPSA or its proposed reforms may affect you, you should obtain independent legal advice.
.png)
.png)
.jpeg)
