Managing Partners Luncheon

Law Society Building,
170 Phillip Street, Sydney

Friday 16 May 2008, 1.15pm

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Acknowledgements

First, may I acknowledge the traditional owners of the land we meet on – and pay my respects to their elders, both past and present.

Other Acknowledgements

Chair, Mr Joe Catanzariti, Senior Vice President, Law Society of New South Wales Mr Hugh Macken, President, Law Society of New South Wales The Honourable Robert Tickner, Chief Executive Officer, Australian Red Cross (also speaking) Members of the Managing Partners Group

Introduction

Thank you all for your welcome this afternoon.

It’s a great pleasure to be here with the Managing Partners Group, to see some familiar faces from my days as a practising lawyer, and to make new friends.

If I was to give a title to the matters I will raise this afternoon, it could best be summarised as, ‘A Legal Framework for a Modern Competitive Economy’.

In the 21st century, governments must deal with the ebb and flow of regulations that govern trade and business.

Government’s role is to effectively manage our laws to reflect the contemporary era, its aspirations and demands, and to encourage rather than stifle economic growth.

Against this background I want to refer to some current reforms in the Rudd Government’s program.

As Attorney‑General, I am committed to ensuring that reforms to the legal system remove hindrances to business activity by minimising red tape and reducing costs.

This is essential to provide a modern legal framework to improve the productivity and competitiveness of our economy and ensure Australia is positioned to be the commercial legal services hub of our region.

Personal Property Securities Reform

I was pleased that last December the Council of Australian Governments committed itself to pursuing an ambitious business deregulation agenda.  

The Prime Minister, through COAG has established a Business Regulation and Competition Working Group to oversee reform in the regulatory hot spots.

These reforms will deliver tangible economic benefits.

I am charged with the establishment of a national framework for Personal Property Securities – or PPS.

As most of you know, PPS reforms have a long and complicated history, dating back to the early 1990s.

For the Rudd Government, PPS reform is a return to unfinished business. Michael Lavarch, a former Attorney-General in the Keating Government, raised the idea of a national scheme in the early 1990s. I’m pleased to say that the Rudd Government is injecting renewed vigour into finalising this most necessary reform.

It’s useful to remind ourselves why we’re embarking on this reform in the first place.

PPS is a multi-billion dollar industry in Australia.

And it is the kind of financial activity that needs to be certain, seamless and efficient.

Right now, there are more than 70 different Commonwealth, State and Territory Acts that regulate personal property securities.

After the reform, there will be only one Commonwealth Act.

Today I have released an Exposure draft Personal Property Securities Bill for public comment.

Input can be made until 15 August this year.

Many of your firms have already made valuable contributions to the development of the Bill. From 26 May my Department will be holding public seminars in Sydney, Melbourne, Brisbane and Perth to discuss the Bill.

I encourage you to promote these seminars and to raise any issues or concerns.

I am keen to ensure that the reforms respond to the needs of your clients, financiers and those seeking to use personal property as collateral.

We are working on developing the national online register of personal property security interests.

And my Department has today released a Request for Tender to develop and build the register based on the use of state of the art information technology.

Key Aspects of the PPS Exposure Bill

PPS reform has already occurred in other jurisdictions – New Zealand, Canada and the United States.

Their experiences, the standards of international best practice and the needs of the Australian commercial environment are all key determinants of the Bill.

The Bill will set out the circumstances in which a security interest attaches to property.

It will also govern the interaction between security interests and establish the rules that govern priority.

This priority will largely be on a first-to-register basis.

This will give greater certainty to financiers who will be able to ascertain the ranking of their security interest.

The Bill also establishes a remedial process which secured creditors can use in the event of a default.

Importantly, the uniform Consumer Credit Code will continue to apply to consumer transactions for enforcement purposes.

I welcome your ongoing input and look forward to receiving your suggestions and comments as to how the Bill may be improved.

In that context you may consider framing your comments against the policy rationale underpinning PPS reform.

That is, we are seeking to increase the consistency and reduce the complexity in our laws.

This will also allow credit providers to improve the quality and efficiency of their businesses with lower costs to all those involved.The reforms will create a better system and the reduction in costs should ultimately be passed onto consumers.

SCAG

PPS is one area where the Rudd Government is pursuing legal harmonisation.

But I also want to make clear that I’m committed to utilising the Standing Committee of Attorneys-General, or ‘SCAG’, to do more in this area.

Progress by SCAG on legal harmonisation has often been criticised as being too slow. However, with like minded Governments in every Australian jurisdiction, I am committed to making SCAG a dynamic and efficient ministerial forum.

We have a unique opportunity to reinvigorate projects which have stalled, to move beyond the deadlocks of the past and achieve real progress.

At our March meeting, I asked my State and Territory colleagues to commit to an ambitious reform agenda and to review our priorities so we can make sure we’re all heading in the right direction.

We will of course engage with external stakeholders, including the legal profession.

To facilitate this, SCAG agreed to convene a one-day conference later this year.

It will draw on the expertise of the legal profession, government lawyers and academics.

We are committed to genuine consultation. I encourage direct engagement with practitioners and other stakeholders and I am confident this new process will help shape SCAG’s approach.

National Legal Profession Project

One example of a SCAG initiative which cannot afford to be held up any longer is the National Legal Profession Project.

It is encouraging that the legal profession at all levels in New South Wales has always been an enthusiastic and committed supporter of developing, and implementing, the National Model Bill.

New South Wales, closely followed by several other jurisdictions, implemented, and now benefit from, the greater efficiencies that the Model Bill delivers.

I will be encouraging the efforts of my counterparts in the two remaining States, Western Australia and South Australia, to implement their legislation.

And I have asked my Department to do the same with the relevant State officials.

It is imperative for Australia to  offer its legal practitioners the ability to practise seamlessly across all jurisdictions.

A fully national system will not only benefit local practitioners, but Australia’s international competitiveness.

Electronic Conveyancing

On the domestic front, I am pleased to say that at its meeting in March this year, COAG agreed to the development of a national electronic conveyancing system.

SCAG has also endorsed the system.

This initiative has the potential to generate benefits for all parties to land transactions.

A national system would again cut red tape.

The legal profession, banks and consumers, should all expect reduced costs.

I believe the recent impetus given by COAG and SCAG will reinvigorate the project and get it moving.

Legal Services Procurement

The Government itself is not immune to the need to operate efficiently in a modern economy.

I think it is timely to look at the way the Commonwealth purchases legal services.

The large increase in spending on legal services in the last financial year suggests that it is appropriate, and responsible, to look at whether taxpayers are getting value for money from the Government’s legal spend.

I am currently considering a number of options for reform and how the Commonwealth can get smarter about the way it purchases legal services.

These include but are not limited to:

Needless to say, I will be ensuring that any such initiatives adopted by the Government do not result in a decrease in the quality of legal services provided.

I am committed to working with the legal profession in developing these initiatives and I look forward to considering your views and ideas.

International Trade Law

Creating a legal framework for a modern economy means we must also look beyond Australia’s national borders.

Our focus, first and foremost, is global.

To that end, the Rudd Government is committed to achieving results in international trade in legal services.

Our Free Trade Agreements have already resulted in increased foreign market access for Australian lawyers.

Preferential conditions under the Singapore Free Trade Agreement have allowed at least one major Australian law firm to confidently start a joint venture in Singapore.

Delaware, the major corporate law hub in the US, has also recently passed a new Foreign Legal Consultant Rule.

This has been as a result of joint work by my Department, DFAT and the Law Council of Australia.

At the regional level, the Rudd Government is pursuing an APEC Legal Services Initiative, which will improve mobility of lawyers between APEC economies, and increase transparency of foreign legal regulations. This is important to ensure that regulation is not contrived to exclude participation.

And we will continue to pursue multilateral initiatives to advance our national legal services trade agenda.

The Prime Minister, in his overseas visit last month, called upon his US, European and Chinese counterparts to urgently revive the Doha round of WTO trade talks.

Its successful completion would help spark the economies of developing and developed countries, many of whom are currently languishing from the global credit crisis.

I am also looking at ways to make our legal system more user friendly to corporations that operate in our region.

It is inappropriate that they should have to spend thousands on advice about competing State and Federal jurisdictions even before a remedy is considered.

Conclusion

As international trading ties broaden and deepen, it is vital that countries and organisations are able to deal with Australian businesses with absolute confidence and certainty.

As I said at the outset, the Rudd Government is committed to building a modern competitive Australia that is ready to meet the challenges of the 21st century.

Already Australia has a reputation as a nation others can trust because of our honesty and transparency in business dealings.

Clearly, we have opportunities to enhance this by being competitive through a range of initiatives including some of those I have referred to today.

Equally I am sure more work can be dome on ensuring areas of specialist arbitration are made simpler, consistent and more definite in outcome.

Again these are all areas of work in progress and I welcome your views.

Your presence here this afternoon underpins the value of collaboration.I value informal meetings such as this one.

It is a great opportunity to encourage the exchange of ideas and views.

All of us are privileged to work in the law, whether in government or the private sector.

I encourage everyone to participate in informed debate, and contribute fresh perspectives and initiatives to the Government.

Thank you for the contributions you are making.

I urge you all to continue doing what you can to ensure the ongoing improvement of Australia’s legal landscape.

ENDS