015 - Airconditioning and Mechanical Contractors' Association Ltd

REVIEW OF THE PERSONAL PROPERTY SECURITIES ACT 2009

1.ThesecommentstothereviewofthePersonalPropertySecuritiesAct

2009(TheAct)aremadeonbehalfoftheAirconditioningand

Mechanical Contractors’Association Ltd ofAustralia.(AMCA)

AMCA Profile

2.The AMCA is the pre-eminentnational organisationrepresenting airconditioningandmechanicalservicescompanieswhojoinedtogether topromotetheindustryalongwiththewellbeing ofitsmembers. The AMCAistheonlytrulynationalemployerandindustryassociationthat isexclusivelydedicatedtotheairconditioning andmechanicalservices industry. The major airconditioning and mechanical services contracting companies inAustraliaare members ofthe association.

3.AMCAactsastheindustry’svoiceindealingwithgovernmentatall levels,otherconstructionandserviceindustrygroups,andthetrade unions.

4.Members of AMCAdesigninstalland provideongoingserviceof airconditioningand mechanical ventilationsystems.

5.Ourmembers have:

•Yearsofexperienceintheairconditioningandmechanicalservices industry;

•aprovenrecordofachievementintheinstallationandservicingof mechanical servicesplant;and

•worked on the mostcomplex construction projectsinAustralia.

6.AMCAmembers, supportedbyyearsofspecialisedexperienceandwith substantialinvestmentsinfixedassets,toolsandequipment,provide themostcost-effective sourceofmechanicalservicesandsystems. Workingwithin anindustrywhich isconstantlyinfluencedbychanging technologies,AMCAmembers deliverthereliabilitythat the workwillbe completed properly,safelyandeconomicallyintheleastpossible amountoftime. FundamentaltotheAMCAmember’sjobisknowing and adhering tothe various building codes and regulations.

7.Since its beginning in 1961 the AMCA has existed to represent, promoteandsafeguardtheinterests ofitsmembersandthebusiness sectorsinwhichthey are engaged by:

•influencingthe commercialenvironment inwhichthey operate;

•promoting high competence standards; and

•providingqualityadviceandguidancetosupportallaspectsoftheir business.

8.The air conditioning and mechanicalservicesindustryisdiverse, complexandatthecutting edgeofenvironmentalandenergyefficiency issues.Collectivelyour members are responsible for:

•$1.2Binvalue ofnewplant installedannually.

•$500M inequipment serviceand maintenance work.

•The employmentofsome 8,000 people.

Member Feedback on the Act

9. TheActcommencedon30January2012. Theintention oftheAct wasto ensureinsolvencypractitionersweremoreeasilyableto identifysecurity interests inpropertyforpurposesof expediencyinwindingupinsolvent businesses. TheActhasbeenoperatingfortwoyearsanditisclearthere havebeenunintendedconsequencesfortheoperatorsofSMEsespecially thosewho provideandhire equipmentto theconstruction industry.

10. Commentfromourmembersandtheirlegalandaccountingadvisersreveals confusionandfrustrationtryingtounderstandingwhat actuallyneedstobe registered. FurthermorebusinessesfindtheonlineRegister difficult, particularlywhenhavingto enter detailsfor multipleitems of equipment. The website is generic andfails to provideforastreamlined approach.

11. TheActisacomplexpieceoflegislationusinguniqueterminology. For SMEbusinesses this presentsa problemof understanding the requirements. WhileweaccepttheAct attemptsto fixsomeproblemsit creates others.We believe commercial lenders and insolvency practitionershavebenefitedasaresultoftheActattheexpenseof SMEs. AMCAsubmitsthebenefits oftheActareexceededbyits implementationand administrativecosts.

12. TheActislikelytohavecontributedtoincreasedfinancingcostsforthe industry.Furthermorethe Acthasmade itmoredifficultfor businessestoconductduediligence examinationswherethelender requiresthebusinesstoprovidedetails oftheassetsitisputting forward.Expert financialassistance and added costisoftenrequired to completethese obligations.

13. Thecomplexity oftheActwashighlightedinthe2012collapseofthe HastieGroupofcompanies. Inthatcasetheliquidators faceddifficult problemsasthey assessedthestatusof manyof the hundredsof registrationswhichweremade under the Act.

14. Insummary,AMCAsubmitsthe Act:–

•Iscomplex and notunderstood by industry.

•Hasadded tofinancing costs inthe industry.

•Hasadded significantcostan administrativeburden toSMEs.

15. Inall the circumstancesAMCAbelievesfundamentalchanges are required tothe Act.