Consultation Draft Cost Recovery Arrangements · PPSR Consultation Draft Cost Recovery Arrangements...

Personal Property Securities Program

Consultation Draft Cost RecoveryArrangements

PPSR Consultation Draft Cost Recovery Arrangements

Purpose of this consultation

The purpose of this Cost Recovery Impact Statement (CRIS) is to review and makerecommendations for the cost recovery arrangements for the Personal Property SecuritiesRegister (PPSR) in line with the Australian Cost Recovery Guidelines and to facilitateappropriate stakeholder consultation.

Following the consultation period a revised CRIS will be published. Issues raised bystakeholders during the consultation period will be summarised and utilised in finalising theCRIS, where appropriate.

Making a submission

The Attorney-General’s Department (AGD) is inviting written submissions on the proposedfees and charges and issues raised in the CRIS.

Submissions should include the name of your organisation (or your name if the submission ismade as an individual), contact details for the submission, including an email address andcontact telephone number where available.

Comments / submissions on the CRIS must be received no later than 24 September 2010.

Comments / submissions may be provided by email to [email protected].

Comments / submissions may also be mailed to:

Personal Property Securities BranchAttorney-General’s Department3-5 National CircuitBARTON ACT 2600

Confidentiality

All submissions will be treated as public, and may be published on the Attorney-General’sDepartment website or PPSR website, unless requested by the author. For submissions madeby individuals, all personal details will be removed where possible from your submissionbefore it is published.

A request made under the Freedom of Information Act 1982 for access to a submissionmarked confidential will be determined in accordance with that Act.

Confidential material contained within submissions should be clearly marked. Reasons for aclaim to confidentiality must be included. Where possible, confidential material will beremoved from material published on the PPSR website.

Enquiries

Enquiries should be directed via email to [email protected].


Contents 1 Personal Property Securities Register ................................................................................4

1.1 Purpose ........................................................................................................................41.2 Personal Property Securities Reform ..........................................................................41.3 Personal Property Securities Register .........................................................................41.4 Operational Responsibility..........................................................................................5

2 Australian Cost Recovery Policy.......................................................................................62.1 What is Cost Recovery? ..............................................................................................62.2 Why have Cost Recovery? ..........................................................................................62.3 Principles underpinning Cost Recovery Arrangements ..............................................7

3 Application of Principles underpinning PPSR Cost Recovery ..........................................93.1 Cost Recovery Principles ............................................................................................93.2 Economic Efficiency...................................................................................................93.3 Design Principles.......................................................................................................103.4 Operating Principles..................................................................................................11

4 Design and Implementation .............................................................................................124.1 Basis for Charging.....................................................................................................124.2 What are the Legal Requirements for the Imposition of Charges? ...........................12

5 Costs to be included in Charges.......................................................................................135.1 PPSR Services and Activities....................................................................................135.2 Forecast Demand Levels ...........................................................................................135.3 Costs ..........................................................................................................................145.4 Outline of Charging Structure ...................................................................................18

6 Summary of Charging Arrangements ..............................................................................197 Ongoing Monitoring, Periodic Review and Stakeholder Consultation ...........................21

7.1 Ongoing Monitoring..................................................................................................217.2 Periodic Review ........................................................................................................217.3 Stakeholder Consultation ..........................................................................................21

8 Certification .....................................................................................................................229 Cost Recovery Links........................................................................................................23


1 Personal Property Securities Register

1.1 Purpose

The purpose of this Cost Recovery Impact Statement is to review and make recommendationsfor the cost recovery arrangements for the Personal Property Securities Register (PPSR) inline with the Australian Cost Recovery Guidelines and facilitate appropriate stakeholderconsultation.

The proposed receipts from the PPSR are expected to exceed $5 million per financial year inoperation. Accordingly a Cost Recovery Impact Statement is required to be prepared inaccordance with the Australian Cost Recovery Guidelines.

1.2 Personal Property Securities Reform

In 2007, the Council of Australian Governments committed to reform of Personal PropertySecurities (PPS) within Australia. Prior to the reform, more than 70 Commonwealth, Stateand Territory Acts regulated personal property securities. The Commonwealth, States andTerritories all had their own personal property schemes with separate registers and legislationrelating to those registers. The requirements for registering a security interest in personalproperty varied depending on the type of personal property, where it was located and whetherthe property belonged to an individual or a corporation.

The Commonwealth Government’s PPS reform introduced a single Commonwealth Act, thePersonal Property Securities Act 2009, which provides rules for the creation, extinguishmentand enforcement of security interests in personal property and for determining priority amongcompeting security interests. The Act has been supported by the creation of a single nationalelectronic register of personal property security interests.

1.3 Personal Property Securities Register

A single, national PPSR is a key outcome of the PPS reform. The PPSR will be a noticeboard of personal property interests.

Personal property is any form of property other than land or buildings and fixtures which arelegally treated as forming part of land. Personal property can include tangibles (e.g. cars,boats, machinery, crops) and intangibles (e.g. shares, intellectual property, receivables andcontract rights). Personal property that might be offered as security for a loan includes cars,or the trading stock and equipment of a business.

Registrations on the PPSR will help prospective purchasers and lenders:

• determine whether personal property may be subject to a security interest or otherrelated interests; and

• facilitate the resolution of priority disputes.

The PPSR is also expected to help prospective borrowers to obtain finance and lower rates ofinterest where they offer an item of property as security.


The PPSR will replace more than 40 existing registers of security and related interestscurrently administered by Commonwealth, State and Territory agencies.

The PPSR will be computer based, publicly accessible and updatable in real time. The PPSRwill primarily be accessed through the internet and Business-to-Government connections.Limited access to the PPSR will be possible via the contact centre, physical lodgements andphone.

1.4 Operational Responsibility

In late 2009, the Attorney-General decided that operational responsibility for PPS wouldtransfer from the Attorney-General’s Department to Insolvency and Trustee ServicesAustralia (ITSA) on commencement of operations in May 2011. Pending formal transfer ofoperations, the Department remains responsible for oversight and delivery of the PPS reform.The Department and ITSA are working collaboratively to ensure a smooth transition andcommencement of the PPS system.


2 Australian Cost Recovery Policy

In December 2002, the Australian Government adopted a formal cost recovery policy toimprove the consistency, transparency and accountability of Commonwealth cost recoveryarrangements and to promote the efficient allocation of resources. The underlying principle ofthe policy is that entities should set charges to recover all the costs of products or serviceswhere it is efficient and effective to do so, where the beneficiaries are a narrow andidentifiable group and where charging is consistent with Australian Government policyobjectives. Cost recovery policy is administered by the Department of Finance andDeregulation and outlined in the Australian Cost Recovery Guidelines (Cost RecoveryGuidelines).

The policy applies to all Financial Management and Accountability Act 1997 (FMA Act)agencies and relevant Commonwealth Authorities and Companies Act 1997 (CAC Act)bodies that have been notified. In line with the policy, individual portfolio ministers areultimately responsible for ensuring entities’ implementation and compliance with the CostRecovery Guidelines.

As a significant arrangement the PPSR cost recovery arrangements need to documentcompliance with the policy through a Cost Recovery Impact Statement (CRIS).

2.1 What is Cost Recovery?

Cost recovery is the recovery of some or all of the costs of a particular activity. AustralianGovernment cost recovery charges fall into two broad categories:

• fees for goods and services, and

• cost recovery taxes (primarily levies, but also excise and customs duties).

Cost recovery is different to general taxation. Some levies or taxes are used to raise costrecovery revenues. The direct link or ‘earmarking’ between the revenue and the funding of aspecific activity distinguishes such cost recovery from general taxation.

General taxation, on the other hand, is a compulsory extraction of money by a publicauthority for public purposes, enforceable by law, and is not a payment for services rendered.

2.2 Why have Cost Recovery?

Cost recovery can help to provide efficiencies in the way Australian Government productsand services are produced and consumed.

Charges for goods and services can send an important message to lenders/brokers/otherpersons wishing to use the Register or their customers about the cost of resources used. Itmay also improve the equitable share paid by those who use Australian government productsand services.


2.3 Principles underpinning Cost Recovery Arrangements

The Australian Cost Recovery Guidelines require that cost recovery arrangements beassessed against cost recovery principles contained in the Guidelines. These principles can bebroadly grouped into:

• economic efficiency

• design principles

• operational principles; and

• efficiency principles.

2.3.1 Economic efficiency

The general principles relating to economic efficiency support cost recovery as an importantmeans of improving economic efficiency, by:

• sending an important pricing message to users or customers about the costs of resourcesinvolved

• reducing the call on general taxation revenue and avoiding the high efficiency lossesfrom higher taxation revenue

• improving horizontal equity by ensuring that consumers or beneficiaries of productspay for the costs; and

• improving agency performance through transparency of costs and increased cost-consciousness in both the agency and users.

2.3.2 Design principles

Design principles require that cost recovery arrangements:

• avoid cross-subsidisation across user groups,

• are subject to the same public administration principles that apply to all governmentactivities, and

• incorporate an appropriate level of industry consultation to help drive agencyefficiency.

2.3.3 Operational principles

Operational principles require that:

• all cost recovery arrangements should have clear legal authority

• cost recovery charges should be linked as closely as possible to the actual costs ofactivities or products


• costs to be recovered should relate to specific activities, not the agency that providesthem

• targets should not be set for the level of costs to be recovered

• over-recovery is inappropriate

• outputs or activities that have ‘public good’ characteristics may be taxpayer funded

• costs to be recovered may exclude activities undertaken for government where they arenot integral or directly related to the provision of regulatory activities; and

• partial cost recovery is generally not appropriate.

2.3.4 Efficiency principles

A key principle is that cost recovery should be based on ‘the efficient costs’ of the activityand should avoid:

• regulatory creep, where additional regulation is imposed without adequate scrutiny

• gold plating, where unnecessarily high standards or facilities are adopted or there issimply over-regulation; and

• cost padding, where costs are artificially inflated in the knowledge that all costs can berecovered.


3 Application of Principles underpinning PPSR CostRecovery

The proposed PPSR cost recovery arrangements for the PPSR will comply with theGovernment’s Cost Recovery Guidelines and will be consistent with the key principles thatunderpin them.

3.1 Cost Recovery Principles

3.1.1 Cost recovery will not unduly stifle competition and industry innovation

The PPSR will replace more than 40 existing registers of securities and related interestscurrently administered by Commonwealth, State and Territory agencies.

The introduction of a single national framework and fee structure will replace the existingfragmented, complex and inconsistent law and registration arrangements providing greaterlegal and financial certainty to financiers.

An efficient and appropriately funded national personal properties registration system willalso increase competition and improve access to finance, notably for small business, wherethey can offer collateral to offset financier risk.

3.1.2 Cost recovery is consistent with the Government’s policy objectives

In the 2007-08 Budget, the Australian Government announced that its cost recoveryprinciples will be applied to the PPSR. In the 2010-11 Budget, the Government announced anadditional $18 million in 2010-11, which will require the cost recovery operations to beincreased by $6 million per year over three years from 2011-12 to offset the additionalfunding.

3.1.3 Cost recovery is cost effective and cost efficient

The proposed cost recovery arrangements are considered to be both cost effective and costefficient. The proposed fees can be accurately linked to the estimated cost of operating thePPSR, including both direct and indirect costs. And the cost of collecting the proposed feesand charges will be administratively efficient and inexpensive.

The users of the PPSR can be readily identified when they access the PPSR, and in mostcases the fees are expected to be paid on-line at the time of access, with minimal manualintervention and cost.

3.2 Economic Efficiency

Cost recovery of the operation of the PPSR is considered to be economically efficient for thefollowing reasons:

• the imposition of fees that are cost reflective and appropriately structured sends animportant pricing signal to users of the register and discourages excess demand,


because it is a free resource, which will increase the cost of operating the register overthe long term through increased maintenance and data storage costs

• cost recovery of the PPSR will reduce general taxation and ensure that it isappropriately funded and can operate on a sustainable basis, free of additionalgovernment funding

• the cost recovery arrangements will improve horizontal equity by ensuring thebeneficiaries of services pay for the costs of those services; and

• through appropriate consultation processes, including ongoing monitoring of the costrecovery arrangements, there will be a high level of transparency.

3.3 Design Principles

Charges can be collected in a variety of ways and based on different measures of cost. Theproposed cost recovery arrangements incorporate the following design and operatingprinciples, in compliance with the Australian Cost Recovery Guidelines.

3.3.1 The beneficiaries of the PPSR should pay the Fees

The direct beneficiaries of the PPSR include lenders, borrowers and vendors:

• Lenders - The PPSR will provide greater certainty for secured lenders and a singlePPSR supports the establishment of a clear set of rules for ordering priority betweencompeting parties in secured property;

• Borrowers - Greater certainty about whether an item of property is subject to asecurity interest should increase the availability of finance and reduce borrowing costsfor borrowers.

• Vendors - Vendors will be beneficiaries of the PPSR. Increased certainty for lendersand increased access to finance for borrowers is expected to benefit vendors throughincreased business activity.

It is considered appropriate that the cost of the PPSR is recovered from the beneficiaries,rather than the Australian community through general taxation. The beneficiaries form aseparate and distinct group who can be identified when they access the PPSR, either directlyonline or through the contact centre.

3.3.2 Fees will be cost reflective

The proposed fees are based on the whole of life cost of the PPSR. The fees will be recoveredin full based on those costs and estimated demand. They will not include agency costs thatare not integral to the services provided, particularly activities that can be regarded asservices to government.

The proposed fees reflect the cost difference between online access and access through thecontact centre, where manual handling and data processing is required.


3.3.3 Public Administration

The PPSR operations will comprise a business function within ITSA and will be subject to itsexisting public administration principles.

3.3.4 Industry consultation

AGD and ITSA will publish the CRIS on their websites. In addition, regular stakeholder forawill be held to encourage feedback on the proposed fees and charges.

It is proposed that the fees are monitored on an ongoing basis and are reviewed in accordancewith the principles set out in section 7.2 – Periodic Review.

3.4 Operating Principles

3.4.1 The cost recovery arrangements will have full legal authority

The authority to recover the costs of the regulatory activity is contained in the PersonalProperty Securities Act 2009 and proposed Regulations. The fees will be set by a legislativeinstrument.

3.4.2 Charges will be linked as closely as possible to the actual cost of services

The fees have been based on the full annual cost of operating the PPSR. The fees have beenstructured so that users pay an equitable share of the costs and reflect the higher cost ofaccessing the PPSR through the contact centre, with the exception of basic searchesundertaken by phone. These will attract the same fee as an equivalent online search to ensureindividuals who are not able to access the PPSR through the internet are not disadvantaged.

Only costs that relate to the operations of the PPSR are included. The costs of policy relatedactivities or other government activities that are not related to the operation of the PPSR arenot included.

Approximately $18 million will be generated over the first three years of operation of thePPSR, which will repay the additional funding from the Australian Government in 2010-11 tocomplete the establishment of the Register.


4 Design and Implementation

Charges can be collected in a variety of ways and based on different measures of costs. Theyshould include the following principles:

• linking the charge as closely as possible to the activity or product to be cost recovered

• a system design that is cost effective to calculate, collect and enforce

• a system design where the compliance costs of paying the charges are not excessive

• ensuring all aspects of the charging mechanism are consistent with the policyobjectives of the agency; and

• a charging system that is consistent with other Australian Government policies.

4.1 Basis for Charging

Cost recovery charges can be collected using:

• a fee that charges individuals or firms directly for the cost of providing the activity; or

• a levy established using a tax Act on a group of individuals or firms.

When cost recovery is appropriate, charges should be based on fees and charges as long asthey are efficient, cost effective and consistent with the policy objectives of the agency.Levies do not have the efficiency advantage of fees because they are not as closely linked tothe cost of individual activities. They may also place less direct pressure on the agency toimprove efficiency. Where possible, charge for activities will be made directly through fees.

For PPSR activities, separate components include the base services (eg registrations ofsecurity interests, variations of security interests and searches of the register), the channel foraccessing the services (eg online, contact centre) and the response required (eg provision ofhard copy of search results compared to online pdf). The basis for determining fees is thewhole of life cost of these services.

Cost recovery via a fixed fee for service is considered to be the recommended basis forcharging users who access the register. The main benefit of this is that there is a direct linkbetween the cost of service and the level of the charge.

This approach will encourage transparency and efficiency in the delivery of services.

4.2 What are the Legal Requirements for the Imposition of Charges?

Section 190 of the Personal Properties Securities Act 2009 provides that the Minister (theAttorney-General) may, by legislative instrument, determine fees for registration and searchservices. The details of the charges will be set out in the legislative instrument which willallow the Registrar to fully recover the costs of PPSR services.


5 Costs to be included in Charges

5.1 PPSR Services and Activities

The PPSR will provide online access, on a 24-hour basis, to users to:

• register financing statements

• attach documents to financing statements

• amend existing financing statements

• cancel financing statements

• manage secured party groups

• search the register

• obtain search results; and

• obtain reports.

Users will also be able to access the PPSR through the contact centre during extendedbusiness hours and weekends.

Registrations are valid for three different durations:

• an undefined duration

• a duration of seven years or less; and

• a duration greater than seven years.

The costs which are integral to providing those services are included in the fees and charges.In developing the fees and charges, separate costs pools have been developed to ensure:

• the full cost of providing the services can be accurately estimated; and

• AGD and ITSA costs that are not integral to the services are excluded.

The proposed charges do not include the cost of any activity or service to government that isnot integral, or directly related, to the provision of PPSR services. Although there will be asmall policy unit within the Attorney-General’s Department, which will provide advice toGovernment, this will not be cost recovered (Budget Measures 2007-08 page 79).

5.2 Forecast Demand Levels

An estimate of forecast demand levels has been developed based on data provided by thestate and territory jurisdictions and the Australian Securities and Investment Commission.


The data is based on volumes collected for 2008-09.

ACTIVITIES Annual Volumes

Registrations 988,000Amendments 194,000Cancellations 862,000Searches 5,301,000Total 7,345,000

5.3 Costs The table below describes the cost items and associated costs that will be incurred on anannual basis for the first three years of operation of the PPSR. As noted above this includesonly the costs that are considered to be integral to the operation of the PPSR.

FTE Year 1 Year 2 Year 3OPERATING EXPENSES $000s $000s $000s

PPSR Labour CostsContact centre 52.1 4,423 4,602 4,784Registry 17.0 2,285 2,378 2,472IT support 6.5 735 765 795Total 75.6 7,442 7,745 8,051

IT CostsSoftware maintenance 4,039 2,672 2,671Infratructure support and maintenance 3,189 3,286 3,387Disaster recovery 983 987 991Total 8,211 6,946 7,049

External CommunicationsData 359 360 359Telephone 207 212 215Links to external databases 1,340 1,341 1,341Total 1,907 1,913 1,915


Year 1 Year 2 Year 3OPERATING EXPENSES $000s $000s $000s

DepreciationHardware 1,056 1,057 1,056Software 5,872 5,988 6,098

Property fit outs 524 524 524Total 7,452 7,569 7,678

General ExpensesProperty operating expenses 641 661 680Public awareness 281 116 119Mail 124 127 129Merchant fees 43 43 43Other general expenses 150 156 162Total 1,239 1,103 1,134

Corporate Overheads 3,065 3,190 3,316

Repayment of Government Funding 6,002 6,002 6,002

TOTAL 35,319 34,468 35,144

5.3.1 PPSR labour costs

PPSR labour costs are based on current AGD and ITSA awards, together with appropriateallowances for on-costs.

An estimated 75.6 full time equivalent staff will be required to support and maintain thePPSR. They comprise

• Contact centre. 52.1 FTEs will handle an expected 800,000 enquiries per year as wellas processing PPSR transactions, mail and cash receipts;

• Registry. 17 FTEs will provide registry services, PPSR operations management andsupport services; and

• IT Support. 6.5 FTEs will provide additional IT support, including IT support for thecontact centre, registry and dedicated PPSR systems.

5.3.2 IT costs

IT costs include:

• Software maintenance in connection with the PPSR application, the dedicated cashmanagement system and associated IT equipment required to support the contactcentre. It is expected that software maintenance costs associated with the PPSR


application will be higher in the first year, when a higher level of minor enhancementswill be required as the system is bedded down;

• IT infrastructure support and maintenance. This will support on line access 24-hours aday, seven days per week, including the support of the internet gateway to the PPSR;and

• Disaster recovery for the PPSR application, to ensure maintenance of online access inthe event of a major adverse event.

5.3.3 External communications

Given the nature of the PPSR application and the need to ensure 24 hours per day access, anumber of data communications links will need to be established and maintained, betweenthe primary PPSR application, the contact centre, the disaster recovery site and otherproviders of data.

Telephone costs relate to the contact centre, and are based on an estimate of approximately800 000 incoming calls per year.

The PPSR will also access other databases and sources of data, including vehicleidentification numbers (VINs) and company information, e.g. Australian company numbers(ACNs), Australian registered body numbers (ARBNs), Australian business numbers (ABNs)and Australian registered scheme numbers (ARSNs).

5.3.4 Depreciation

To ensure that the PPSR functionality can be replaced when the application reaches the endof its useful life, depreciation is included in the cost base, comprising:

• Hardware. This includes PPSR hardware and equipment to be used in the contactcentre

• Software. This includes the development and implementation of the PPSRapplication, the purchase and integration of the software to be used in the contactcentre and the financial management application to facilitate on line and manualpayments; and

• Property fit outs. Additional accommodation will be required for the staff working inthe contact centre in Adelaide and the registry in Canberra. These costs are amortisedover the life of the associated leases.

5.3.5 General expenses

Forecast general expenditure includes:

• Property operating expenses. This covers the rent and other accommodation relatedexpenses for the contact centre in Adelaide and the registry in Canberra

• Public awareness. Although there is a significant public awareness campaign prior tothe commencement of the PPSR it is expected that there will be a continuing need to


publicise the PPSR during the first three years. The annual expenditure diminishes inyears two and three

• Mail and postage. It is estimated that approximately 20 per cent of incoming calls willresult in a mail out; and

• Merchant fees. This represents the fees paid on credit card transactions, based onforecast transaction volumes.

5.3.6 Corporate overheads

Operational responsibility for the PPSR will transfer to ITSA in May 2011. A proportion ofthe cost of ITSA’s corporate support areas is allocated to the cost base for recovery. Thisincludes:

• finance

• human resources

• legal services; and

• IT services and support.

Corporate overheads not integral to the provision of PPSR services are not included.

5.3.7 Repayment of Government funding

In the 2010-11 Budget, the Government provided supplementary funding of approximately$18 million to complete the establishment of the PPSR. The funding was provided on thebasis that it will be repaid over the first three years of operation of the PPSR.


5.4 Outline of Charging Structure

The proposed fees and charges are based on the estimate of costs and the current estimate ofactivity volumes. The fees will be reviewed within the first two years of operation oncedemand data has been captured.

5.4.1 Financial Forecast

The forecast revenue and expenditure for the first three years of operation of the PPSR is setout below.

Predicted Year 1 Year 2 Year 3Volumes $000s $000s $000s

RevenueRegistrations 988,000 13,488 13,488 13,488Amendments 194,000 1,021 1,021 1,021Searches 5,301,000 21,123 21,123 21,123Other 15,200 62 62 62Total Revenue 35,694 35,694 35,694Operating Expenses 29,317 28,466 29,142Repayment of GovernmentFunding 6,002 6,002 6,002Total Expenses 35,319 34,468 35,144Surplus 375 1,226 550

In year two, operating expenses are forecast to fall, predominantly due to a reduction insoftware maintenance costs, as the requirements in this area reduces. In year three, they areexpected to increase primarily due to increases in input costs and higher levels of softwaredepreciation due to ongoing investment in the PPSR application and contact centreoperations.


6 Summary of Charging Arrangements

Revenue

Ref no. Activity Volumes Proposed Fees Volumes Proposed Fees Year 1 Year 2 Year 31 REGISTER FINANCING STATEMENT

1.1 Register Financing Statement for an undefined duration. 18,430 $130.00 970 $144.80 $2,536,356 $2,536,356 $2,536,3561.2 Register Financing Statement where duration is 7 years or less. 827,660 $7.40 43,560 $22.20 $7,091,716 $7,091,716 $7,091,7161.3 Register Financing Statement where duration is more than 7 years but less than 25 years. 92,170 $37.00 4,850 $51.80 $3,661,520 $3,661,520 $3,661,5202 ATTACHMENTS` Attach a document with Financing Statement (per attachment). 46,080 $3.70 2,430 $11.60 $198,684 $198,684 $198,684

TOTAL REGISTRATIONS $13,488,276 $13,488,276 $13,488,2763 AMEND FINANCING STATEMENT

3.1Amend Financing Statement with an undefined duration (eg. additional grantor or additionof new type of collateral) 180 $130.00 10 $144.80 $24,848 $24,848 $24,848

3.2Amend Financing Statement where duration is 7 years or less (eg. extension of end date,additional grantor or addition of new type of collateral). 9,220 $7.40 490 $22.20 $79,106 $79,106 $79,106

3.3Amend Financing Statement where duration is more than 7 years but less than 25 years (eg.extension of end date, additional grantor or addition of new type of collateral). 7,380 $37.00 390 $51.80 $293,262 $293,262 $293,262

3.4Minor amendment to Financing Statement (where change of details does not impact on enddate, result in additional grantor, or add a new type of collateral) 163,400 $3.70 1,650 $11.60 $623,720 $623,720 $623,720

3.5Change the end time to a time that is earlier than the time that applied when the change wasmade 1,840 $0.00 100 $0.00 $0 $0 $0

3.6Remove grantor (where the registration has more than one grantor) from FinancingStatement 1,840 $0.00 100 $0.00 $0 $0 $0

3.7Amend details of secured party that does not involve an amendment ofABN/ACN/ARSN/ARBN 7,190 $0.00 380 $0.00 $0 $0 $0TOTAL AMENDMENTS $1,020,936 $1,020,936 $1,020,936

4 CANCEL FINANCING STATEMENT4.1 Cancel Financing Statement 819,180 $0.00 43,110 $0.00 $0 $0 $05 MANAGE SECURED PARTY GROUPS

5.1 Establish a Secured Party Group 4,610 $0.00 240 $0.00 $0 $0 $0

5.2Transfer all registrations to another Secured Party Group (per 1,000 transferred registrationsor part thereof) 490 $3.70 n/a n/a $1,813 $1,813 $1,813

Online Contact Centre


Revenue

Ref no. Activity Volumes Proposed Fees Volumes Proposed Fees Year 1 Year 2 Year 36 SEARCHES

6.1 Search the register by reference to the grantor's details (note 1). 764,920 $3.70 19,610 $11.60 $3,057,680 $3,057,680 $3,057,6806.2 Search the register by serial number (note 1). 2,067,350 $3.70 53,010 $11.60 $8,264,111 $8,264,111 $8,264,1116.3 Search the register by registration number (note 1). 2,325,760 $3.70 59,630 $11.60 $9,297,020 $9,297,020 $9,297,0206.4 Undertake an ordinal search 5,040 $3.70 270 $11.60 $21,780 $21,780 $21,7806.5 Undertake a point in time search - n/a 5,300 $11.60 $61,480 $61,480 $61,4807 SEARCH RESULTS

7.1 Issue certificate or pdf of search results 265,040 $0.00 - n/a $0 $0 $07.2 Reissue certificate or pdf of search results 25,180 $3.70 1,330 $11.60 $108,594 $108,594 $108,5947.3 Issue search results in hard copy form. - $29.50 5,300 $29.50 $156,350 $156,350 $156,3507.4 Issue search results in electronic media (DVD). - $29.50 5,300 $29.50 $156,350 $156,350 $156,350

TOTAL SEARCHES $21,123,365 $21,123,365 $21,123,3658 REPORTS

8.1Issue copy of a verification statement (excluding SPG change in address) including certificateof registration 9,220 $3.70 490 $11.60 $39,798 $39,798 $39,798

8.2 Issue copy of a verification statement for SPG changes in address 50 $3.70 - $11.60 $185 $185 $1858.3 Develop a special purpose report for account holders ($ per hour) n/a n/a 100 $200.00 $20,000 $20,000 $20,000

TOTAL COST RECOVERY $35,694,373 $35,694,373 $35,694,373

Online Contact Centre

Note 1: Searches through the contact centre by phone for items 6.1, 6.2 and 6.3 will be charged at the same price as an online search. Searchesthrough the contact centre by mail, email or fax, will attract the higher fee.

Note 2: The above fees are exclusive of GST. A request will be made for inclusion of the fees on the Division 81 Determination listing so thatthey will be GST free.


7 Ongoing Monitoring, Periodic Review and StakeholderConsultation

7.1 Ongoing Monitoring

ITSA will continue to monitor the cost recovery arrangements on a regular basis by comparingcosts incurred (and the subsequent fees charges) with the estimated costs to be incurred and willpublish the information in its Annual Report and Portfolio Budget Statement.

7.2 Periodic Review

It is proposed that the fees are reviewed every two years.

ITSA also reviews its bankruptcy fees and charges every two years. Accordingly it is proposed thatthe first review of PPSR fees is undertaken concurrently with the next scheduled review ofbankruptcy fees. The most recent review occurred during June 2010, with resultant changes to feesand charges occurring on 1 July 2010. On this basis the proposed PPSR fees will be reviewedduring June 2012.

Given that these periodic reviews may result in the introduction of new fees, withdrawal of fees onparticular activities, or changes in the level of fees, ITSA will be formally involving stakeholders inthis periodic review process.

7.3 Stakeholder Consultation

In finalising this CRIS the Attorney-General's Department will have consulted extensively with allgroups potentially affected by the outcome of the review. Stakeholder consultation will haveincluded the following:

• provision of a draft indicative CRIS to the Department of Finance and Deregulation in June2010

• dissemination of the draft indicative CRIS to stakeholders via face to face meetings andpresentations in July and August 2010

• consideration of all written submission and verbal feedback; and

• provision of a second draft indicative CRIS, identifying possible changes to fees and charges asa result of written submissions and feedback received.


8 Certification

I certify that this CRIS complies with the Australian Government Cost Recovery Guidelines.

...................................................

Roger Wilkins AO

Secretary

Attorney-General’s Department

Date.......................2010


9 Cost Recovery Links

• The Australian Government Cost recovery Guidelines and the accompanying Finance Circularcan be found at:

http://www.finance.gov.au/financial-framework/financial-management-policy-guidance/cost-recovery.html

• For proposals that involve regulation or amendment to regulation that affects business, aRegulation Impact Statement is required. Contact the Office of Best Practice regulation forfurther information:

http://www.finance.gov.au/obpr/index.html

Consultation Draft Cost Recovery Arrangements · PPSR Consultation Draft Cost Recovery Arrangements...

Documents

Transcript of Consultation Draft Cost Recovery Arrangements · PPSR Consultation Draft Cost Recovery Arrangements...