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					 Personal Property Securities Program


Consultation Draft Cost Recovery
                   Arrangements
PPSR                                                  Consultation Draft Cost Recovery Arrangements




Purpose of this consultation
The purpose of this Cost Recovery Impact Statement (CRIS) is to review and make
recommendations for the cost recovery arrangements for the Personal Property Securities
Register (PPSR) in line with the Australian Cost Recovery Guidelines and to facilitate
appropriate stakeholder consultation.

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

Making a submission
The Attorney-General’s Department (AGD) is inviting written submissions on the proposed
fees and charges and issues raised in the CRIS.

Submissions should include the name of your organisation (or your name if the submission is
made as an individual), contact details for the submission, including an email address and
contact 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 pps@ag.gov.au.

Comments / submissions may also be mailed to:

       Personal Property Securities Branch
       Attorney-General’s Department
       3-5 National Circuit
       BARTON ACT 2600

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

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

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

Enquiries
Enquiries should be directed via email to pps@ag.gov.au.

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Contents
1      Personal Property Securities Register ................................................................................ 4
    1.1 Purpose ........................................................................................................................ 4
    1.2 Personal Property Securities Reform .......................................................................... 4
    1.3 Personal Property Securities Register ......................................................................... 4
    1.4 Operational Responsibility .......................................................................................... 5
2      Australian Cost Recovery Policy ....................................................................................... 6
    2.1 What is Cost Recovery? .............................................................................................. 6
    2.2 Why have Cost Recovery? .......................................................................................... 6
    2.3 Principles underpinning Cost Recovery Arrangements .............................................. 7
3      Application of Principles underpinning PPSR Cost Recovery .......................................... 9
    3.1 Cost Recovery Principles ............................................................................................ 9
    3.2 Economic Efficiency ................................................................................................... 9
    3.3 Design Principles....................................................................................................... 10
    3.4 Operating Principles .................................................................................................. 11
4      Design and Implementation ............................................................................................. 12
    4.1 Basis for Charging..................................................................................................... 12
    4.2 What are the Legal Requirements for the Imposition of Charges? ........................... 12
5      Costs to be included in Charges ....................................................................................... 13
    5.1 PPSR Services and Activities.................................................................................... 13
    5.2 Forecast Demand Levels ........................................................................................... 13
    5.3 Costs .......................................................................................................................... 14
    5.4 Outline of Charging Structure ................................................................................... 18
6      Summary of Charging Arrangements .............................................................................. 19
7      Ongoing Monitoring, Periodic Review and Stakeholder Consultation ........................... 21
    7.1 Ongoing Monitoring.................................................................................................. 21
    7.2 Periodic Review ........................................................................................................ 21
    7.3 Stakeholder Consultation .......................................................................................... 21
8      Certification ..................................................................................................................... 22
9      Cost Recovery Links ........................................................................................................ 23




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1 Personal Property Securities Register
1.1 Purpose
The purpose of this Cost Recovery Impact Statement is to review and make recommendations
for the cost recovery arrangements for the Personal Property Securities Register (PPSR) in
line with the Australian Cost Recovery Guidelines and facilitate appropriate stakeholder
consultation.

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

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

The Commonwealth Government’s PPS reform introduced a single Commonwealth Act, the
Personal Property Securities Act 2009, which provides rules for the creation, extinguishment
and enforcement of security interests in personal property and for determining priority among
competing security interests. The Act has been supported by the creation of a single national
electronic 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 notice
board of personal property interests.

Personal property is any form of property other than land or buildings and fixtures which are
legally 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 and
contract 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 other
       related interests; and

      facilitate the resolution of priority disputes.

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


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

The PPSR will be computer based, publicly accessible and updatable in real time. The PPSR
will 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 and
phone.

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




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2 Australian Cost Recovery Policy
In December 2002, the Australian Government adopted a formal cost recovery policy to
improve the consistency, transparency and accountability of Commonwealth cost recovery
arrangements and to promote the efficient allocation of resources. The underlying principle of
the policy is that entities should set charges to recover all the costs of products or services
where it is efficient and effective to do so, where the beneficiaries are a narrow and
identifiable group and where charging is consistent with Australian Government policy
objectives. Cost recovery policy is administered by the Department of Finance and
Deregulation and outlined in the Australian Cost Recovery Guidelines (Cost Recovery
Guidelines).

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 are
ultimately responsible for ensuring entities’ implementation and compliance with the Cost
Recovery Guidelines.

As a significant arrangement the PPSR cost recovery arrangements need to document
compliance 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. Australian
Government 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 cost
recovery revenues. The direct link or ‘earmarking’ between the revenue and the funding of a
specific activity distinguishes such cost recovery from general taxation.

General taxation, on the other hand, is a compulsory extraction of money by a public
authority 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 products
and services are produced and consumed.

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




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PPSR                                                    Consultation Draft Cost Recovery Arrangements



2.3 Principles underpinning Cost Recovery Arrangements
The Australian Cost Recovery Guidelines require that cost recovery arrangements be
assessed against cost recovery principles contained in the Guidelines. These principles can be
broadly 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 important
means of improving economic efficiency, by:

      sending an important pricing message to users or customers about the costs of resources
       involved

      reducing the call on general taxation revenue and avoiding the high efficiency losses
       from higher taxation revenue

      improving horizontal equity by ensuring that consumers or beneficiaries of products
       pay 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 government
       activities, and

      incorporate an appropriate level of industry consultation to help drive agency
       efficiency.

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 of
       activities or products


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      costs to be recovered should relate to specific activities, not the agency that provides
       them

      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 are
       not 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 activity
and should avoid:

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

      gold plating, where unnecessarily high standards or facilities are adopted or there is
       simply over-regulation; and

      cost padding, where costs are artificially inflated in the knowledge that all costs can be
       recovered.




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3 Application of Principles underpinning PPSR Cost
  Recovery
The proposed PPSR cost recovery arrangements for the PPSR will comply with the
Government’s Cost Recovery Guidelines and will be consistent with the key principles that
underpin 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 interests
currently administered by Commonwealth, State and Territory agencies.

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

An efficient and appropriately funded national personal properties registration system will
also increase competition and improve access to finance, notably for small business, where
they 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 recovery
principles will be applied to the PPSR. In the 2010-11 Budget, the Government announced an
additional $18 million in 2010-11, which will require the cost recovery operations to be
increased by $6 million per year over three years from 2011-12 to offset the additional
funding.

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

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

3.2 Economic Efficiency
Cost recovery of the operation of the PPSR is considered to be economically efficient for the
following reasons:

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


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

      cost recovery of the PPSR will reduce general taxation and ensure that it is
       appropriately funded and can operate on a sustainable basis, free of additional
       government funding

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

      through appropriate consultation processes, including ongoing monitoring of the cost
       recovery 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. The
proposed cost recovery arrangements incorporate the following design and operating
principles, 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 single
       PPSR supports the establishment of a clear set of rules for ordering priority between
       competing parties in secured property;

      Borrowers - Greater certainty about whether an item of property is subject to a
       security interest should increase the availability of finance and reduce borrowing costs
       for borrowers.

      Vendors - Vendors will be beneficiaries of the PPSR. Increased certainty for lenders
       and increased access to finance for borrowers is expected to benefit vendors through
       increased 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 a
separate and distinct group who can be identified when they access the PPSR, either directly
online 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 recovered
in full based on those costs and estimated demand. They will not include agency costs that
are not integral to the services provided, particularly activities that can be regarded as
services to government.

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



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3.3.3 Public Administration
The PPSR operations will comprise a business function within ITSA and will be subject to its
existing public administration principles.

3.3.4 Industry consultation
AGD and ITSA will publish the CRIS on their websites. In addition, regular stakeholder fora
will 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 accordance
with 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 Personal
Property Securities Act 2009 and proposed Regulations. The fees will be set by a legislative
instrument.

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 been
structured so that users pay an equitable share of the costs and reflect the higher cost of
accessing the PPSR through the contact centre, with the exception of basic searches
undertaken by phone. These will attract the same fee as an equivalent online search to ensure
individuals 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 related
activities or other government activities that are not related to the operation of the PPSR are
not included.

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




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4 Design and Implementation
Charges can be collected in a variety of ways and based on different measures of costs. They
should 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 policy
       objectives 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 as
they 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 to
the cost of individual activities. They may also place less direct pressure on the agency to
improve efficiency. Where possible, charge for activities will be made directly through fees.

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

Cost recovery via a fixed fee for service is considered to be the recommended basis for
charging users who access the register. The main benefit of this is that there is a direct link
between 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 (the
Attorney-General) may, by legislative instrument, determine fees for registration and search
services. The details of the charges will be set out in the legislative instrument which will
allow the Registrar to fully recover the costs of PPSR services.




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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 extended
business 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 is
not integral, or directly related, to the provision of PPSR services. Although there will be a
small policy unit within the Attorney-General’s Department, which will provide advice to
Government, 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 the
state and territory jurisdictions and the Australian Securities and Investment Commission.



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


ACTIVITIES                                    Annual Volumes

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



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

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

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

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

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




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

Depreciation
Hardware                                             1,056         1,057           1,056
Software                                             5,872         5,988           6,098
Property fit outs                                      524           524             524
Total                                               7,452         7,569           7,678

General Expenses
Property operating expenses                           641           661             680
Public awareness                                      281           116             119
Mail                                                  124           127             129
Merchant fees                                          43            43              43
Other general expenses                                150           156             162
Total                                               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 appropriate
allowances for on-costs.

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

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

       Registry. 17 FTEs will provide registry services, PPSR operations management and
        support services; and

       IT Support. 6.5 FTEs will provide additional IT support, including IT support for the
        contact centre, registry and dedicated PPSR systems.

5.3.2 IT costs
IT costs include:

       Software maintenance in connection with the PPSR application, the dedicated cash
        management system and associated IT equipment required to support the contact
        centre. It is expected that software maintenance costs associated with the PPSR



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

      IT infrastructure support and maintenance. This will support on line access 24-hours a
       day, 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 in
       the 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, a
number of data communications links will need to be established and maintained, between
the primary PPSR application, the contact centre, the disaster recovery site and other
providers of data.

Telephone costs relate to the contact centre, and are based on an estimate of approximately
800 000 incoming calls per year.

The PPSR will also access other databases and sources of data, including vehicle
identification 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 end
of its useful life, depreciation is included in the cost base, comprising:

      Hardware. This includes PPSR hardware and equipment to be used in the contact
       centre

      Software. This includes the development and implementation of the PPSR
       application, the purchase and integration of the software to be used in the contact
       centre and the financial management application to facilitate on line and manual
       payments; and

      Property fit outs. Additional accommodation will be required for the staff working in
       the contact centre in Adelaide and the registry in Canberra. These costs are amortised
       over 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 related
       expenses for the contact centre in Adelaide and the registry in Canberra

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

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

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

      Merchant fees. This represents the fees paid on credit card transactions, based on
       forecast transaction volumes.

5.3.6 Corporate overheads
Operational responsibility for the PPSR will transfer to ITSA in May 2011. A proportion of
the cost of ITSA’s corporate support areas is allocated to the cost base for recovery. This
includes:

      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 the
basis that it will be repaid over the first three years of operation of the PPSR.




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5.4 Outline of Charging Structure
The proposed fees and charges are based on the estimate of costs and the current estimate of
activity volumes. The fees will be reviewed within the first two years of operation once
demand 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 set
out below.

                             Predicted         Year 1           Year 2         Year 3
                             Volumes           $000s            $000s          $000s
Revenue
Registrations                   988,000        13,488           13,488         13,488
Amendments                      194,000         1,021            1,021          1,021
Searches                      5,301,000        21,123           21,123         21,123
Other                            15,200            62               62             62
Total Revenue                                 35,694           35,694         35,694
Operating Expenses                            29,317           28,466         29,142
Repayment of Government
Funding                                         6,002            6,002          6,002
Total Expenses                                35,319           34,468         35,144
Surplus                                          375            1,226            550

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




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6 Summary of Charging Arrangements
                                                                                                                 Online                 Contact Centre                            Revenue


Ref no.   Activity                                                                                         Volumes    Proposed Fees   Volumes       Proposed Fees     Year 1        Year 2        Year 3
   1      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    $2,536,356
  1.2     Register Financing Statement where duration is 7 years or less.                                   827,660       $7.40          43,560        $22.20       $7,091,716    $7,091,716    $7,091,716
  1.3     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    $3,661,520
   2      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   $13,488,276
  3       AMEND FINANCING STATEMENT
          Amend Financing Statement with an undefined duration (eg. additional grantor or addition
  3.1     of new type of collateral)                                                                            180      $130.00              10       $144.80       $24,848       $24,848       $24,848
          Amend Financing Statement where duration is 7 years or less (eg. extension of end date,
  3.2     additional grantor or addition of new type of collateral).                                          9,220       $7.40               490      $22.20        $79,106       $79,106       $79,106
          Amend Financing Statement where duration is more than 7 years but less than 25 years (eg.
  3.3     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
          Minor amendment to Financing Statement (where change of details does not impact on end
  3.4     date, 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
          Change the end time to a time that is earlier than the time that applied when the change was
  3.5     made                                                                                                1,840       $0.00               100       $0.00           $0            $0            $0
          Remove grantor (where the registration has more than one grantor) from Financing
  3.6     Statement                                                                                           1,840       $0.00               100       $0.00           $0            $0            $0
          Amend details of secured party that does not involve an amendment of
  3.7     ABN/ACN/ARSN/ARBN                                                                                   7,190       $0.00               380       $0.00           $0            $0            $0
          TOTAL AMENDMENTS                                                                                                                                          $1,020,936    $1,020,936    $1,020,936
   4      CANCEL FINANCING STATEMENT
  4.1     Cancel Financing Statement                                                                        819,180       $0.00          43,110         $0.00           $0            $0            $0
   5      MANAGE SECURED PARTY GROUPS
  5.1     Establish a Secured Party Group                                                                     4,610       $0.00               240       $0.00           $0            $0            $0
          Transfer all registrations to another Secured Party Group (per 1,000 transferred registrations
  5.2     or part thereof)                                                                                      490       $3.70         n/a              n/a          $1,813        $1,813        $1,813




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PPSR                                                                             Consultation Draft Cost Recovery Arrangements


                                                                                                                   Online                 Contact Centre                          Revenue


 Ref no.   Activity                                                                                         Volumes     Proposed Fees   Volumes     Proposed Fees     Year 1        Year 2        Year 3
    6      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    $3,057,680
   6.2     Search the register by serial number (note 1).                                                   2,067,350       $3.70          53,010      $11.60       $8,264,111    $8,264,111    $8,264,111
   6.3     Search the register by registration number (note 1).                                             2,325,760       $3.70          59,630      $11.60       $9,297,020    $9,297,020    $9,297,020
   6.4     Undertake an ordinal search                                                                          5,040       $3.70             270      $11.60        $21,780       $21,780       $21,780
   6.5     Undertake a point in time search                                                                       -          n/a            5,300      $11.60        $61,480       $61,480       $61,480
    7      SEARCH RESULTS
   7.1     Issue certificate or pdf of search results                                                        265,040       $0.00              -         n/a              $0            $0            $0
   7.2     Reissue certificate or pdf of search results                                                       25,180       $3.70            1,330      $11.60        $108,594      $108,594      $108,594
   7.3     Issue search results in hard copy form.                                                               -         $29.50           5,300      $29.50        $156,350      $156,350      $156,350
   7.4     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   $21,123,365
   8       REPORTS
           Issue copy of a verification statement (excluding SPG change in address) including certificate
   8.1     of 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          $185
   8.3     Develop a special purpose report for account holders ($ 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


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. Searches
through 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 that
they will be GST free.




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PPSR                                                   Consultation Draft Cost Recovery Arrangements




7 Ongoing Monitoring, Periodic Review and Stakeholder
  Consultation
7.1    Ongoing Monitoring
ITSA will continue to monitor the cost recovery arrangements on a regular basis by comparing
costs incurred (and the subsequent fees charges) with the estimated costs to be incurred and will
publish 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 that
the first review of PPSR fees is undertaken concurrently with the next scheduled review of
bankruptcy fees. The most recent review occurred during June 2010, with resultant changes to fees
and charges occurring on 1 July 2010. On this basis the proposed PPSR fees will be reviewed
during June 2012.

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

7.3 Stakeholder Consultation
In finalising this CRIS the Attorney-General's Department will have consulted extensively with all
groups potentially affected by the outcome of the review. Stakeholder consultation will have
included the following:

     provision of a draft indicative CRIS to the Department of Finance and Deregulation in June
      2010

     dissemination of the draft indicative CRIS to stakeholders via face to face meetings and
      presentations 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 as
      a result of written submissions and feedback received.




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PPSR                                                  Consultation Draft Cost Recovery Arrangements




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




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PPSR                                                 Consultation Draft Cost Recovery Arrangements




9 Cost Recovery Links
   The Australian Government Cost recovery Guidelines and the accompanying Finance Circular
    can 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, a
    Regulation Impact Statement is required. Contact the Office of Best Practice regulation for
    further information:

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




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