The South Australian Government has announced that it will follow the New South Wales and Victorian Governments and privatise its land registry in a bid to raise a quick $500 million. From The AFR:
South Australian Treasurer Tom Koutsantonis is buoyed by the hefty $2.6 billion price paid for NSW’s land titles registry in April as the sale process for SA’s own land titles unit heads to its final stage, with the proceeds to partially offset a big state budget spend on infrastructure…
Mr Koutsantonis described the level of competition for the land titles asset as fierce, and promised there would be safeguards around data security and delivery requirements to protect the public interest and the integrity of the system. He wouldn’t comment on price expectations.
The privatisation of the state’s lands titles office through a 40-year contract to run the operations which handle 200,000-plus property transactions a year is expected to fetch more than $500 million…
The NSW government in April this year announced a $2.6 billion deal for a 35-year lease of the Land and Property Information unit to Hastings Funds Management and First State Super. They are believed to be among the final bidders for the SA operations, against rivals including Computershare and a Macquarie Infrastructure entity.
The Law Society of South Australia and the Property Council have already voiced their opposition to the sale, claiming it risks compromising data security, eroding services, as well as increasing consumer costs:
“Despite this proposal representing one of the biggest government transactions in recent history and having huge implications for the state, there has been next to no public information from the government about the planned sale and its long-term impact,” said Law Society president Tony Rossi.
“The mechanism allowing the government to sell this essential service was activated by one line buried deep in last year’s budget bill.”
This sentiment was echoed by Philip Page, chair of the Law Society’s Property Committee.
“The government has yet to explain how it is in the public interest to outsource to a private operator, motivated by profit, a land title registration system that has operated efficiently and securely in SA for over 150 years,” Mr Page said.
“Property is the biggest asset most people will own. It is essential that the security, accuracy and privacy of land ownership information are not compromised.
“It is inevitable that the private operator will increase fees for unregulated services, and will develop ways of profiting from the sale of land data. There is also a risk that title insurance, which is currently not needed by SA landowners, will become necessary to protect assets”.
…both the Law Society and Property Council SA said they are in agreeance that if the government chooses not to divulge the terms of the private contract citing “commercial in confidence” reasons, then it should at least be open to review by the Auditor-General.
The Public Service Association (PSA) and Australian Institute of Conveyancers have also raised concern:
“We have real concerns when it’s privatised that that business and the information contained in the computer systems and the network may be compromised into the future,” [PSA general secretary Nev Kitchin said].
“Ultimately [that] could render what is known as the ‘indefeasibility of title’ at risk … that is the ownership of title to property whether you’re buying or selling”…
Australian Institute of Conveyancers SA branch president Tim O’Halloran called on the State Government to provide more detail to industry bodies and the public about those protections that remain “commercial in confidence”.
“We fail to see what the benefit is to the Government apart from a short-term cash injection,” he said.
Mr O’Halloran was also worried additional costs, including title insurance, would become mandatory when the titles service is run by a private company.
Similar concerns were raised against the sale of the New South Wales land titles business, which was sold without consultation and amid widespread protest from professional groups.
State land titles business are an essential government service and a profitable natural monopoly. To sell-off an asset of such vital importance requires not only a watertight case, but also a robust and transparent process.
Sadly, New South Wales, Victoria, and now South Australia have hastily committed to these sales to grab a quick financial windfall without giving adequate consideration of longer-term consequences. Accordingly, end-users are likely to be gouged by the new monopoly owners, while the state governments will lose a reliable income stream.
The sale of our land registries represents everything that is wrong with Australia’s privatisations.
