NSW is a land baron’s best friend

A September report from the Australian National Audit Office (ANAO) slammed the Department of Infrastructure for purchasing land from a billionaire family at 10 times its market value in what it calls a “significant and unusual transaction” related to the Western Sydney Airport.

Auditor-General Grant Hehir then told a Senate hearing that the federal government may have been defrauded in the Western Sydney airport land deal. The land known as the Leppington Triangle was purchased by the Department of Infrastructure for $29.8 million in 2018, but a report by the ANAO found that the department had written off 90% of the purchase price within 12 months.

The Australian Federal Police also announced an investigation into the transaction with a view to determining possible criminal offences in regard to issues raised in the ANAO’s report.

Now another dodgy NSW land deal has arisen with the state’s Auditor-General investigating a land purchase by the Transport Department. It paid $53.5 million for the six-hectare site in May 2016, less than a year after its previous owners had bought the site for $38.15 million. The Department paid three times more for the land than it was officially valued at, while it will have to spend around $50 million on preventing toxic chemicals from leaching out of the site:

The major land deal is under scrutiny after the NSW Government paid three times its value in an urgent “out of session” meeting.

The cost of the land and remediation of the contaminated site is estimated to cost taxpayers more than $100 million.

A NSW property developer, Billbergia, bought the land at 6 Grand Avenue, Camellia, 13 days before the Government announced its multi-billion-dollar Parramatta Light Rail project on December 8, 2015.

The polluted site would become critical to the new project as the main depot and stabling yard for the trams.

Billbergia bought the land for $38 million then flipped it months later to Transport for NSW for $53.5 million, with a proviso that the department paid for the remediation of the toxic site. At the time the land, excluding the cost of remediation, was valued by the NSW Valuer General at $15.5 million.

It would give Billbergia, which is owned by brothers John and Bill Kinsella, a $15.5 million windfall gain, excluding stamp duty and other costs.

A joint investigation by 7.30 and The Sydney Morning Herald into the Government’s purchase of the highly contaminated land can reveal it came after an urgent “out of session” meeting of senior government officials, which resulted in the reversal of earlier plans to get the landowner to pay to remediate the site or seek compulsory acquisition of the property.

With a compulsory acquisition hanging over Billbergia, both parties agreed to a negotiated sale.

The committee that approved the purchase was chaired by Transport for NSW’s then-secretary, Tim Reardon, who has since gone on to become the state’s top public servant, running the Department of Premier and Cabinet under Gladys Berejiklian.

The deal has sparked calls for a referral to the Independent Commission Against Corruption (ICAC).

“Without a doubt, this should be referred to ICAC,” former NSW auditor-general Tony Harris said.

He said the haste of the deal and the amount needed to be investigated so that any appearance of corruption could be ruled out.

“Everyone talks about the Leppington Triangle and the maybe $30 million worth of loss. Here we’ve got easily $100 million worth of loss,” he said.

This has ‘Game of Mates’ written all over it, with taxpayers fleeced as land barons make out like bandits.

Unconventional Economist

Comments are hidden for Membership Subscribers only.