1 February 2015
Greens Treasury Spokesperson Justin Field has blasted the NSW Government’s plan to privatise the state’s land titles office, the LPI, saying the sale would short change NSW taxpayers and is financially reckless.
The claim follows confirmation the NSW Government is failing to ensure potential windfall profits of a likely buyer could be clawed back by NSW taxpayers. In response to a Question on Notice from the Greens concerning possible profit sharing, the Government admitted that the state would be seek only an upfront, one-off, payment for the right to run the service. Reports today in Fairfax Media on a leaked Government Expression of Interest (EOI) paper, co-authored by investment bank JP Morgan, reveals the massive profit expectations the Government is signalling to potential buyers. The document described the LPI as the "largest and most active land registry in Australia" and the "single source of truth" that provides "essential, monopoly services." Claw-back or profit sharing arrangements would ensure the taxpayer has a share in the future profits made by a private operator, to ensure long-term value for money on the sale of a public asset. A similar proposal to privatise the UK Land Registry, which was subsequently abandoned by the UK Government last year due to public opposition, recommended ‘gain sharing’ arrangements be considered.
Mr. Field said, “The Greens don’t support selling this world class asset, but the public would be even more furious to know it is being so shortchanged in the sale.
“The Government’s plan represents a one-off “sugar hit” but that would undermine the true value of this asset to the people of NSW as a safe and secure property transfer service.
“It’s impossible to calculate today what sort of new and adapted services will be possible through the digital transformation of the LPI and the sorts of profits a private operator could make using the public’s data. While the LPI should be kept in public hands, if the Government insists on a sale, a profit-sharing arrangement should be included to ensure the public gets a fair price.
“This failure highlights the problem of legislation being fast-tracked through the Parliament without proper scrutiny and consultation as we have seen with the LPI sale legislation.
“The idea that the Government would sell an “essential, monopoly service” and not guarantee taxpayer value for money would not be supported by the NSW public and raises real concerns about the coalition financial management.
“The EOI document also revealed for the first time a 2015-16 profit of $130 million which is expected to grow markedly with significant population growth over the 35 years of the transaction. The current market speculation of $2billion for the sale equates to $57million a year of the 35 years, a substantial discount on profit projections and a slap in the face to NSW taxpayers.
“Right now this sale is opposed by organisations as diverse as the NSW Police Association, ICAC, the journalist union, MEAA, the Law Council and Law Society, the Real Estate Institute, the Royal Australian Historical Society, and surveyors. Given the extent of opposition to the sale and serious concerns raised by other stakeholders, this question about value for money adds weight to the argument for the sale to be halted.
“The change of leadership within the Government, including changes with the finance and treasury portfolios, offers an opportunity to reconsider this sale which is clearly not in the public interest.