The Berejiklian government has announced it will lease the state’s 150-year-old land titles registry to Hastings Funds Management and First State Super, after accepting their bid of $2.6 billion.
Premier Gladys Berejiklian, flanked by Treasurer Dominic Perrottet, said the 35-year concession of Land and Property Information (LPI) would lead to better customer service and a “massive” infrastructure boost.
Why the Land Titles Registry matters
In September 2016, the NSW government passed legislation enabling the lease of NSW’s “world-class” land titles registry. Here’s why that’s a big deal.
“This consortia brings to the table more efficient practices and better outcomes for customers … and not only will the integrity of the title system be maintained but it will be actually enhanced by new provisions,” she said.
The government endured months of criticism from peak bodies such as the Law Council of Australia, Law Society of NSW, Real Estate Institute of NSW and Institution of Surveyors, who questioned why it would privatise an efficient and reliable asset that generated $130 million profit a year.
Opposition Leader Luke Foley said NSW got a dud deal because the LPI monopoly could generate $2.6 billion in profit in 20 years, which could help pay for schools and hospitals.
“There’s a long-term loss to the state here … because we won’t have that annual revenue stream; it will be removed for a one-off injection paying for stadiums,” he said.
Of the proceeds, $1 billion will be spent on upgrading Parramatta and ANZ stadiums and refurbishing Allianz Stadium, and $1.6 billion will be deposited into Restart NSW fund. About a third will be spent in regional areas.
The government has entered into a binding agreement with Australian Registry Investments (ARI), which is 80 per cent owned by Australian investors (including Hastings and First State) and 20 per cent by RBS Pension Trustee in London.
NSW Premier Gladys Berejiklian and Treasurer Dominic Perrottet announcing that Hastings and First State have won the right to run LPI. Photo: Jessica Hromas
The Hastings-First State consortium beat three rival bidders: Macquarie’s Macquarie Infrastructure and Real Assets (MIRA) with Link Group, Canadian infrastructure giant Borealis with Computershare, and The Carlyle Group.
Fairfax Media revealed The Carlyle Group had set up entities to potentially house LPI that were ultimately owned by a company in the Cayman Islands.
Protesters in front of NSW Parliament House demonstrating against the NSW government’s privatisation of the Land Titles Registry. Photo: Kate Geraghty
Hastings and First State have now gained the “first mover advantage” and are in pole position to grab other land titles registries across Australia.
It is advised by Advara, a partially privatised subsidiary of the Western Australian government, that harbours strong ambitions to roll out its “next-generation, scalable, cloud-based, land registry platform”.
South Australia is in the midst of selling off its registry. However, the Labor-run Victorian, Queensland and Northern Territory governments have told Fairfax Media they have no plans to follow suit.
The NSW government said there would be no need for title insurance as titles would continue to be guaranteed, price rises for regulated products would be capped at CPI, and the Registrar General would have stronger powers.
“Combined with the tight regulatory framework we have established, the investment, innovation and experience ARI will bring mean citizens can expect a better experience,” Mr Perrottet said.
Ms Berejiklian said the government consulted with and appreciated working with stakeholders, and their concerns had been “laid to rest”.
The Law Society continues to oppose the privatisation, saying there was a lack of consultation and transparency.
John Cunningham, president of the REINSW, said he was disappointed that a “sacrosanct” asset was now in private hands and rejected suggestions their concerns were addressed.
“They didn’t, that’s why … all other property-related bodies were opposed to it, they felt they weren’t listened to,” he said.
Michael Green, president of the Institution of Surveyors, said it was not consulted.
“Right from the very start [early 2016], in our meetings with Treasury officials, we were told what was happening and there was no room for discussion,” he said.
Andrew Day, chief executive of Hastings, said it recognised the critical role LPI plays in supporting the proper functioning of the real estate market.
“We have a shared focus on maintaining data security and reliability, and investing in new and innovative ways to provide land titling and registry services,” he said.
The government said there were safeguards, including step-in and termination rights if something goes wrong.
Security of title will remain unchanged as the government will continue to guarantee title and operate the Torrens Assurance Fund, which compensates landowners who suffer a loss due to fraud or error on the register.
The transition to the new operator is expected to be finalised over the coming months.
The Hastings-First State consortium has received approval from Commonwealth regulators including the Australian Taxation Office, the Australian Competition and Consumer Commission and the Foreign Investment Review Board.
Mitchel Hanlon, a surveyor and president of the Tamworth branch of the NSW Liberal Party, said he believed the government had underpriced LPI and questioned his party membership.
Labor, the Greens, and the Shooters Fishers and Farmers parties all voted against the legislation enabling the transaction. It went through last September with the vote of Christian Democrats leader Fred Nile.
A spokesperson for Greens MP Justin Field said: “The Greens oppose the land titles sale and will watch closely to make sure its private owners meet the requirements of the concession legislation.”
The Public Service Association said the lease was “the most appalling fire sale decision”.
The Concerned Titles Group, consisting of title, surveying and legal experts, said those who value their financial security and personal data should be worried.
“[It] will no longer be maintained and managed locally in NSW hands, but let out to entities potentially outside our jurisdiction, to manage for their own financial advantage, not ours,” it said.
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