The Hon. Rob Lucas MLC

The Hon

Rob Lucas MLC


Media Releases

Libs say NO to Labor’s secret privatisation plan for Motor Vehicle Registry

Saturday, 21 December 2019

The Marshall Liberal Government has announced it will not be privatising the Motor Vehicle Registry (MVR), formally rejecting a secret deal done by the former Labor government in its $1.6 billion Lands Titles Office privatisation.

Treasurer Rob Lucas said Labor had been ‘deliberately devious and deceitful’ over its privatisation plans for the MVR, going to enormous lengths to keep the secret deal hidden from the South Australian public.

In fact, the deal only came to light upon the change of government, when the Government was provided with the contract and advised by Treasury of the terms of the secret deal.

“It’s crystal clear that if Labor had been re-elected they were going to sell-off the Motor Vehicle Registry, which actually constitutes 97% of all the work of Service SA centres,’’ said Mr Lucas.

“They didn’t want the public to know about it and Mr Koutsantonis and his Cabinet colleagues – including Mr Malinauskas and Mr Mullighan - went to enormous lengths to keep it hidden.

  “Labor were deliberately devious and deceitful, and we are finally putting this whole saga to bed.”

Mr Koutsantonis’ secret deal included a clause which saw the Land Services SA consortium pay $80m to be granted an exclusive right to negotiate for the further privatisation of other state registry functions, such as the MVR.

As a result, the new Government had been contractually obliged to undertake the necessary preparatory work to consider the privatisation of the MVR. The Government has conducted a commercial scoping study which was undertaken by advisors Investec Australia Limited and PricewaterhouseCoopers.

In total, $2.4m has been spent on the entire evaluation process which was legally required under the deal.

“While we make no criticism of LSSA in relation to this deal, it’s been a costly exercise that’s entirely due to Labor’s gross deceit.

“The Government has decided not to proceed with the privatisation for a number of reasons, including the extraordinary complexity of the deal including privacy issues as legal advice confirmed that TRUMPS (Transport Regulation User Management and Processing System) was ‘in scope’ for the privatisation.

“In addition, whilst there was a significant initial reduction in net debt, there was an increasing negative impact on the budget’s net operating balance due to the loss of revenue from the MVR.”

Under the deal, if the state and LSSA did not enter a privatisation agreement for the MVR by 12 October, 2020, or the state appointed a third party to manage the MVR before this date, then the state must elect to either repay LSSA the $80 million, including interest charges at 10% per annum, or grant LSSA an additional seven year extension to the existing 40-year term of the Land Services Agreement.

Only someone like Mr Koutsantonis would have agreed to something as crazy as paying a 10% p.a interest rate on the $80m payment.

“The total repayment under Mr Koutsantonis’ crazy 10% annual interest regime would have been up to $104m by next year, which would have been a massive hit to the Budget.

“This is a further indication that Mr Koutsantonis was definitely going to privatise the MVR as he would not have wanted to pay out such a ridiculous sum.”

The Government has instead opted to extend the current term of the LSSA by seven years to 2064. 

“However, in our view, we believe it’s almost impossible to estimate accurately the value of a seven year extension in 40 years’ time. Going back 40 years to 1979, it would have been impossible to estimate that the value of the LTO contract in 2019 would have been $1.6b.

“Similarly, it is impossible to predict the value of a 7-year extension to this contract in the period 2050-2060.”


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