On 10 August 2017, the former Labor government privatised the Lands Title Office in a deal which saw the Land Services SA Consortium (LSSA), a consortium made up of Macquarie Infrastructure & Real Assets (MIRA) and the Public Sector Pension Investment Board (PSP Investments) pay $1.605 billion to be the exclusive provider of land transaction and property valuation services for the State for 40 years.
However what was not disclosed was a secret deal that LSSA paid $80 million as part of the $1.605 billion to the State to be granted an exclusive right to negotiate for the further privatisation of Other State Registry functions such as the Motor Vehicles Registry currently managed by DPTI and any other registry managed by the State. This deceit is clearly demonstrated by the press release from former Treasurer Tom Koutsantonis on 10 August 2017 which only indicated ‘The Government will receive $1.605 billion in an upfront payment which includes certain optionality for the Life of the Contract’. There was no reference at all to the possible privatisation of the Motor Vehicle Registry.
In return for the $80 million, the State is contractually obligated to use “reasonable endeavours” to undertake necessary preparatory work to make a decision on whether or not to commence a formal process to privatise the management of the Motor Vehicle Registry. The State is required to complete this task by 12 October 2020.
This secret deal will now require the Government to undertake a scoping study for the privatisation of the Motor Vehicle Registry.
I am advised that the following functions are likely to be required to be included in the scoping study:
- Software and hardware required to manage TRUMPS;
- Direct technical support staff and back office support;
- Customer service delivery, including:
- Processing registration and licensing transactions;
- Handling customer enquiries;
- Inspecting vehicles and conducting identity assessments;
- Conducting driver licence tests;
- Delivering the Rider-Safe training program; and
- Delivering personal/customised plates (Ezyplates)
Further, if the State proposes to privatise the management of any Other State Registry during the 40 year term of the LSSA agreement, LSSA has an exclusive right to negotiate with the State to be appointed as the service provider in relation to that Registry. The State and LSSA must then reasonably endeavour to enter into binding contractual agreements.
Mr President, I am further advised that if the State and LSSA do not enter a privatisation agreement for the Motor Vehicle Registry by 12 October 2020 or the State appoints a third party to manage the Motor Vehicle Registry before this date then the State must elect to either repay LSSA the $80 million, including interest charges at 10 per cent per annum, or grant LSSA an additional 7 year extension to the existing 40 year term of the Land Services Agreement.
Therefore the total repayment in 2020 under this secret deal if the Government doesn’t proceed with the privatisation could be up to $104 million.
The government will seek further commercial and legal advice regarding the States’ options associated with this contract and the actions it must undertake to fulfil the obligation committed to, but not disclosed, by the previous Labor government in this secret deal. It is now in the public interest and also for transparency and accountability that former Ministers Tom Koutsantonis and Stephen Mullighan reveal publicly why they kept this deal secret.
The Marshall Government makes no criticism of LSSA in relation to this deal.
Mr President, the Marshall Liberal Government will now pursue what is in the best interests of the South Australian taxpayer and I will return to this place and update the Parliament at an appropriate time.