Privatisation

<html><body>
<img src="https://counter.theconversation.edu.au/content/73850/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The privatisation of urban infrastructure in Australia is an ironic story.
The vehicles of urban infrastructure – the utilities and the state-owned enterprises – were so central to the life of cities that they became perfect entities for private sell-off.
We now live with the consequences of the sell-off.
The utilities flourished in Australia as a nation-building exercise following the second world war. The Bretton Woods agreement entrenched Keynesian fiscal behaviours across the Western world. 
The utilities thrived on the willingness of governments to raise capital for public works. They were also central to the development of state capacity and the assembly of a career-based professional public service. As part of the social compact, the public accepted reasonable user pricing for the availability of water, energy, public transport and telecommunications services.
Hence, the utilities and the state-owned enterprises led the roll-out of urban infrastructure in the second half of the 20th century. This roll-out shaped the nature of Australian urban life, its format and flows.
But then fiscal crisis of the state descended in the 1970s and 1980s. The sell-off of public assets was seen worldwide as a solution to state indebtedness. Arguments that private enterprise could deliver infrastructure services more efficiently added impetus. 
<h2>A wholesale transformation</h2>
Few governments resisted the sell-off urge. Australian governments, state and federal, participated in the sell-off, though in a stuttering manner. Through time, however, the change has been substantial.
Abbott and Cohen calculate that the output of state-owned enterprises in Australia in 1989-90 accounted for 7 percent of GDP, 9 percent of total employment, and 14 percent of gross fixed capital expenditure. 
By 2011-12, the output of state-owned enterprises had fallen to 1.3 percent of GDP. Their gross fixed capital expenditure contributed only 1.8 percent of the nation’s total. The authors estimate that proceeds from privatisations in Australia since 1987 total around A$194 billion (in constant year 2000 dollars).
The sell-off commercialised and privatised a raft of assets: electricity generation and transmission, gas distribution, airports, ports and telecommunication. New assets went straight to private hands: motorways, public transport, renewable energy generation, and freight handling.
The shedding of public responsibility for infrastructure meant public investment in Australia as a share of GDP fell from more than 5 percent in the mid-1980s to well below 3 percent by the end of the 1990s.
<h2>What’s in it for investors?</h2>
There is much to understand about the sell-off. Here I focus only on why private investors are willing to pay extraordinary prices to acquire urban infrastructure assets.
The attraction of investing in an urban infrastructure asset comes from the infrastructure services being embedded in the daily flows of people, water, energy and information throughout a city. The flows of a city are remarkably ordered in terms of volume, direction and timing. 
How a city operates is dependent on the co-existence of decisions by infrastructure operators and users. The operators decide how and when services will be available. Households and firms decide what they will be doing across a 24-hour day and therefore how and when they will use the infrastructure services on offer.
Thus, the efficiency of infrastructure provision comes from the predictability of the flows of a city. These in turn come from a historical patterning and sequencing of behaviours by householders and firms as they read off and conform to each other’s movements.
An example is the relatively sympathetic structuring and sequencing of work hours and school hours. This ensures that public transport facilities are utilised more efficiently in peak hours, while the hours that parents and children spend together are made more convenient.
The embeddedness of infrastructure into city life means that revenue streams from user fees for infrastructure services are highly predictable and stable. And because transport, water and energy supply is usually monopolised, the householder has little choice but to continue as a consumer of an infrastructure service.
The books of a utility or state-owned enterprise, then, represent a discrete set of households well trained to pay their monthly bills. This is precisely the type of revenue stream that pension, insurance and sovereign wealth funds seek when faced with the peculiar problem of having surplus cash to lock away for at least the next two decades.
<h2>What did we lose in the sell-off?</h2>
Perhaps it was clever to have solved a government debt problem in Australia back in the day through a sell-off of assets to a new class of long-term investor. But as a consequence we have lost other things. 
Infrastructure as a planning tool to shape our cities is one. Revenue streams to subsidise needy customers or supply to remote locations is another.
And, critically, we have lost the opportunity for the state to revamp energy, water and transport systems to allow for innovative supply and demand formats – such as distributed electricity supply networks – that are more appropriate to a climate-threatened planet.
Long-term privatisation contracts, most of them closed to scrutiny, lock urban infrastructure provision into 20th-century formats.
The difficult task now will be their unlocking.
Phillip O'Neill is director, Centre for Western Sydney, Western Sydney University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/phillip-oneill-125643" target="_blank">here</a>.
</body></html>

jchancellor-FAypfDUnLy

Stumbling into the future: living with the legacy of the great infrastructure sell-off

<html><body>
<img src="https://counter.theconversation.edu.au/content/79997/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Concerns about the privatisation of public housing estates should not blind us to the benefits of the transfer of public housing to the not-for-profit community housing sector.
The Victorian government’s recently released housing strategy allows for the transfer of the state’s public housing stock to the community housing sector. In a recent Conversation article, Kate Shaw raises an important question – “Why should the state wriggle out of public housing?” – and condemns the transfer of public housing to private developers for redevelopment.
However, if one is really interested in providing more housing for people on low to moderate incomes, the community sector is the way to go – not public housing.
Criticism of community housing provision – in part because of its role in the UK’s liberal market reforms to public housing – neglects the reality. Community housing has underpinned the growth and viability of what many would see as some of the fairest and best-performing social housing systems in the world — those of Sweden, Denmark and the Netherlands.
Management and/or ownership of land (including state land) by not-for-profit community groups ensures affordability in perpetuity. It is not lost to the private sector. And it can provide the same security as public housing, but with more innovative management practices, such as co-operatives and housing trusts.
<h2>Not-for-profits serve a range of needs</h2>
Importantly, in the Australian context, the not-for-profit sector offers a range of housing options pitched at different household needs. These include rental housing for households on low and moderate incomes and affordable home ownership.
One reason for this flexibility is that, unlike government instrumentalities, Australian community sector providers can borrow against their assets. In the appropriate financial environment (as exists in the aforementioned social democratic countries), they can then grow their asset base to meet a broad range of housing needs.
And it does appear we are slowly moving toward such a financial environment. In its budget in May, the federal government announced the creation of a National Housing and Finance Corporation (NHFC) to offer community housing agencies access to lower-cost loans. While cheaper loans are not the full financial answer (there is still a substantial yield gap between rents and loan costs), the government has established an expert panel to look at this and report back later this year.
On top of these developments, the recent Productivity Commission draft report on human services, including social housing, recommends growth of the sector including an increase in Commonwealth rent assistance. This is vital for community housing viability.
International trends aligned with the direction of policy reform in Australia suggest the not-for-profit community sector is the future for social housing growth. And this could be done in a way that addresses Shaw’s other concern — the privatisation of public land.
On this, I agree with her. Losing valuable, well-located land to the private sector creates an enormous opportunity cost; once sold it will never be available for future use.
And all we might get out of it is a 10% increase (a few thousand units) in social housing stock. But merely to keep social housing stock at the current 3.5% of all housing (the lowest in Australia) we need at least an additional 31,000 in Victoria by 2031.
<a href="https://www.propertyobserver.com.au/images/2017/07/05/expert%206%20july.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/07/05/expert%206%20july.jpg" width="700" height="655">
<h2>Making up for decades of neglect</h2>
We do have to acknowledge that decades of underinvestment in Victoria’s public housing has left a legacy of housing estates that have gone well beyond repair and maintenance. And, given their low density, these estates are not achieving their potential in terms of either number or quality of dwellings.
In this context, the fact that the state government has set aside $185 million for its Public Housing Renewal Program is to be welcomed.
Some argue that the less-than-ideal result of a public-private partnership renewal of the old Carlton estate demonstrates that mixing public and private housing is problematic.
But what if it was a mix of public and community-managed rental and ownership housing instead?
The community sector can act in the same role as a private developer (with the state not expecting as big a financial reward), renewing the site with a mix of affordable properties for sale.
Unlike conventional private ownership, these would be covenant-protected to ensure, as with equivalent models in the US, that home ownership remains affordable. While privately owned, the properties remain within the affordable housing stock. A community housing association manages their sale and resale.
Also, the rental housing could be a mix of public and community housing. The focus would be on both high-need deep-subsidy households and moderate-income low-subsidy households. Such transformed estates would be genuinely integrated mixed communities, rather than an uneasy balance of high-need public housing at one end and high-end private housing at the other.
Across Australia, many community housing organisations have demonstrated their ability to deliver successful public housing renewal projects with a mix of households and tenure types. They have done so in an integrated and cohesive way, with privately owned units underpinning the financial viability of the projects.
Transfer of stock to the community sector is an important and valuable process of substantial community benefit, both in its own right and as part of a considered process of estate renewal.
Shaw is right. We need much more social housing, and relying on the private sector to drive the process will have an enormous opportunity cost. This will very likely constrain the capacity for future growth and affordability.
But the leaves in the tea cup suggest that the bulk of future growth should be in the not-for-profit sector. The sector can grasp the opportunities offered by policy reform in a way the public sector cannot, and provide sustained affordability and security.
Terry Burke is a Professor of Housing Studies at Centre for Urban Transitions, Swinburne University of Technology and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/terry-burke-1268" target="_blank">here</a>.
</body></html>

Community sector offers a solid platform for fair social housing: Terry Burke

<html><body>
Infrastructure fund manager Hastings Funds Management and pension fund First State Super have signed a $2.6 billion deal to operate NSW's land titles and registry business.
For some reason the initial forecast had been around $1 billion when a 10-year lease-sale agreement was proposed to help generate the $1bn needed to upgrade Sydney’s sport stadiums..
It comes after then NSW Government then asked private operators to bid for a 35-year contract to run the state's Land and Property Information unit, and its titling and registry business. 
The government announced it will lease the state's 150-year-old land titles registry to Hastings Funds Management and First State Super, after accepting a bid from the consortium.
It's understood Hastings and First State Super saw off three rival bids to sign the deal overnight. The consortium is 80 per cent Australian owned, with the remaining 20 per cent held by RBS Pension Trustee in London.
NSW premier Gladys Berejiklian and treasurer Dominic Perrottet scheduled an announcement for 12.30pm today. Treasurer Perrottet said "$2.6 billion is a phenomenal result for this state".
NSW's LPI is the largest land title registry in the country with 885 employees at the end of the 2016 financial year.
It registered 935,000 documents in the 12-month period. 
The asset manager, which is backed by Westpac Banking Corp, has more than $10 billion in assets under management and owns stakes in the like of NSW electricity transmission company TransGrid, Perth Airport, the Port of Newcastle and Sydney Desalination Plant. 
The Hastings group was advised by RBC Capital Markets and law firm Allens. 
JPMorgan ran the auction for NSW. 
Macquarie's MIRA, which has teamed up with ASX-listed Link and Canada's PSP Investments, was ranked the favourite by The Australian Financial Review.
Surveyors have been calling on the Baird Government to reverse its decision to sell-off the New South Wales land title service.
The privatisation of Land and Property Information is expected to raise a billion dollars for the state’s coffers, but it’s claimed the biggest price may be paid by homeowners.
</body></html>

j.ballantyne1990-6AQqhLzZaK

Hastings Fund Management win NSW LPI tender

<html><body>
GUEST OBSERVER
Long-term privatisation contracts, most of them closed to scrutiny, lock urban infrastructure into 20th-century formats unsuited for a climate-threatened planet.
The privatisation of urban infrastructure in Australia is an ironic story. The vehicles of urban infrastructure – the utilities and the state-owned enterprises – were so central to the life of cities that they became perfect entities for private sell-off. We now live with the consequences of the sell-off.
The utilities flourished in Australia as a nation-building exercise following the second world war. The Bretton Woods agreements entrenched Keynesian fiscal behaviours across the Western world.
The utilities thrived on the willingness of governments to raise capital for public works. They were also central to the development of state capacity and the assembly of a career-based professional public service. As part of the social compact, the public accepted reasonable user pricing for the availability of water, energy, public transport and telecommunications services.
Hence, the utilities and the state-owned enterprises led the roll-out of urban infrastructure in the second half of the 20th century. This roll-out shaped the nature of Australian urban life, its format and flows.
But then fiscal crisis of the state descended in the 1970s and 1980s. The sell-off of public assets was seen worldwide as a solution to state indebtedness. Arguments that private enterprise could deliver infrastructure services more efficiently added impetus.
A wholesale transformation
Few governments resisted the sell-off urge. Australian governments, state and federal, participated in the sell-off, though in a stuttering manner. Through time, however, the change has been substantial.
Abbott and Cohen calculate that the output of state-owned enterprises in Australia in 1989-90 accounted for 7% of GDP, 9% of total employment, and 14% of gross fixed capital expenditure.
By 2011-12, the output of state-owned enterprises had fallen to 1.3% of GDP. Their gross fixed capital expenditure contributed only 1.8% of the nation’s total. The authors estimate that proceeds from privatisations in Australia since 1987 total around A$194 billion (in constant year 2000 dollars).
The sell-off commercialised and privatised a raft of assets: electricity generation and transmission, gas distribution, airports, ports and telecommunication. New assets went straight to private hands: motorways, public transport, renewable energy generation, and freight handling.
The shedding of public responsibility for infrastructure meant public investment in Australia as a share of GDP fell from more than 5% in the mid-1980s to well below 3 percent by the end of the 1990s.
What’s in it for investors?
There is much to understand about the sell-off. Here I focus only on why private investors are willing to pay extraordinary prices to acquire urban infrastructure assets.
The attraction of investing in an urban infrastructure asset comes from the infrastructure services being embedded in the daily flows of people, water, energy and information throughout a city. The flows of a city are remarkably ordered in terms of volume, direction and timing.
How a city operates is dependent on the co-existence of decisions by infrastructure operators and users. The operators decide how and when services will be available. Households and firms decide what they will be doing across a 24-hour day and therefore how and when they will use the infrastructure services on offer.
Thus, the efficiency of infrastructure provision comes from the predictability of the flows of a city. These in turn come from a historical patterning and sequencing of behaviours by householders and firms as they read off and conform to each other’s movements.
An example is the relatively sympathetic structuring and sequencing of work hours and school hours. This ensures that public transport facilities are utilised more efficiently in peak hours, while the hours that parents and children spend together are made more convenient.
The embeddedness of infrastructure into city life means that revenue streams from user fees for infrastructure services are highly predictable and stable. And because transport, water and energy supply is usually monopolised, the householder has little choice but to continue as a consumer of an infrastructure service.
The books of a utility or state-owned enterprise, then, represent a discrete set of households well trained to pay their monthly bills. This is precisely the type of revenue stream that pension, insurance and sovereign wealth funds seek when faced with the peculiar problem of having surplus cash to lock away for at least the next two decades.
What did we lose in the sell-off?
Perhaps it was clever to have solved a government debt problem in Australia back in the day through a sell-off of assets to a new class of long-term investor. But as a consequence we have lost other things.
Infrastructure as a planning tool to shape our cities is one. Revenue streams to subsidise needy customers or supply to remote locations is another.
And, critically, we have lost the opportunity for the state to revamp energy, water and transport systems to allow for innovative supply and demand formats – such as distributed electricity supply networks – that are more appropriate to a climate-threatened planet.
Long-term privatisation contracts, most of them closed to scrutiny, lock urban infrastructure provision into 20th-century formats.
The difficult task now will be their unlocking.
 
Phillip O'Neill is Director of the Centre for Western Sydney at Western Sydney University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/phillip-oneill-125643" target="_blank">here</a>.
</body></html>

Living with the legacy of the great infrastructure sell-off: Phillip O'Neill

<html><body>
GUEST OBSERVER
The NSW Liberal-National Coalition government has just passed new laws to sell the state’s Land Registry to private interests.
Prosper is bitterly opposed to this sale and has spoken out against it repeatedly.
This is a core government function: “Each state and territory has a central register of all land in the state which shows the owner of the land. The land title is the official record.”
Land holding in Australia is a legally enforceable contract between individuals and government – usually described as The Crown to emphasise its ultimate sovereignty. Holders commit to use the land, to pay taxes due and submit to the authority of the elected government.
Accurately registering who owns which parcel of land matters – for individual financial protection, and for counter-parties like banks lending against the asset. Making titles more risky will impose staggering costs on the victims of fraud and misappropriation – and the banks.
Under Australia’s globally-admired Torrens Title system, government guarantees title against fraud and abuse without limitation. This will no longer apply if the register is sold to the highest bidder and privately provided. Consider the legal argy-bargy that will be certain to arise over any recording error by the private provider.
We are not the only opponents of this sell-off.
The UK recently offered its poor tax system as an excuse to attempt a similar selloff. UK land valuers obliged the conservative government to withdraw the idea, pointing out it would allow a private entity to adjudicate on the conflicting interests of sellers, buyers, lenders and neighbours.
What if the neo-conservatives actually wanted to hide who owns the land? As it is in the Scotland where despite strenuous efforts that began with the Registration Act of 1617 and accompanying Register of Sasines, the owners of only 26% of the land in Scotland have ever been identified. Ever.
Consider the implications of unrecorded title. It would exempt owners from public scrutiny, land tax, capital gains tax and the many pesky land use rules lesser mortals are subject to.
The risks and costs of, say, adverse possession pale in comparison to the profound personal benefits such a change would deliver to wealthy landholders able to hire some bovver boys to defend their interests.
The first baby step would be to de-nationalise the land registry – to put wealthy landowners on the road to the creation of allodial title.
David Collyer is campaign manager at Prosper Australia and can be contacted <a href="https://www.prosper.org.au" target="_blank">here</a>.
</body></html>

Why the privatisation of the NSW land registry should be opposed: Prosper's David Collyer

<html><body>
<img src="https://counter.theconversation.edu.au/content/65714/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The Australian government is planning to privatise the management of the Australian Securities and Investments Commission database of companies. This is a potentially damaging move which goes against the government’s own open data policy.
On behalf of the Australian government, ASIC currently charges businesses and individuals around A$50 million each year for company searches. The information covers everything from details of shareholders and company officers (A$19 per document) and their roles and relationships with other bodies, to financial reports and records of charges over company assets (A$38 per document).
It is undoubtedly a great money-spinner to charge members of the public more than A$1 per page for a downloaded pdf document. However, the original legislative purpose of making information about companies publicly available was surely not so that the Australian government could profit from selling that information. Indeed, there is no public policy or economic rationale for the charges.
I am yet to meet an economist who argues that levying costs on public information about companies helps markets operate more efficiently. What we’re actually doing is segregating the market into those who can afford public information about companies and those who cannot.
The movement of company data from public to private hands is likely to entrench the charges for public information about companies. The corporate database is likely to be treated as nothing more than a cash cow.
Inevitably the focus will be on how to fatten the cow. The question asked will not be should we make [so much] money from public information, but how can we make more? The adverse economic consequences and lost productivity benefits that flow from costly public data will not enter the calculations.
<h2>Malcolm Turnbull has supported open data</h2>
In March 2014 Malcolm Turnbull, then communications minister, made the following salient comments:
"To be frank with you, I think it is really regrettable that ASIC’s data is behind a paywall.
I have to say as a matter of principle, I don’t think the government should be charging the public for data.
Obviously these are tough and troubled times from a budgetary point of view – and there will be all sorts of contractual issues – but really, the productivity benefits from making data freely available are so much greater than whatever revenues you can generate from them.
Our goal is … wherever possible to make that data accessible and free."
Our prime minister’s reported comments are consistent with the Australian government’s own 2015 Public Data Policy. This commits to optimising the use and reuse of public data, releasing non-sensitive data as open by default, and collaborating with the private and research sectors to extend the value of public data for the benefit of the Australian public.
I know many accounting academics who wish to conduct research to inform public policy using the financial reports on ASIC’s database. They are prevented from doing so because they do not have a spare A$50,000 lying around to buy the data.
<h2>Better corporate and tax regulation</h2>
Academics are not the only ones who would benefit from making ASIC’s public data freely available. It would also help individuals to scrutinise corporate affairs and, in doing so, make valuable contributions to the Australian regulatory authorities. This is the Jerry Maguire principle of public administration: help me, help you.
In carrying out its regulatory functions, ASIC relies heavily on complaints and reports of corporate misconduct received from individuals. Let’s do a cause and effect analysis here: the higher the charges for corporate information, the lower the scrutiny of corporate affairs by individuals, the fewer complaints made to ASIC, the weaker and more untimely corporate regulation.
The 2014 Senate inquiry report into the performance of ASIC must have had such an analysis in mind when it recommended that ASIC charges be brought into line with other jurisdictions. Searching for public information about companies is free in New Zealand and the United Kingdom.
The 2010 Senate inquiry report into insolvency practitioners is archetypal of the public policy problem. This committee found overwhelming evidence of bad and illegal practices in the insolvency industry. These practices thrived while there was low scrutiny and costly and missing financial information. ASIC was unaware of the nature and extent of what was going on.
Similar to ASIC, the Australian Taxation Office (ATO) relies on individuals to inform it of taxation misconduct by corporations. The same cause and effect analysis for complaints made to ASIC applies.
In carrying out its functions, the ATO is effectively hamstrung if individuals are unable to freely scrutinise the financial affairs of corporations and make timely complaints or reports. The heaving lifting of scrutiny and accountability in taxation falls on the few and the public purse is worse off because of it.
The 2015 Senate inquiry into corporate tax avoidance was remarkable not so much for the outlandish evidence of aggressive tax avoidance, but the incredulous expressions of senators in the Sydney hearing room as the evidence emerged. It was almost possible to read their thoughts: how could it be that we, the elected representatives of the people, could have missed this disgraceful state of tax affairs and for so long?
The answer, of course, is that there was a lack of timely genuine scrutiny by the public. It finally fell to investigative journalists such as Michael West (then of Fairfax) to blow the whistle after acquiring the financial reports of various multinational companies.
<h2>Cutting red tape for small business</h2>
Small businesses – often described as the engine room of the Australian economy – could also benefit from freely available company data. Small businesses and contractors should be able to educate themselves about the affairs of their corporate customers without having to pay the government for the privilege.
Unsecured creditors should be able to view the charges held against a company’s assets by secured creditors so they too can make informed decisions.
Employees and their representatives should likewise be able to freely access public information about corporate employers. Employees have an active and ongoing economic interest in a company, not least because of the employee benefits they accumulate such as annual leave, long service leave and superannuation contributions.
It is inefficient for the Australian government to levy charges that discourage timely regular scrutiny of large companies by employees. The social costs can be high when a company fails. Uninformed employees are likely to suffer shock and dislocation. Meanwhile the government often incurs the cost of paying out accumulated employee benefits.
<h2>In the public interest</h2>
Keeping public information about companies locked up behind paywalls and maintained by private interests is not in the public interest.
Free public information about companies in public hands will contribute to higher transparency, better governance and accountability, and less secrecy, incompetence, fraud and corruption. If the ASIC corporate database is sold, the opposite effects are virtually certain.
Jeffrey Knapp is lecturer/Accounting, UNSW Australia and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/jeffrey-knapp-128623" target="_blank">here</a>.
</body></html>

Property 101: ASIC company data should be open and free – even Malcolm Turnbull agrees

<html><body>
<img src="https://counter.theconversation.edu.au/content/60099/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The New South Wales government is set to privatise its land-titling services. This decision may provide the impetus for other states and territories in Australia to go down the same path.
But what are the implications of privatising the operation of title offices for the Australian public?
<h2>What are title offices and why do they matter?</h2>
Title offices maintain a registry that defines the ownership and boundaries of private and public properties and keeps records of changes to the properties as they happen.
Details of various changes affecting the land – such as mortgages, restrictions, leases and rights of way – are also recorded in the registry.
So, if you are about to commit hundreds of thousands of dollars to buy a property, you or your solicitor need to search the registry and make sure the seller is not a pretend owner, and the dimensions of the property are the same as what the registry says.
Similarly, if you want to subdivide your backyard to sell or build a new dwelling, it is necessary to look into the registry about what you can and can’t do in your backyard.
Australians may do business with a title office only a couple of times in their lives, but they do provide services to many people every day. For example, in NSW, about 900,000 land dealings (like transfers of title or mortgage discharges) were lodged and almost 53,000 new titles registered in the 2014-15 financial year.
Australia’s stable and reliable property market is a key contributor to the country’s economy. From buying and selling to financing property, title offices underpin billions of dollars of economic activity every year. The robust titling systems in Australia’s states and territories are one of the reasons the country was among the least affected by the global financial crisis.
Australia’s system is a simplified land registration method that guarantees the ownership of a property if it is recorded in the title office. Although there is always room for improvement, this system of registration is one of the best and most efficient in the world.
In Victoria, if you have all the necessary documentation you could transfer the ownership of property in 24 hours. Many countries around the world – including the US – cannot even dream of such efficiency.
<h2>But what might privatisation lead to?</h2>
Uncharted territory
Title offices usually do not cost the government; they generate revenue through the provision of land-related services and selling land and property information.
But, if privatising title offices is being done with the aim of improving its performance, does any provider in Australia already have a better service in place to do the job more efficiently than it is being done now?
Impact on individuals
Apart from the economic significance of land and property, arguably a property could be the most valuable asset an average person could own in their life.
Although the announcement emphasises that the government will continue guaranteeing titles, the for-profit philosophy of privatisation can lay the groundwork for the private sector to negotiate more profitable alternatives such as the insurance-based titling system that operates in the US. So this may well be the starting point of moving away from guaranteeing Australian land titles.
Impact on the public
Land information that is created in the process of titling is accurate, assured and authoritative.
When you subdivide the backyard of your million-dollar property, a new title is to be created. In this process, a licensed surveyor prepares a plan, which is lodged and registered with the title office. Before being registered, the title office staff examine the plan to ensure the ownership boundaries on the plan correspond with the boundaries as marked on the ground.
Land information generated and maintained in title offices has a documented and legally valid audit trail. This is not only key to the property market and land development, but is critical to many public services such as infrastructure engineering, emergency management, or disaster responses. Any compromise on the private sector’s part will have significant consequences, which could go beyond the properties we own.
Privatisation has its advantages. But Australia’s title offices may not necessarily be the right government businesses to be privatised.
Mohsen Kalantari is senior lecturer in Geomatics, University of Melbourne and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/mohsen-kalantari-173337" target="_blank">here</a>.
</body></html>

What are the implications of privatising land title offices?

<html><body>
Recent plans the privatise a number of Australian ports have become very messy. In Victoria both sides of government were committed to privatising the Port of Melbourne Corporation (PoMC), intending to use the proceeds to remove a number of level crossings throughout the state and enabling it to qualify for the Treasurer Joe Hockey’s 15% recycling assets contribution scheme.
But the Opposition has now said it will oppose Labor’s legislation, which authorises the transfer of port assets to a new lease holder for 50 years, and refer it to a select committee inquiry in the Upper House, supported by the Greens. The move potentially leaves a multi-billion dollar hole in the state budget.
In an attempt to increase the sale price, the PoMC has served a rent review notice to one of the major lease holders in the port, container stevedore DP World, allegedly asking for an increase in excess of 700%. This caused a howl of protests amongst other lease holders such as QUBE Logistics, Patrick Terminals and Logistics (a division of Asciano) as well as other stakeholders in the supply chain such as Shipping Australia, Maersk Line, Mediterranean Shipping Company and numerous importer and exporters.
Even chairman of the Australian Consumer and Competition Council (ACCC) Rod Sims, an old foe of the stevedores who has accused them of running a cosy duopoly, put his hat in the ring by suggesting that oversight of port pricing might be necessary. An independent valuer has been appointed to review the proposed rent increase.
The Tasmanian government which relies heavily on the port of Melbourne for its flow of import, has struck a deal with Victoria to would protect Tasmanian port users from planned fee rises, after complaining to both the Federal and Victorian governments.
Price hike would undermine its competitiveness in local and global markets, especially since in April the state received an extra $200 million to extend freight subsidies to northbound goods from the Federal government.
Encouraged by comments from the ACCC chairman, one of the stakeholders in the Port of Newcastle in NSW, multinational Glencore, has applied to the National Competition Council to force ACCC oversight of pricing in the port. The Port of Newcastle was recently privatised under a 98 year lease. In January this year the port pushed access prices up by an average of 40%.
The Darwin Port Corporation has also been slated for privatisation with the Northern Territory government recently releasing the sale/long term lease documents to the market. In an apparent attempt to increase its sale price, the Corporation announced in December 2014 very significant increases in port fees, which include a new fee of $2,000 per ship call, an increase of 15% to daily berth rates, and a 30% increase in wharfage rates, much to the ire of John Lines, managing director of ANL Container Line, a major customer of the port. LINK?
The Western Australia government, whose revenue stream has been severely hit by the slowdown in the mining industry, announced in its recent budget that the Port of Fremantle has put out the “For Sale” sign in an attempt to raise additional funds. There is no word yet from Fremantle Ports on potential price increases, but watch this space.
Utah Point, an iron ore port facility in Port Hedland in the far north of Western Australia, which was also earmarked to be sold, has recently become less attractive due to the fact that the mining companies which ship iron ore through the port, and make up 90% of its revenue, are struggling amid a sustained low in global iron ore prices.
Overall, it’s a messy picture which, combined with plans in a number of states to open additional ports within the next 15 to 20 years, will make it hard for sellers and bidders to determine a fair price for these attractive infrastructure assets, under what conditions a competing port may be established, and whether compensation should be paid to incumbents.
Sadly all this political posturing could result in importers and exporters paying higher prices for the use of port facilities and could leave taxpayers footing the bill for potential compensation payments.
Peter van Duyn is Maritime Logistics Expert, Institute for Supply Chain and Logistics at Victoria University. He can be contacted <a href="https://www.vu.edu.au/contact-us/peter-van-duyn" target="_blank">here</a>.
</body></html>

Privatisation

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Privatisation

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News