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Govt 'forced' to privatise motor registry - or pay back millions - under Labor deal

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UPDATED | The Marshall Government says it will be forced to undertake a scoping study for the privatisation of the state’s Motor Vehicle Registry and could be forced to repay more than $100 million to a multinational consortium because of a “secret deal” done by Labor when it sold off the Lands Titles Office.

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Treasurer Rob Lucas today alleged the former Weatherill government “concealed a secret deal to privatise the state’s Motor Vehicle Registry” when it last year announced the sale of the state’s property titles registry to Land Services SA – a consortium comprised of Macquarie Infrastructure & Real Assets and the Public Sector Pension Investment Board.

The deal would see access to more aggregated public data sold off to private enterprise, and potentially used for commercial purposes.

Lucas said the deal locked the government into a separate $80 million contract that would give the conglomeration exclusive rights to negotiate for the further privatisation of “other state registry functions such as the Motor Vehicles Registry”.

Lucas told InDaily that right could extend to “basically any other registry that the state has” including the Office of Consumer and Business Services – which includes the births, deaths and marriages registry.

However, the deal over the Motor Vehicles Registry has an additional sting.

“I’m advised that if the state and Land Services SA 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 seven-year extension to the existing 40 year term of the Land Services Agreement,” Lucas said.

“Therefore the total repayment in 2020 under this secret deal if the State Government doesn’t proceed with the privatisation could be up to $104 million.”

A media release from then-Treasurer Tom Koutsantonis in August last year announcing the Lands Titles Office sale said Land Services SA “has been appointed as the exclusive service provider for SA’s transactional land services” with the Government to receive $1.605 billion in an upfront payment “which includes certain optionality for the life of the contract”.

“The commercial details of the contract are confidential,” it continued.

The windfall from the sale was directly linked to Labor’s subsequent $690 million public education cash splash, gifting new infrastructure funding to 91 schools around the state.

Lucas said Labor had made “no reference at all to the possible privatisation of the Motor Vehicle Registry”.

“It is now in the public interest – and also for the sake of transparency and accountability – that former ministers Tom Koutsantonis and [then-Transport Minister] Stephen Mullighan reveal publicly why they kept this deal secret, and also reveal all details of this secret deal.”

Koutsantonis told reporters after Question Time the Lands Titles deal “was an excellent deal for SA” and accused Lucas of “trying to find an excuse to sell motor registration”.

However, he didn’t deny that the existing deal help facilitate just that.

“Mr Lucas knows full well he doesn’t need to go through with this deal – he can pocket the $80 million and just add seven years to the contract of the Lands Titles Office,” he said.

Lucas told InDaily the contract stipulated the government was “legally required to make ‘reasonable inquiries’” into the Motor Vehicles Registry sell-off, “so we can’t just say ‘no’”.

“Our advice is we need to do a scoping study… and make a decision,” he said.

Former Treasurer Tom Koutsantonis. Photo: AAP/Kelly Barnes

He said exclusive bidding rights for other registries caught up in the deal would not incur a penalty if the government chose not to proceed.

“The strict liability that we’ve got in terms of payment is in terms of Motor Vehicles Registry,” he said.

He said he didn’t know what such a sale would be worth if the Government did proceed with the deal.

“I’ve got no idea… until you do a scoping study, you wouldn’t know,” he said.

“It’s never been in my contemplation.”

Lucas insisted the Marshall Government “makes no criticism of Land Services SA in relation to this deal” but said “the Labor Party’s utter contempt for South Australians is on full display in this secret deal made prior to a state election”.

The Lands Titles Office sale was a point of contention for Labor, with the party’s state council overwhelmingly opposing the sale and the Public Service Association threatening to take the former government to court.

The union also raised concerns over the mysterious “shelf company” set up to run the LTO under the auspices of Land Services SA – Autumn Operating Company Pty Ltd – which, according to ASIC documents, was registered in March last year at Sydney’s Martin Place with one employee plus a board of directors.

Koutsantonis defended keeping the Motor Registry deal under wraps, saying “I said there was ‘optionality’ in the contract” and that the Motor Registry sale option was “irrelevant”.

“The reason I didn’t I didn’t add it [to his public announcement at the time] is we probably weren’t going to do it,” he told reporters.

“All we did was… instead of a 40 year contract, there’s a 47 year contract and we get an extra $80 million.”

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