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Lucas ponders Service SA sell-off as valuers brought in

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EXCLUSIVE | The Marshall Government will decide by the end of the year whether to privatise Service SA centres across the state, under a prospective sell-off of the Motor Vehicle Registry.

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Treasurer Rob Lucas revealed last year the incoming Liberal Government had been locked in to initiating a scoping study for the privatisation of the state’s Motor Vehicle Registry, under a “secret deal” done by Labor when it sold off the Lands Titles Office for $1.6 billion in 2017.

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

The Labor deal included a separate $80 million contract giving exclusive rights to negotiate for the further privatisation of “other state registry functions such as the Motor Vehicles Registry” to the buyer of the state’s property titles registry Land Services SA – a consortium comprised of Macquarie Infrastructure & Real Assets and the Public Sector Pension Investment Board.

Lucas revealed today he has been required under the terms of the contract to appoint advisors to seek a “confidential and non-binding” indication of the value of the Motor Vehicle Registry – which constitutes “97 per cent of all the work of Service SA centres”.

The Treasurer has already announced in his 2018 budget the closures of three highly-patronised Service SA centres – in Modbury, Prospect and Mitcham – as part of a broader revamp of its customer service operations.

Those closures have remained in limbo ever since, with Lucas telling InDaily today the uncertainty over the fate of the Motor Vehicles Registry was “holding up reform options in relation to Service SA”.

“When I first saw discovered this last year I knew it was linked to Service SA, but I didn’t appreciate that it’s basically everything – that the registry is 97 per cent of the functions of Service SA centres,” he said.

Asked if this was contemplated in his budget measure to close Modbury, Prospect and Mitcham, he said: “I can’t speak for the Transport bureaucrats, but I didn’t understand that 97 per cent of the work of the Motor Vehicles Registry was done through Service SA.”

Asked if that meant Service SA would be privatised as part of any deal to sell the registry, he said: “It’s highly likely, because it’s 97 per cent of the work.”

“I’m not sure how you would distinguish the two,” he said.

“They would [still] be doing the government service, but it would be operated and managed by the private sector.”

He said the decision wouldn’t be purely financial, insisting “we’re obviously interested in the level of service that’s going to be provided to the community”.

“There are complicated data sharing arrangements that would need to be considered by the Government before we make any decision,” he said.

The Government has appointed Market Engagement Advisor – a KPMG and Investec Australia Limited consortium – to advise on a valuation “as part of contractual obligations and potential due diligence process”.

This followed the completion of a commercial scoping study into the potential privatisation of the Motor Vehicle Registry undertaken by advisors Investec Australia Limited and PricewaterhouseCoopers.

But Lucas insists he’s locked into the process by Labor’s “secret deal”.

“This is just the next step in a costly exercise that’s entirely due to Labor’s gross deception and deceit,’’ he said.

Under the deal, if the Government doesn’t sell the Motor Vehicle Registry to the consortium or a third-party manager by 12 October, 2020, it must repay the $80 million plus interest or hand Land Services SA an additional seven year extension to its existing 40-year contract.

“We’re now required to follow through and make a decision,” Lucas told InDaily.

“This is all of Labor’s making – we didn’t commit to it or contemplate it, we discovered it after the election.

“We have to go through a process to either say yes or no to privatising the motor vehicle registry… and if we don’t, we repay $105 million or give them a free kick for seven years.

“The contract says we’ve got to go through the process, so we’re going through the process… we’ll have a final decision by the end of the year.”

He wouldn’t rule out any sell-off, but said: “Clearly the former government were quite intent on privatising it.”

“Otherwise they wouldn’t have included it as a secret provision in the Land Titles Office deal,” he said.

“That was going to be their next privatisation.”

But Opposition Treasury spokesman Stephen Mullighan said there was “no obligation” for the Government to privatise the registry – or Service SA – under the contract Labor put in place.

“It obviously makes the most financial sense for the Government to pocket the $80 million and just extend the contract for seven years,” he said.

He disputed that Service SA was inextricably linked to the registry sell-off, saying: “These are shopfronts populated by public servants to conduct transactions on behalf of the government.”

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