Massive infrastructure boost or recipe for disaster?
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The only profitable part of the state’s Land and Property Information (LPI), the land titles registry, which currently makes about $130 million in net profit annually, was bought by Australian Registry Investments (ARI), a consortium made up of 80 per cent Australian institutional investors. Investors include First State Super, investment funds from Hastings Funds Management and a 20 per cent stake held by the Royal Bank of Scotland Group’s pension fund, also managed by Hastings. The winners beat off competition from three other consortiums: Borealis and Computershare; the Carlyle Group and Macquarie’s MIRA and Link Group. The NSW government called it a 'phenomenal result' for NSW. “Once again today's result has significantly exceeded expectations,” Ms Berejiklian said. “It means even more funding for the schools, hospitals, public transport and roads that people depend on every day.” The government will drop $1 billion of the sale proceeds on upgrading Parramatta and ANZ Stadiums and refurbishing Allianz Stadium, while the remaining $1.6 billion will be invested into other infrastructure projects under its Restart NSW fund, which often funds roads and public transport projects. The Premier has promised that at least 30 per cent of the total proceeds will be spent in regional NSW. But while the government has argued that selling the lease to operate the land titles registry to the private sector would spur ICT investment and speed up the system, scores of real estate agents, surveyors, lawyers, unions and community groups have slammed the sell-off and called it a disaster. They have argued that it will imperil the quality and reliability of the service, make it more expensive for ordinary people and push skilled staff out the door. Opposition to the sell-off spilled over into a public rally in Sydney’s CBD in March. Land titles defines the legal ownership and boundaries of land parcels and is integral to buying and selling property, as well as taking out and paying off mortgages, leasing and inheriting property. Despite the majority of people being blissfully unaware of the system until they need it, land titles underpins billions of dollars spent in the NSW economy and a $1.2 trillion real estate market. The Public Service Association (PSA) called it a 'a recipe for disaster for millions of property owners across NSW'. “It is hands down, the most appalling fire sale decision yet by a Government with a strong track record in that area”, said PSA General Secretary, Stewart Little. “The government trumpets its efforts on ‘life-changing projects’ but what could be more life changing for millions of people across NSW than to lose the security on their own property? “Just as the PSA feared all along, ultimately the personal property records of the people in NSW will be held offshore given a portion of the successful consortium is based in London.” But NSW Treasurer Dominic Perrottet defended the lease arrangement and said it had ‘rigorous legislative and contractual safeguards’ in place to ensure the continued security of property rights and data. He said any increases in price were capped at CPI for the entire length of the lease and the government would continue to guarantee title, with the Torrens Assurance Fund compensating landowners who lost out due to fraud or error on the register, as happens now. A new external regulator has been established – the Registrar General – to monitor ARI’s performance and resume control, if necessary. Mr Perrottet praised ARI and said the company had prepared ‘a technology roadmap’ as part of its bid, helped by Advara, the private company that runs Western Australia’s land titles service. He said Advara had introduced ‘world-leading titling and registry technology’ to WA and added that the Registrar General would review and approve any major changes to LPI’s IT system in NSW. “This is an industry on the cusp of huge technological advances, and today we have partnered with some of Australia’s most reputable investors who will make sure the people of NSW get the benefit of those advances,” Mr Perrottet said. “Combined with the tight regulatory framework we have established, the investment, innovation and experience ARI will bring mean citizens can expect a better experience.” He said the ARI consortium had received approval from Commonwealth regulators including the Australian Taxation Office, the Australian Competition and Consumer Commission and the Foreign Investment Review Board and the transition to the new operator was likely to be finalised over the coming months. LPI staff have a four-year job guarantee as they transition to the new operator. More to come. [post_title] => NSW land titles lease sold to consortium for $2.6 billion [post_excerpt] => Massive infrastructure boost or recipe for disaster? [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => land-titles-lease-sold-consortium-2-6-billion [to_ping] => [pinged] => [post_modified] => 2017-04-18 11:05:02 [post_modified_gmt] => 2017-04-18 01:05:02 [post_content_filtered] => [post_parent] => 0 [guid] => http://www.governmentnews.com.au/?p=26899 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 2 [filter] => raw )  => WP_Post Object ( [ID] => 26709 [post_author] => 659 [post_date] => 2017-03-31 11:06:38 [post_date_gmt] => 2017-03-31 00:06:38 [post_content] => Manchester city centre, UK. Three Australian cities will replicate a UK initiative designed to deliver economic growth, affordable housing and new infrastructure while devolve decisions away from federal government towards state and local government. City Deals is a UK initiative which began in 2012 with eight deals for cities outside London, including Manchester, Bristol, Liverpool and Leeds and covering a population of 12.7 million. They have now been introduced across 38 UK city-regions. Under City Deals, state government and local councils decide what needs to be done to lift economic growth locally and they set targets in areas such as jobs, affordable housing and emissions reduction. The deals also include the regional areas around cities. The scheme emphasises building infrastructure and aims to deliver long-term benefits, such as higher land values, bigger tax receipts, more jobs and increased productivity. In the UK, most contracts are for ten years and funding often comes from all three levels of government. Local councils’ contributions tend to be lower than that from the other tiers of government, around 10 to 20 per cent, and often includes contributions in kind, such as land transfers and council officers’ time. Prime Minister Malcolm Turnbull is known to be a fan of City Deals for Australia and he has committed to early deals for Townsville, Launceston and Western Sydney. The process for future deals will be announced later. The Launceston City Deal, signed in September last year, promises to support education, employment and investment and this will include a new university campus in the city centre; revitalising the historic CBD and a new National Institute for Forest Products Innovation Hub. Under the Launceston deal, $140 million comes from the federal government and $60 million from the Tasmanian government. The Western Sydney City Deal, which includes the local government areas of the Blue Mountains, Camden, Campbelltown, Fairfield, Hawkesbury, Liverpool, Penrith and Wollondilly, seems to have a pretty broad remit. It will focus on public transport, employment and investment (particularly youth and indigenous employment); more affordable housing by boosting supply and diversity; biodiversity and conservation and arts and culture. There is no mention of who is paying what under the Western Sydney deal, which is up on the Department of Premier and Cabinet’s website. To find out more about the UK experience and what it could mean for Australia, Government News caught up with Scottish urban economist and affordable housing specialist Professor Duncan MacLennan, who has been involved with the Glasgow City Deal. What City Deals can do But first, let’s start off with what City Deals could do for Australia. Prof MacLennan explains that cities are ‘core areas driving national productivity’ and he says City Deals have been valuable because they have placed infrastructure at the centre of city thinking and coherent investment strategies. While cities drive growth, the income and tax receipts from this goes mainly to state or federate government - there is a disproportionate flow back - while cities are stuck with the problems stemming from growth, like congestion, pollution and a shortage of affordable housing. Indeed, Prof MacLennan says there is some evidence to suggest that some skilled workers are fleeing cities, fed up with long commutes and expensive housing. City Deals attempt to reverse this situation by channelling some of the money back into city-regional areas. Prof MacLennan says: “In the absence of changing the fiscal system, it’s a reasonably appropriate mechanism for getting money where it needs to be. “The main benefit to City Deals is the new focus on infrastructure [that has] raised local capacity to deal with it and more coherent investment strategies.” What they the deals don’t do, he says, is lead to a better system of sub-national government because they are uneven in their impact. In the UK, the deals are not open to everyone and they have not been rolled out evenly. Since City Deals began, Prof MacLennan says that metropolitan authorities have strengthened their capacity to do big infrastructure planning and they have got much better at making the economic case for infrastructure investment. “Big City Deals now know much more about infrastructure planning and how to do it well than central government,” he says. “There is work being done that wasn’t being done three or four years’ ago.” This point was picked up in the UK National Audit Office’s (NAO) report on the first wave of eight City Deals, calling them a ‘catalyst to manage devolved funding and responsibilities’. The report also commended the deals for cutting through funding complexities and giving cities direct access to central government decision makers, which in turn helped them secure funding and support from other government departments. “This helped cities agree deals aligned to their ambitions and local priorities,” said the NAO’s report. But the process is not without its problems. Resources, as ever, have not been there to help cities build their capacity locally. Local government was expected to pool its resources and given no funding to support additional management capacity. This can lead to skills shortages, for example in forecasting and modelling. “It is not clear, however, whether this approach is sustainable in the context of wider reductions in the government’s funding for local authorities. Departments’’ resource constraints have impacted on the government’s capacity to make bespoke, wide-ranging deals with more places,” The NAO noted. Other criticisms of the UK model have included the inherent difficulty of uneven power relations between the three levels of government; the centralised control exerted when deals are negotiated; the lack of transparency around the criteria for cities to be selected for a new; vagueness around the aims, monitoring and evaluation of some City Deals and extra pressure on the already highly constrained budgets of local councils. Another downside of the City Deals, says Prof MacLennan, is raising expectations. “People think this is going to solve all their problems and don’t pay attention to other programs that are reducing and changing.” It can also open up gaps between the haves and the have nots: those areas which have City Deals and those that do not. Prof MacLennan says: “The differences may become so great that the government may have to come in and think about what it does for lagging cities.” But the neediest areas are often those where councils that may not have the organisation or the skilled workforce to make their case for a City Deal. Recommendations for Australian City Deals Good economic modelling is important from the get go, says Prof MacLennan, because it helps predict how infrastructure investment decisions affect the behaviour of individual households and businesses over several years. This can involve leveraging expertise from the university sector. For example, northern English City Deals for cities like Greater Manchester and Newcastle saw local government teaming up with universities for economic modelling and analysis. But Prof MacLennan says Sydney does not appear to have any economic metropolitan modelling ready to use. “You need to pay more attention to what you need to know before you start,” he says. “Otherwise you rely on consultants’ reports that are rarely ever in the public domain and never peer reviewed so that nobody knows what’s in them other than the government.” Once projects are up and running, it is essential to monitor their progress against targets and evaluate them effectively, although it is not always easy to know what would have happened were a City Deal not in place. “What matters is the monitoring and the learning from good monitoring,” he says. Some benefits are fiendishly tricky to quantify. For example, gauging economic gains from sustainability initiatives is difficult when there is no carbon price in Australia. Milestones are part of funding deals and if they are not met it means the next tranche of cash could be held back. The UK now has its own dedicated evaluation panel for City Deals. Putting in enough capital initially is important. Prof MacLennan says the volume of capital going into growing cities like Edinburgh, London and Manchester is not currently enough to resolve the issues these cities face. Exploring innovative methods of finance or making use of old ones could prove useful for Australian City Deals. The Scottish city of Aberdeen recently launched its own government bond but Prof MacLennan points out that cities have limited control over their tax affairs (the key to paying back bonds) and says further fiscal reform would be needed. If this is fixed, he anticipates other major cities could follow suit. In general, he says the UK has not come up with very exciting alternative methods of funding under City Deals. On the whole, Australia is in a good position to implement City Deals and make them work. Prof MacLennan says that the Australian federal government and the states and territories have been much better at making infrastructure decisions than the UK. “I think there is a track record here off trying to think coherently about infrastructure … but the better City Deals, like Manchester, would have relevance to what happens in metropolitan Sydney.” “The images of Australia aren’t about the bush any more, it’s the cities.” [post_title] => What the UK can teach Australia about City Deals [post_excerpt] => Three Australian cities chosen for early deal. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => 26709 [to_ping] => [pinged] => [post_modified] => 2017-03-31 11:58:49 [post_modified_gmt] => 2017-03-31 00:58:49 [post_content_filtered] => [post_parent] => 0 [guid] => http://www.governmentnews.com.au/?p=26709 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw )  => WP_Post Object ( [ID] => 26702 [post_author] => 659 [post_date] => 2017-03-29 14:17:54 [post_date_gmt] => 2017-03-29 03:17:54 [post_content] => Time is running out for opponents of the land titles lease sell-off. As the minutes tick down on the deadline for private sector bids to run the NSW land titles registry opposition to the sale is intensifying. The Berejiklian Government’s plans to flog the only profitable part of the Land and Property Information (LPI) agency have met with widespread anger from surveyors, unions, property developers, real estate agents, community groups and lawyers, who argue that it will debase the quality of the service and make it more expensive for ordinary people, as well causing skilled LPI staff to run for the door. Land titles currently makes a net profit of about $130 million a year. The government will rake in $2 billion by giving the private sector a 35-year lease to operate the registry but Labor has argued this dwarfs the revenue forfeited over the same period. The windfall is earmarked to rebuild Parramatta Stadium and for renovating ANZ Stadium. Despite the majority of people being blissfully unaware of the system until they need it, land titles underpins billions of dollars spent in the NSW economy and a $1.2 trillion real estate market. Land titles define legal ownership and boundaries of land parcels and they are integral to buying and selling property, as well as taking out and paying off mortgages, leasing and inheriting property. A public rally protesting against the sell-off on Tuesday in Sydney’s CBD was followed by a last ditch attempt by Labor to introduce a private member’s bill into NSW Parliament to repeal the previous legislation, which allowed the lease. NSW Opposition Leader Luke Foley said he hoped to shut down the privatisation before bidders had to finalise their bids with the government, which he said was tomorrow (Thursday). Mr Foley warned that allowing the deal to go ahead could throw the system into jeopardy and possibly hand control and access to NSW property records to an overseas-based consortia. He said it would push up conveyancing and land title fees, force home owners to take out title insurance and move 400 jobs offshore. Labor maintains that the sell-off will forfeit the $4 billion revenue which would be generated over 35 years that could instead be channeled towards essential services. “The only people that want this sale to go ahead are the Premier, the Treasurer and a handful of bankers and lawyers who stand to receive a fat pay cheque once the sale goes through,” Mr Foley said. “Among the bidders are consortia that are based offshore, which means they can avoid paying tax, make a buck and can shrug off their responsibility to the people of this state.” But NSW Premier Gladys Berejiklian and NSW Treasurer Dominic Perrottet appear to be pushing on. They have said the new private provider would invest in new technology and faster processing times could be expected, improving the service for consumers and for industry. Moving to reassure Australians, Mr Perrottet said the data would remained owned by the government and not be stored offshore. Ms Berejiklian has said the state would continue to guarantee any title and compensate any claims through the Torrens Assurance Fund. But a gaff over GST on LPI fees has proved a headache for Mr Perrottet. GST is currently not payable on these fees but this will change if the service is privatised. To protect consumers from price hikes, Mr Perrottet has instructed potential bidders to take 10 per cent off the fees, whereas fees had previously been capped at the CPI. Shadow Finance, Services and Property Minister Clayton Barr has argued that this is an oversight and slashes the land titles registry’s value from between $200 million to $250 million to potential buyers, yielding less for the taxpayer than was originally forecast. Greens MP Justin Field said the government should abandon the sale of the ‘world-class land titling service’. "The more we find out about the sale of this monopoly and essential service, the more opposition grows,” Mr Field said. “The community is right to be concerned about increasing risk of fraud, misuse of personal data and increasing costs of property purchases as a result of the privatisation. "The NSW Governments should listen to the experts, LPI staff and the community and stop the sell-off of land titles," he said. Mr Field has launched a community petition to stop the privatisation here. Opponents to the sell-off include the Law Society of NSW, Institute of Surveyors NSW, the Concerned Titles Group, LPI Staff Union, the Public Service Association of NSW and the Real Estate Institute of NSW. [post_title] => The last stand: Land titles sale [post_excerpt] => Time running out for opponents of sale. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => 26702 [to_ping] => [pinged] => [post_modified] => 2017-03-31 11:40:49 [post_modified_gmt] => 2017-03-31 00:40:49 [post_content_filtered] => [post_parent] => 0 [guid] => http://www.governmentnews.com.au/?p=26702 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw )  => WP_Post Object ( [ID] => 26592 [post_author] => 658 [post_date] => 2017-03-27 09:47:01 [post_date_gmt] => 2017-03-26 22:47:01 [post_content] => Super changes start 1 July 2017 Australia’s superannuation (super) system is changing. Your super is your future, so take just one minute to watch the ATO’s new video to find out whether the changes may affect you or someone you know, now or in the future. Most of the changes, announced in the Australian Government’s May 2016 Budget, will commence from 1 July 2017. These changes were designed to improve the sustainability, flexibility and integrity of Australia’s super system. If you need to know more, the Australian Taxation Office’s (ATO) website has detailed information about the super changes and how they will be administered. You can receive alerts via email or RSS feed when new information is published about the super changes by subscribing to ‘Individuals Super’ updates on their website [post_title] => Australia's super system is changing [post_excerpt] => Changes kick in on July 1. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => ato-video-super-changes [to_ping] => [pinged] => [post_modified] => 2017-03-27 09:50:05 [post_modified_gmt] => 2017-03-26 22:50:05 [post_content_filtered] => [post_parent] => 0 [guid] => http://www.governmentnews.com.au/?p=26592 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw )  => WP_Post Object ( [ID] => 26578 [post_author] => 659 [post_date] => 2017-03-20 17:55:36 [post_date_gmt] => 2017-03-20 06:55:36 [post_content] => DIBP Secretary Michael Pezzullo. Pic: YouTube. Department of Immigration and Border Protection (DIBP) Secretary Michael Pezzullo has faced a barrage of questions at a public hearing over the $257 million fit-out of his department’s new Canberran headquarters. The department currently leases more than 100,000sqm of office space spread across 12 buildings and four suburbs in Canberra and leases are due to end progressively between 2017 and 2020. The aim is to consolidate staff across five buildings and two suburbs, while also reducing the amount of office space leased by 14,600sqm. The reorganisation was sparked by the July 2015 integration of the Department of Immigration and Customs and the need to quickly mount sensitive joint operations securely. Mr Pezzullo faced The Parliamentary Standing Committee on Public Works today (Monday) after senators questioned the project’s quarter of a billion dollar tab. Many of the toughest questions came from senators asked him to justify relocating 2,000 staff to an office building at Molonglo Drive, near Canberra Airport. The plan also includes retaining about 4,000 staff across three locations in Belconnen to avoid a negative impact on local businesses if there was a wholesale move out of the suburb. But Labor Senator Alex Gallacher said he did not understand the department’s fascination with the Molonglo Drive site. “You’re paying the maximum rate that you would pay for a lease in Canberra, in an area where the building is eight years old and there is allegedly somewhere between a 20 per cent and 40 per cent occupancy rate. In a less tightly held area, why do you pay the top rate?” But Mr Pezzullo defended the Headquarters Project which the department has said will save $236 million over 30 years, mostly through cutting the amount of office space leased, competitive procurement processes and more efficient whole of life costs. “The Commissioner and I don’t drive around Canberra saying “well that would be a nice place to live in or work in or whatever,” Mr Pezzullo said. “It’s not about its attraction. It’s what came through the process as representing the best fit for the operational requirements ... the best value for money in terms of what the market had come back with in terms of fit-out costs and lease incentives and through the tender evaluation process. Its superiority relative to other market bids that had come back.” He said there was “a massive net benefit to the Commonwealth” but this would have been even larger had the department been allowed to consolidate even more aggressively.” The Department’s First Assistant Secretary of Corporate Services, Ben Wright, told the inquiry: “They gave us a good deal. It’s not just the rent rate, it’s also the lease incentive provided. They provided a rebate as well. “When you take all that into consideration on a per square metre basis, it actually works out quite attractive.” Mr Wright said the department had looked at sites in Civic, Airport, Belconnen and Lowden but the airport building was the best value for money and tender bid. The department said in its submission to the inquiry that the modern, purpose-built fit-out would enable it to co-locate and integrate staff, particularly those involved with border monitoring and control operations. It would be flexible enough to quickly establish task forces and sensitive joint operations and operate them continuously and securely. “The proposed new office accommodation will be of modern design with large efficient floor plates to support future flexibility and provide an open office environment to promote collaboration and positive cultural renewal which has been highlighted as being a critical success factor for the Department’s accommodation objective,” the department’s submission said. Want the latest public sector news delivered straight to your inbox? Click here to sign up the Government News newsletter. [post_title] => Pezzullo grilled over $250 million Immigration reno [post_excerpt] => Canberra Airport site questioned. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => pezzullo-grilled-250-million-department-immigration-office-fit [to_ping] => [pinged] => [post_modified] => 2017-03-21 10:52:07 [post_modified_gmt] => 2017-03-20 23:52:07 [post_content_filtered] => [post_parent] => 0 [guid] => http://www.governmentnews.com.au/?p=26578 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 1 [filter] => raw )  => WP_Post Object ( [ID] => 26305 [post_author] => 659 [post_date] => 2017-02-21 12:38:48 [post_date_gmt] => 2017-02-21 01:38:48 [post_content] => Commonwealth departments and agencies were swindled out of $1.2 billion between 2010 and 2014 with almost 8000 of the fraudsters working in the public service. The Australian Criminology’s (AIC) Fraud against the Commonwealth: Report to Government 2014, found that roughly one-third of all agencies reported being cheated over the survey’s four years and 7900 of those cases were internal fraud committed by staff or contractors. But this figure was dwarfed by the scale of external fraud. Members of the public that cheated the Commonwealth accounted for 99 per cent of the cases and $1.19 billion lost. The four-year fraud census also found that the number of fraudulent grabs for cash increased from $119 million in 2010-11 to $673 million in 2013-14, a huge jump of $554 million, or a leap of 450 per cent. But the AIC pointed out that the fraud blow-out was mostly due to the efforts of one large Commonwealth agency to quantify fraud for the first time, beginning in 2013-14. Larger Commonwealth agencies and departments with more than 1,000 staff were the most likely to experience fraud, 54 per cent said they had. Smaller organisations of less than 500 staff accounted for just under one-third of incidents reported. Medium-sized entities chalked up the lowest fraud incidents. What’s worse is that most fraudsters got away with it. Only $75 million was recovered or 6.3 per cent of the money. Those who were caught tended to avoid a custodial sentence. Internal fraud There were 9467 cases of internal fraud over four years, which amounted to a $12.7 million gouging of Commonwealth cash. The most common was obtaining financial benefit with public servants involved in: obtaining cash without permission; stealing or misusing a government credit card; falsifying documents; stealing or misusing a Cabcharge; stealing property, other than cash and misappropriating grant money. The most common methods of internal fraud were falsifying documents for financial advantage; misusing government credit cards or obtaining cash without permission. The biggest losses were from public servants playing fast and loose with government credit cards. The AIC notes that the greatest risks to internal fraud were inadequate or out-of-date internal controls, poor recruitment practices, lax risk management and insider threats, which is where staff are compromised or groomed by external parties. But despite the dodgy behaviour of a number of public servants there was a significant drop in the number of incidents of internal fraud reported, which fell from 3,828 incidents in 2010-11 to 1,658 in 2013-14: a 57 per cent reduction. The AIC said the drop represented a large reduction of incidents in a handful of agencies and departments, rather than a reduction across the board. External fraud The most common external fraud was members of the public fraudulently claiming government entitlements. Frauds in this category – mostly revenue fraud, visa or citizenship fraud and social security fraud – more than tripled, from 52,127 incidents in 2010-11 to its highest point of 170,756 in 2011-12. By the final year of the four-year census, it was down to 110,698. The next most common fraud was information-related, which affected between 14 to 19 per cent of organisations across the four years. The AIC report said that the risks of external fraud tended to be exacerbated with new benefits coming onstream; the introduction of new taxes; poor procurement practices; badly managed government-funded programs and inadequate monitoring of consultants. Misusing documents was the most common way to execute fraud but misuse of identity was up substantially, more than quadrupling between 2010-11 and 2013-14, from 17,152 in 2010–11 to 79,561 in 2013–14. Catch a thief Of the almost 176,000 people suspected of dudding the Commonwealth over four years, only 5891 were charged and convicted. The most common punishment – meted out in one-third of the cases - was a recognisance order, like a good behaviour bond. Around 45 per cent defendants received non-custodial sentences, including suspended sentences and community service. Ten per cent were slapped with a fine. The numbers receiving custodial sentences were fairly low but have increased from 9.3 per cent of cases in 2010-11 to 16 per cent in 2013-14. Most of the stolen money was recovered by administrative means, narrowly followed by criminal proceedings. Civil recovery and other proceedings were less common. Only around 3 per cent of cases were referred to the police or other organisations for investigation. [post_title] => The great Commonwealth robbery: Govt swindled out of $1.2 billion [post_excerpt] => Almost 8000 public servants involved. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => great-commonwealth-robbery-govt-swindled-1-2-billion [to_ping] => [pinged] => [post_modified] => 2017-02-21 12:51:07 [post_modified_gmt] => 2017-02-21 01:51:07 [post_content_filtered] => [post_parent] => 0 [guid] => http://www.governmentnews.com.au/?p=26305 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw )  => WP_Post Object ( [ID] => 26241 [post_author] => 667 [post_date] => 2017-02-14 10:53:49 [post_date_gmt] => 2017-02-13 23:53:49 [post_content] => The NSW Government is organising tours of LPI’s Queen Square offices for its final bidders. (Photo: J Bar) In 2016 it was announced by the NSW Government that its land and property agency, LPI, would be split up into separate divisions and the land titles arm of the government body sold onto a private bidder. However, inquiries by concerned bodies and mainstream media have since exposed the risks involved and a resounding lack of industry support. It also emerged that the decision has very little financial viability. NSW’s Land and Property Information (LPI) is widely regarded as a world-class land titles registry, and consistently delivers a profit for the NSW Government. In fact, a recently leaked Treasury document reveals NSW’s land titles registry is annually earning at least $130 million in profit for taxpayers. The sale of the LPI, which is technically a lease for the next 35-years, is expected to be worth about $2 billion. However, based on the leaked figures, LPI could generate $2 billion profit in less than half that time. Read more here. This story first appeared in Spatial Source. [post_title] => Tensions reach breaking point in land titles sell-off [post_excerpt] => Pawning off the crown jewels? [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => tensions-reach-breaking-point-land-titles-sell-off [to_ping] => [pinged] => [post_modified] => 2017-02-14 10:53:49 [post_modified_gmt] => 2017-02-13 23:53:49 [post_content_filtered] => [post_parent] => 0 [guid] => http://www.governmentnews.com.au/?p=26241 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 1 [filter] => raw )  => WP_Post Object ( [ID] => 26103 [post_author] => 659 [post_date] => 2017-01-30 15:23:06 [post_date_gmt] => 2017-01-30 04:23:06 [post_content] => NSW Local Government Minister Gabrielle Upton speaking at a 2015 anti-council merger rally in Double Bay. Pic: YouTube Former NSW Local Government Minister Paul Toole has escaped being dumped from Premier Gladys Berejiklian’s Cabinet and instead been handed two new portfolios. The Bathurst MP dodged a bullet that many thought was heading straight for him and scooped up two new ministries, while relinquishing his local government role, being allocated Minister for Racing and Minister for Lands and Forestry. His position as Local Government Minister would likely have become untenable after new Nationals Leader and Deputy NSW Premier John Barilaro came out publicly and said he would block some regional council amalgamations that are still hanging in the balance, something which would have clashed with Toole’s role as one of the main cheerleaders of forced council amalgamations in the former Baird government. Two of the most hotly contested merger proposals still on the table are at least partly in Mr Toole’s Bathurst electorate: the proposed union of Bathurst and Oberon Councils and a merger between Blayney, Cabonne and Orange Councils. Council mergers, along with the greyhound industry ban and hospital funding has been one of the main reasons cited for the Nationals shock loss to the Shooting Fishers and Farmers Party at the Orange by-election last year. Now removed from the rough and tumble of local government mergers, Mr Toole’s new duties as Minister for Lands and Forestry will still bring him into contact with councils, most notably through the review of Crown Lands and roads and the infrastructure backlog. Mr Toole will also need to oversee the new conditions for the greyhound racing industry following the overturned greyhound racing ban, especially in the light of recent reports alleging that dog owners are still doping their dogs. Mr Toole, who was sworn into Cabinet today (Monday), told Fairfax local newspapers that his two new portfolios reflected the concerns of people in rural and regional areas. “Forestry is quite big in rural areas, obviously, and also a strongly innovative industry and a big employer so it’s important that we keep that industry alive,” Mr Toole said. He vowed to oppose any future greyhound racing ban in NSW, as that state's Racing Minister. “Racing is very big in Bathurst with harness racing, thoroughbred racing and greyhound racing so I think I was seen as an MP that had experience with all three,” he said. Mr Toole said his three year stint as Local Government Minister had not all been about council mergers but had also been about improving the integrity and standards in local government and creating a State Borrowing Authority for councils. And what of his replacement, the incoming Local Government Minister, former Attorney General Gabrielle Upton, who has also been handed the Environment and Heritage portfolios? Ms Upton already has already had a rocky ride as far as NSW council amalgamations and the tension between her, local residents and her party goes. The Vaucluse MP spoke at an anti-council merger rally in Double Bay in October 2015 where she encouraged residents to sign a petition against the merger of Woollahra, Randwick and Waverley Councils. She told the anti-merger rally at the time: “I believe there is no perfect size for a council and what works here may not work for those that are three streets to our south. I do believe small can be effective.” “Let me be clear about my position on this issue: my position is that Woollahra Council should not be merged with other councils if it has the community support and the numbers stack up.” A few days later the Independent Pricing and Regulatory Tribunal ruled Woollahra Council unfit for the future and recommended it be merged with its neighbours. Ms Upton got into hot water later in the year when Woollahra Mayor Toni Zeltzer arrived at Ms Upton’s office to hand her a petition against the merger, which Ms Upton refused to take, having apparently been warned not to by her party. Local Government NSW President Keith Rhoades welcomed Berejiklian Government's move to “refresh and reset” its relationship with the local government sector and said he was looking forward to working with the new minister. “As Member for Vaucluse, Ms Upton has previously been prepared to speak out on behalf of her constituents despite personal political risk," Mr Rhoades said. “That’s exactly what communities expect of their elected representatives – to speak up on their behalf and to act accordingly. “I previously commended the Premier on her commitment to running a government which will take more time to listen the community, and I believe this appointment is a key step towards that." He called on the new Minister to abandon forced amalgamations everywhere and to restore local democracy. “Stop the forced mergers and send those councils who were denied elections last year to the polls in September – let the people decide how they want to proceed,” Mr Rhoades said. “The new Minister and the new Premier must be genuinely committed to a new day and a re-set and actually listening to what the people want is a pretty good start.” Ms Berejiklian’s new, expanded Cabinet – 23 ministers in all – also includes two new portfolios: Minister for Counter Terrorism and Minister for WestConnex. Major losers in the reshuffle were Education Minister Andrew Piccoli; Roads Minister Duncan Gay (who is set to quit Parliament ‘sooner rather than later’); Disability Minister John Ajaka – who got upper house president as a consolation prize and Health Minister Jillian Skinner, who reportedly refused an alternative Cabinet role and decided to leave politics altogether. The winners included NSW Treasurer and former Finance Minister Dominic Perrottet, Attorney-General Mark Speakman; Roads Minister Melinda Pavey; Early Childhood Education and Aboriginal affairs minister Sarah Mitchell; Innovation and better regulation minister Matt Kean and Niall Blair, who now has the trade and industry portfolio. List of NSW ministers: Premier - Gladys Berejiklian MP – Premier Deputy Premier, Minister for Regional New South Wales, Minister for Skills, and Minister for Small Business - (John) Giovanni Domenic Barilaro MP Treasurer, and Minister for Industrial Relations - Dominic Francis Perrottet MP Minister for Primary Industries, Minister for Regional Water, and Minister for Trade and Industry - Niall Mark Blair MLC Minister for Resources, Minister for Energy and Utilities, Minister for the Arts, and Vice-President of the Executive Council- Donald Thomas Harwin MLC Minister for Planning, Minister for Housing, and Special Minister of State - Anthony John Roberts MP Minister for Transport and Infrastructure – Andrew James Constance MP Minister for Health, and Minister for Medical Research – Bradley Ronald Hazzard MP Minister for Education – Robert Gordon Stokes MP Attorney General – Mark Raymond Speakman SC MP Minister for Police, and Minister for Emergency Services - Troy Wayne Grant MP Minister for Finance, Services and Property - Victor Michael Dominello MP Minister for Family and Community Services, Minister for Social Housing, and Minister for the Prevention of Domestic Violence and Sexual Assault - Prudence Jane Goward MP Minister for Lands and Forestry, and Minister for Racing - Paul Lawrence Toole MP Minister for Counter Terrorism, Minister for Corrections, and Minister for Veterans Affairs – David Andrew Elliott MP Minister for the Environment, Minister for Local Government, and Minister for Heritage - Gabrielle Cecilia Upton MP Minister for Western Sydney, Minister for WestConnex, and Minister for Sport – Stuart Laurence Ayres MP Minister for Roads, Maritime and Freight – Melinda Jane Pavey MP Minister for Innovation and Better Regulation – Matthew John Kean MP Minister for Tourism and Major Events, and Assistant Minister for Skills - Adam John Marshall MP Minister for Mental Health, Minister for Women, and Minister for Ageing – Tanya Davies MP Minister for Early Childhood Education, Minister for Aboriginal Affairs, and Assistant Minister for Education - Sarah Mitchell MLC Minister for Multiculturalism, and Minister for Disability Services - Raymond Craig Williams MP Parliamentary office holders President of the Legislative Council (elect) – John Ajaka MLC Speaker of the Legislative Assembly – Shelley Elizabeth Hancock MP Deputy President and Chair of Committees – Trevor John Khan MLC Deputy Speaker – Thomas George MP Assistant Speaker – Mr Andrew Raymond Gordon Fraser MP Leader of the Government in the Legislative Council – Donald Thomas Harwin MLC Leader of the House – Anthony John Roberts MP Deputy Leader of the Government in the Legislative Council – Niall Mark Blair MLC Government Whip – Mr Christopher Stewart Patterson MP Government Whip in the Legislative Council – Natasha Maclaren-Jones MLC [post_title] => Upton takes Local Government, Toole reincarnated in NSW cabinet [post_excerpt] => Full list of NSW Ministers. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => 26103 [to_ping] => [pinged] => [post_modified] => 2017-01-30 16:35:22 [post_modified_gmt] => 2017-01-30 05:35:22 [post_content_filtered] => [post_parent] => 0 [guid] => http://www.governmentnews.com.au/?p=26103 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw )  => WP_Post Object ( [ID] => 26080 [post_author] => 659 [post_date] => 2017-01-27 10:21:22 [post_date_gmt] => 2017-01-26 23:21:22 [post_content] => Liberal MP Bronwyn Bishop's cash splash on helicopters, chauffered cars and European tours launched a thousand memes on social media. Prime Minister Malcolm Turnbull needs to urgently act on his promise to reform politicians’ work expenses before another one gets busted, say academics. Parliamentary expenses have been under the spotlight again recently, with the high profile resignation of federal Health Minister Sussan Ley earlier this month. Ms Ley quit after it emerged that she had purchased a $795,000 Gold Coast apartment ‘on impulse’ during a taxpayer-funded trip. News of her chartering and flying planes to attend work meetings back in 2015 delivered the coup de grace. During the ensuing storm of negative public opinion and media commentary, Prime Minister Malcolm Turnbull committed to creating a new independent parliamentary standards authority to vet politicians’ expenses claims, similar to that established in the UK after the 2009 MP’s expenses scandal exploded. It is understood that the new body’s board would include the President of the Renumeration Tribunal, as well as former public servants, judges and politicians and an auditing expert; probably taking over from the Department of Finance, which currently administers the system of complex laws and rules around politicians' expense claims. Mr Turnbull has also pledged to address the 36 recommendations contained in a February 2016 Renumeration Tribunal Review into politicians’ work expenses led by Tribunal President John Conde and former Finance secretary David Tune. The review was commissioned by former Prime Minister Tony Abbott following Liberal MP Bronwyn Bishop’s notorious Choppergate scandal the previous year. The Reviews’ 36 recommendations included making the distinction clearer between official and personal business and defining whether duties are party political, electorate or office duties. Prof Rodney Smith, who teaches Australian politics and public sector ethics at Sydney University’s Department of Government and International Relations, said immediate action was needed to dispel the ‘widespread public suspicion’ that politicians fiddled their expense claims, overlaid by the general idea that politicians were in it for themselves. “I think it’s probably at a point where if nothing happens or there are only superficial reforms, the government is only really going to be making a rod for its own back further down the track if someone else has been embroiled in another scandal,” Prof Smith said. But he said the public sometimes lacked understanding about what the job entailed. “[Australia’s] geography is very big. It’s inevitable that you’re going to need some kind of reasonable scheme for travel and associated costs for doing your job as minister.” AJ Brown, Professor of Public Policy and Law at Griffith University’s Public Integrity and Anti-Corruption in the Centre for Governance, said the task of reforming the system “really is very urgent” and creating an independent regulatory body was a good start. At the moment it was a system “that’s still fundamentally under the control of those who would stick their noses in the trough” leaving MPs to their own devices – and consciences. But despite the positive move to take expenses away from the purview of politicians, he said the new body should also adjudicate on broader corruption issues such as conflict of interest, code of conduct and interest registers. “I think they can get this moving but the pressure will mount for them to broaden its jurisdiction,” Prof Brown said. “It links in with having a stronger federal anti-corruption body generally because some of these issues are even more serious. “My big fear is that this new authority won’t have the jurisdiction to cover all of these things that are sometimes more important and controversial, in terms of parliamentary ethics and standards: issues of public confidence.” Prof Brown also backs creating a new role of Parliamentary Integrity Commissioner, one originally suggested by former PM Julia Gillard and the Independents, to cover all areas of parliamentary standards. Self-regulation has failed Whatever occurs, it is clear that MPs regulating their own expenses’ claims has manifestly failed. Prof Brown said that the independence of auditing and compliance needed to be upgraded because politicians had not been subject to sufficient checks and balances. The rules that exist are too complex and have been built up ad hoc over many years, “The Finance Department have had a terrible time trying to administer it”, he added. “I don’t think they’re [politicians] any more venal than the rest of the world and much of them are less venal but they have been the victims of weak systems. “Just the assumption they don’t need some extra policing to help them keep in line like the rest of the world,” he said. Australia had dropped the ball a bit when it came to clamping down on corruption. “Australia has been very complacent about allowing these issues about corruption generally, both small and large scale. We’re really just catching up with the rest of the world," Prof Brown said. “We need to make sure we’ve got our act together and our systems in place, especially because of how much more competitive the world is and how much faster we are operating.” Both men said that some politicians failed the pub test but still acted within the rules, partly because they belonged to a kind of insider community where what was viewed as convenient and acceptable to getting the job done could be at odds with broader public experience. Prof Brown said: “It’s so easy for people in positions of power to confuse what they’re doing in the public interest with what they want to do in their own personal or political interest. It’s not about individuals, it’s about human nature. “People set their standards on what they see other people do and think it’s ok or they see other people get away with it. The risk of people in high office losing their connection to the community is high.” Prof Smith said that, for the most part, politicians did the right thing but sometimes just got sucked in to what appeared to be the ‘rules of the game’ and slipped up. The big three areas of expense claims that need to be addressed by Mr Turnbull's government are probably: travel expenses, the definition of official business and family reunion allowances. Travel Prof Smith said parliamentary travel entitlements had long been one of the most problematic areas in Australian politics due to the sheer number of politicians caught up in questionable travel claims and because public opinion was often fierce around such debates. Prof Smith said the rules need to be tightened up in some instances and clarified in others. “They are much more specific than they used to be but there are still some fairly broad limits in the rules. An example is [the definition of] official business,” he said. Travel expenses have generated some of the most egregious and colourful scandals over the years. Federal MP Bronwyn Bishop famously fell foul of public opinion in July 2015. Choppergate put paid to her time in the Speaker’s chair in the House of Representatives and launched a thousand memes on social media after she charged the taxpayer more than $5,000 for a cheeky 80-km helicopter trip from Melbourne to a Liberal Party function in Geelong, rather than drive. Neither did it help when Ms Bishop blew $88,000 on a European trip, part of which included her campaigning for the presidency of Inter-Parliamentary Union; or charging taxpayers $600 for a return flight to fellow Liberal MP Sophie Mirabella’s wedding, an expense that Mr Abbott himself paid back and advised other pollies to do the same. What counts as official? A common argument from politicians is that their expenses claims – often relating to travel - are within the rules but later admitting that they would not have passed the ‘pub test’. The problem is, of course, that travel claims like these appear [in Labor Leader Bill Shorten’s words] ‘colossally arrogant’ and out of touch to the general populace, particularly when the government is in the middle of a highly flawed benefits crackdown and gearing up to reduce maternity leave. These stories feed the public perception that says politicians are ‘all the same’ and have their snouts in the trough, leading rarefied lives compared with the rest of us. It is not a good look; neither does it foster much public confidence in the political system or the people elected to serve inside it. Deciding on what constitutes official business clearly needs to be addressed and this is one of the recommendations of the Conde Review. Few things raise the hackles of ordinary folk more than politicians charging taxpayers when they attend major sporting or cultural events as guests of a private company. Tasmanian Senator David Bushby, Finance Minister Mathias Cormann and Parliamentary Secretary to the Treasurer, Steve Ciobo stirred up a hornet’s nest of controversy after they charged taxpayers thousands of dollars to attend the 2013 AFL Grand Final, dubiously excusing themselves by saying they had important work chats with the companies that invited them. Foreign Minister Julie Bishop charged taxpayers $2716 to attend a polo match in the Mornington Peninsula last year as guest of beer maker Peroni and car company Jeep. Ms Bishop defended her expenses claim, saying she was attending in her official capacity. I miss my family Family reunion travel – designed to reduce the isolation many politicians experience from being on the road a lot – has also attracted a fair amount of negative attention. Labor’s Tony Burke spent nearly $13,000 on flights, a hire car and other allowances when his family joined him on a four-day trip to Uluru in 2012 when he was federal Environment Minister. Even the kids flew business class, which Mr Burke later admitted was 'indefensible'. While Mr Burke claimed the taxpayer bill was legitimate because he was on official business and visiting aboriginal communities, others did not see it the same way. The $90 Comcar to travel to a Robbie Williams concert also failed to endear him to a critical public. It is another area that the Review suggests needs changing, reiterating that family reunion travel can only be funded if the politician is at the location for work, underlining that it should not be used to sneak in a taxpayer-funded family holiday. How should reform proceed? Prof Smith said making data transparent is critical to good reform because it will increase public confidence in the system and keep MPs on their toes. At the moment, expenses are published every six months. The Review has recommended this reporting be narrowed to monthly to help open up and demystify the process, as well as to give the public a better understanding of politicians’ jobs. He said that abuses often came to light accidentally or through freedom of information requests from journalists. Many never came to light. “Politicians would be more careful just as they are more careful about accepting political donations or ministers having meetings with lobbyists, because they know there is greater transparency and greater understanding of what’s legitimate and what’s not,” Prof Smith said. The Conde Review’s key recommendations
- Define ‘parliamentary business’ to determine legitimate expenses claims
- ‘Entitlements’ or ‘benefits’ now to be referred to as ‘work expenses’
- Create a single legal framework to deal with work expenses and guide politicians
- Publish rules and details of work expenses on data.gov.au, quarterly and then monthly
- Principle of value for money to be central
- Helicopters cannot be chartered to cover short distances ‘in the absence of compelling reasons’
- A 25 per cent penalty to be paid where expenses claims are ruled invalid, not just those relating to travel
- Prohibit the use of car and driver, including COMCAR, for journeys that are primarily personal
- Abolish the $10 per night travelling allowance for partners accompanying ministers or office holders
- Explore the option of leasing vehicles, rather than buying private plated vehicles
- Tighten family reunion eligibility – only fund trips for partners and children when they join the MP or Senator who is there for the parliamentary business
- Reduced provision for former parliamentarians who don’t qualify for a Life Gold Pass
- Provide politicians from the Big Six electorates (over 500,000sq km) with a third staff office, second vehicle offset and extra travel allowance for stopovers on official business
- The Keating government introduced decentralised agency-based enterprise bargaining into the APS in the early 1990s, ostensibly to allow agencies to improve productivity in ways that were difficult under centralised bargaining agreements.
- There is disagreement over whether or not this was intended to be a temporary arrangement
- John Howard reverted to agency-based bargaining after the 1996 election. Employment conditions were included within the bargaining framework along with an attempt to link any increase in remuneration to productivity gains.
Councils hit backLocal Government NSW (LGNSW), the peak representative body for councils in the state, is suspicious of the bid to parachute-in financial controllers as the Minister sees fit, cautioning some of the state government’s financial assessment methods simply lack credibility. “Many of these moves seem designed to establish new avenues for central oversight and control, rather than recognising that local government is an autonomous, elected sphere of government,” said LGNSW President Keith Rhoades. “There needs to be agreed parameters around the Government appointing a financial controller, and objective measures of "poorly performing" or "high financial sustainability risk" need to be established. Lack of specificity could allow the Government to apply the same discredited methods used to declare many NSW councils "not fit for the future," Cllr Rhoades said. City of Sydney Councillor Ed Mandla, a Liberal, also had reservations as the the efficacy of the new laws. "Surely the best oversight for council books is the ballot box," Cllr Mandla told Government News. [quote]"The real problem for for Councillors is if they have a problem with the GM (general manager) they have to tell the mayor and if they have a problem with the mayor they have to tell the GM — what if they are in cahoots?"[/quote]
Questionable TimingThe latest laws are the second major tranche of legislation to hit this week, with another bill dealing with the donations and the pecuniary interests of councillors – the Local Government and Elections Legislation Amendment Integrity Bill – introduced on Budget night. The timing of the new legislation prompted Labor Opposition Leader Luke Foley to accuse Mr Toole and Premier Baird of trying to sneak through the new laws and of reneging on a promise to introduce limits on donations, especially from property developers. “Mr Baird has broken a clear and unequivocal commitment to introduce spending and donation caps for council elections,” Mr Foley said. [quote]“Caps on donations are not much use without limits on election spending. Predatory interests will be able to spend as much as they like to capture control of a local council.”[/quote] Shadow Local Government Minister Peter Primrose said while it was still too early to give a definitive assessment of the latest laws, people needed to remember that decisions at amalgamated councils – including ones that could flow from the new laws –were being made by government appointed administrators rather than councillors answerable to electors until September 2017. Mr Primrose also questioned whether the Baird Government was really committed to ensuring integrity in council decisions given Budget cuts meted out to the Independent Commission Against Corruption (ICAC) that had persistently uncovered graft and dodgy decisions. “The Premier who is behind this bill is also responsible for slashing staff at ICAC – one of the most important institutions that that maintains integrity in local government,” Mr Primrose told Parliament on Wednesday. Referencing State Budget papers, Mr Primrose said ICAC’s “corruption prevention presentations will drop from 160 to 100” and that the average time to deal with complaints would rise from 30 days to 42 days. "So much for promoting integrity measures,” Mr Primrose said.
Massive Audit Office WorkloadWhile the new legislation is yet to pass, a clear intention of the new laws is to remove the ability of councillors to appoint their own auditors and hand oversight power to the directly Auditor General. [quote]The changes mean that while the government will get a centralised and consistent view of local government finances, the Audit Office of NSW will need to compile literally hundreds of new council reports a year to perform its new duty.[/quote] A spokesperson for Mr Toole said changes brought NSW “into line with most other Australian jurisdictions and New Zealand and will provide greater consistency and certainty across the sector.” “It will also ensure that reliable financial information is available that can be used to assess councils’ performance and for benchmarking. Mr Toole’s Office also confirmed that the Auditor-General will have powers to “conduct sector-wide performance audits to identify trends and opportunities for improvement across the sector” in line with similar powers in relation to state agencies. The total cost of the audits – which are typically charged back to agencies – is still yet to be determined. A state public service source suggested that putting councils under the watch of the Auditor General was “unquestionably” the right move, but one that may not work in Macquarie Street’s favour if ministers relied on rubbery numbers. Premier Baird in February 2016 announced that Margaret Crawford, who has been Deputy Secretary at the state’s Department of Family and Community Services, would become the new Auditor General of NSW.
Key changes as flagged by the Minister for Local Government
- Appoint the Auditor-General as the auditor of all councils;
- clarify roles and responsibilities of councillors, mayors, administrators and general managers;
- introduce new guiding principles for local government;
- improve governance of councils and professional development for councillors;
- consolidate the ethical conduct obligations of councillors;
- establish the framework for strategic business planning and reporting; and
- streamline council administrative processes.
This story first appeared in The Conversation
Whether or not we end up in surplus in five years’ time, yesterday’s Mid Year Economic and Fiscal Outlook (MYEFO) exposes nasty political problems for the Turnbull government in the here and now. Real GDP growth for 2016-17 has been sensibly but shockingly revised down to 2% – the lowest outcome since the global financial crisis, the second lowest in 16 years and the third lowest since the long upswing began in 1991/92. Sensible, because we know, from the third-quarter GDP numbers and other indicators this year, that the upswing in residential investment has peaked before (and perhaps well before) an upswing in business investment has begun. Shocking, because if labour productivity continues to run a little above 1% – as it has for the last four years – the implied growth in employment of 1% or so will probably not be enough to stop unemployment rising. The MYEFO projects the unemployment rate in the June quarter next year at 5.5% – lower than today and lower than the average of 5.8% over the last four years. Yet, at 2.6% year average GDP, growth in those four years has been markedly stronger than the 2% MYEFO now projects for 2016-17. Even with the projected decline in the participation rate, the MYEFO unemployment forecast will be a struggle. Disappointing GDP growth is political problem number one for Malcolm Turnbull and Treasurer Scott Morrison. Problem number two is the implacable persistence of substantial federal deficits. These deficits limit the government’s response to problem number one. In 2012-2013 government receipts were 23.0% of GDP, payments 24.0% of GDP, and the deficit 1.2% of GDP. Labor lost office a little over nine weeks after the end of that fiscal year. In these latest projections for the 2016-17 Budget, four years on from 2012-2013, receipts are expected to be 23.3% of GDP, payments 25.2% of GDP and the deficit 2.1% of GDP. Compared to 2012-13, receipts have increased 0.3% of GDP, spending 1.2% of GDP and the deficit 0.9% of GDP. Receipts are up, but spending is up even more and so is the deficit. There are plenty of reasons for this woeful fiscal performance, mostly to do with modest increases in profits and wages and the tax-minimisation policy of former Treasurer Peter Costello. But these reasons are not ones that square with Treasurer Morrison’s rhetoric, or which can any longer be laid at the door of the previous Labor government. Nor does the MYEFO give any confidence that the troubles of the Turnbull government will soon be eased. The path to the return to surplus depends completely on increasing tax revenue. Spending as a share of GDP is now, according to these MYEFO projections, locked in at 25.2% of GDP right through to the end of the forward estimates period (and beyond the next election) in 2019-20. The projected decline of the deficit arises only because tax receipts are expected to increase over that period by 1.6% of GDP. A slow economy, a rising tax take, perhaps rising unemployment, and not much room to move. 2017 won’t be cheerful for the prime minister or treasurer – or for the rest of us. [post_title] => Two big political problems buried in the latest budget update [post_excerpt] => Not much room to move. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => two-big-political-problems-buried-latest-budget-update [to_ping] => [pinged] => [post_modified] => 2016-12-20 11:35:34 [post_modified_gmt] => 2016-12-20 00:35:34 [post_content_filtered] => [post_parent] => 0 [guid] => http://www.governmentnews.com.au/?p=25886 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) ) [post_count] => 14 [current_post] => -1 [in_the_loop] => [post] => WP_Post Object ( [ID] => 26899 [post_author] => 659 [post_date] => 2017-04-12 15:11:22 [post_date_gmt] => 2017-04-12 05:11:22 [post_content] => The 35-year lease to run the NSW's profitable land titles registry has been sold to a consortium led by First State Super and Hastings Fund Management for $2.6 billion, in a move heralded by NSW Premier Gladys Berejiklian as a ‘massive infrastructure boost’ and by almost everyone else as a bad idea. The only profitable part of the state’s Land and Property Information (LPI), the land titles registry, which currently makes about $130 million in net profit annually, was bought by Australian Registry Investments (ARI), a consortium made up of 80 per cent Australian institutional investors. Investors include First State Super, investment funds from Hastings Funds Management and a 20 per cent stake held by the Royal Bank of Scotland Group’s pension fund, also managed by Hastings. The winners beat off competition from three other consortiums: Borealis and Computershare; the Carlyle Group and Macquarie’s MIRA and Link Group. The NSW government called it a 'phenomenal result' for NSW. “Once again today's result has significantly exceeded expectations,” Ms Berejiklian said. “It means even more funding for the schools, hospitals, public transport and roads that people depend on every day.” The government will drop $1 billion of the sale proceeds on upgrading Parramatta and ANZ Stadiums and refurbishing Allianz Stadium, while the remaining $1.6 billion will be invested into other infrastructure projects under its Restart NSW fund, which often funds roads and public transport projects. The Premier has promised that at least 30 per cent of the total proceeds will be spent in regional NSW. But while the government has argued that selling the lease to operate the land titles registry to the private sector would spur ICT investment and speed up the system, scores of real estate agents, surveyors, lawyers, unions and community groups have slammed the sell-off and called it a disaster. They have argued that it will imperil the quality and reliability of the service, make it more expensive for ordinary people and push skilled staff out the door. Opposition to the sell-off spilled over into a public rally in Sydney’s CBD in March. Land titles defines the legal ownership and boundaries of land parcels and is integral to buying and selling property, as well as taking out and paying off mortgages, leasing and inheriting property. Despite the majority of people being blissfully unaware of the system until they need it, land titles underpins billions of dollars spent in the NSW economy and a $1.2 trillion real estate market. The Public Service Association (PSA) called it a 'a recipe for disaster for millions of property owners across NSW'. “It is hands down, the most appalling fire sale decision yet by a Government with a strong track record in that area”, said PSA General Secretary, Stewart Little. “The government trumpets its efforts on ‘life-changing projects’ but what could be more life changing for millions of people across NSW than to lose the security on their own property? “Just as the PSA feared all along, ultimately the personal property records of the people in NSW will be held offshore given a portion of the successful consortium is based in London.” But NSW Treasurer Dominic Perrottet defended the lease arrangement and said it had ‘rigorous legislative and contractual safeguards’ in place to ensure the continued security of property rights and data. He said any increases in price were capped at CPI for the entire length of the lease and the government would continue to guarantee title, with the Torrens Assurance Fund compensating landowners who lost out due to fraud or error on the register, as happens now. A new external regulator has been established – the Registrar General – to monitor ARI’s performance and resume control, if necessary. Mr Perrottet praised ARI and said the company had prepared ‘a technology roadmap’ as part of its bid, helped by Advara, the private company that runs Western Australia’s land titles service. He said Advara had introduced ‘world-leading titling and registry technology’ to WA and added that the Registrar General would review and approve any major changes to LPI’s IT system in NSW. “This is an industry on the cusp of huge technological advances, and today we have partnered with some of Australia’s most reputable investors who will make sure the people of NSW get the benefit of those advances,” Mr Perrottet said. “Combined with the tight regulatory framework we have established, the investment, innovation and experience ARI will bring mean citizens can expect a better experience.” He said the ARI consortium had received approval from Commonwealth regulators including the Australian Taxation Office, the Australian Competition and Consumer Commission and the Foreign Investment Review Board and the transition to the new operator was likely to be finalised over the coming months. LPI staff have a four-year job guarantee as they transition to the new operator. More to come. [post_title] => NSW land titles lease sold to consortium for $2.6 billion [post_excerpt] => Massive infrastructure boost or recipe for disaster? 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