State's $40m e-conveyancing system in the auditor's sights

Chris Merritt, Legal affairs editor | The Australian | August 15, 2008

THE Victorian Auditor General is considering a performance audit of the government's $40 million electronic conveyancing system.

The system has been used for just one property settlement since its launch last year and is set to be superseded by a planned national system.

The auditor general is considering adding the e-conveyancing system to the list of projects that will be subjected to a performance audit next financial year.

A preliminary examination of the system has been launched in response to suggestions from Opposition frontbencher David Davis.

Mr Davis said the system's only real impact had been to increase the cost of paper-based conveyancing in Victoria in order to drive business to the electronic system.

Because the main private sector players in conveyancing had refused to use the system, Victorians had been hit with increased charges of $6 million a year, Mr Davis said.

Unless the state government reversed its fee increases, Victorians would be paying the extra charges until the national system was in place in 2010, he said.

"The government will pocket a $12 million windfall from everyone who buys and sells property," Mr Davis said.

The Law Institute of Victoria called last month for the original fee structure for paper-based conveyancing to be restored because Victorians were not using e-conveyancing.

"They're making a windfall gain," Law Institute of Victoria chief executive Michael Brett-Young said.

The involvement of the auditor general's office comes soon after The Australian revealed that an employee of the company that helped build the system was running the government agency responsible for e-conveyancing.

James Walker, who is still an employee of computer consultant Ajilon, is one of a number of private consultants running the system.

Another Ajilon employee, Rick Dixon, is the electronic conveyancing project manager in the department of Sustainability and Development.

Mr Davis said he was concerned about the state government's growing use of "alliance-type contracting" between the government and private companies.

"The Government claims that works well in some areas but the auditor has pointed to problems" in other projects, he said.

"There's a fuzziness about what is being purchased and what is being delivered," he said.