IN ANOTHER embarrassing technology bungle, the Brumby Government has spent $40 million and six years developing an online property settlement system that has processed only one transaction in seven months.
Major banks and lawyers have boycotted the new electronic conveyancing system, effectively rendering it useless.
The Government was warned as early as 2004 that banks would only take part in a national electronic system. Lawyers cannot get professional indemnity insurance to participate because it is considered too risky.
Despite the 2004 warning, the Victorian Government pushed ahead and last November slapped a sharp price rise — up to 32% — on users of the old paper system, hoping home buyers would turn to the new electronic version.
For five months, the Government's system lay idle until last month when two Melbourne conveyancing firms, with Bendigo and Adelaide banks, completed an online property settlement.
The transaction was trumpeted as the "world's first electronic settlement". But no other transactions have followed and The Sunday Age believes the Government is searching for another settlement to put through its system.
Meanwhile, the Government will this year collect an extra $6 million from the price hike of $15.50 on the 400,000 conveyancing transactions across the state.
The State Opposition, lawyers and builders said the extra charge was an unjust imposition when the Government's preferred system was essentially unusable because of the boycott.
The electronic conveyancing bungle is the latest in a string of nightmare Government technology projects, which include myki, the public transport ticketing fiasco.
Conveyancing is the legal process of transferring real estate from one person to another.
Property buyers are charged for the transferring of sale documents and registration of mortgages. Despite a lack of customers, the Government's new system was recently a finalist in national awards for technology excellence in government.
The electronic system was designed to eliminate from conveyancing the necessity to meet to exchange documents and the drawing of cheques. The Government also hoped it would reduce the costs of buying a house, saving $235 to $395 on the typical four-party settlement and up to $70 million in red tape reductions across the state each year.
Liberal MP David Davis described the implementation of electronic conveyancing as a shambles. "With $40 million spent and a single transaction to show for it, the Brumby Government has pushed ahead against the advice of the banks and the lawyers, determined to implement last decade's technology," he said. "Victorian families are being slugged to prop up the Government's white elephant."
One legal commentator described the system as "the perfect example of how not to build an e-conveyancing network".
Michael Brett Young, the Law Institute of Victoria's chief executive, said that even if the risks for solicitors were fixed, the state system was doomed to fail without the acceptance of the major banks.
In national negotiations, Victoria is insisting that each state take on a version of its system.
But the only state to support this position is Queensland.
All other states and the Commonwealth want a seamless, centralised national system. The National Electronic Conveyancing Office has been set up to establish this, but Victoria has frustrated progress, insisting on keeping its own system.
It appears that state bureaucrats, having spent $40 million — much of it on fees for the private contractor Ajilon and for legal advice — do not want to walk away from their system.
Victorian Government technology blunders:, the public transport ticketing system: hundreds of millions over- budget and years overdue.
■ myki
■ New criminal justice software system: years overdue and at least $30 million over budget.
■ $60 million school software system: facing delays and cost blowouts.
■ $20 million computerised directory for public servants: over-budget.
■ HealthSMART project for state health system: almost $35 million over-budget.
- Melissa Fyfe
- June 21, 2008
- Fairfax WA Today
- The Age
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