The Hon. TAYLOR MARTIN (16:18): I move:

(1)That a select committee be established to inquire into and report on competition reforms in electronic conveyancing in New South Wales, and in particular:

(a)the impact of outages on property settlements, including home buyers and small businesses;

(b)current pricing and opportunities to drive competition via pricing action;

(c)New South Wales' commitment to deliver interoperability to the market by December 2025, including the status of the reform, the process for execution and the transparency of progress;

(d)the Registrar General's enforcement powers under the Electronic Conveyancing Enforcement Act 2022 to compel electronic lodgement network operators to comply with the reform;

(e)the recommendations of the NSW Productivity and Equality Commission's June 2024 eConveyancing market study;

(f)the relationship between the banks and the monopoly network; and

(g)any other related matter.

(2)That, notwithstanding anything to the contrary in the standing orders, the committee consist of nine members comprising:

(a)three Government members;

(b)three Opposition members; and

(c)three crossbench members, being the Hon. Mark Banasiak, Ms Abigail Boyd and the Hon. Taylor Martin.

(3)That the chair of the committee be the Hon. Taylor Martin and the deputy chair be elected by the committee at its first meeting.

(4)That, unless the committee decides otherwise:

(a)all inquiries are to be advertised via social media, stakeholder emails and a media release distributed to all media outlets in New South Wales;

(b)submissions to inquiries are to be published, subject to the committee clerk checking for confidentiality and adverse mention and, where those issues arise, bringing them to the attention of the committee for consideration;

(c)attachments to submissions are to remain confidential;

(d)the chair's proposed witness list is to be circulated to provide members with an opportunity to amend the list, with the witness list agreed to by email, unless a member requests the chair to convene a meeting to resolve any disagreement;

(e)the sequence of questions to be asked at hearings alternate between Opposition, crossbench and Government members, in that order, with equal time allocated to each;

(f)transcripts of evidence taken at public hearings are to be published;

(g)supplementary questions are to be lodged with the committee clerk within two business days following the receipt of the hearing transcript, with witnesses requested to return answers to questions on notice and supplementary questions within 21 calendar days of the date on which questions are forwarded to the witness;

(h)answers to questions on notice and supplementary questions are to be published, subject to the committee clerk checking for confidentiality and adverse mention and, where those issues arise, bringing them to the attention of the committee for consideration; and

(i)media statements on behalf of the committee are to be made only by the chair.

This motion calls for the establishment of a select committee to inquire into and report on competition reforms in electronic conveyancing in New South Wales. In May 2022 I stood on the Government side of the House to speak on the Electronic Conveyancing (Adoption of National Law Amendment) Bill 2022, which was designed to facilitate competition in the electronic conveyancing market. If I recall correctly, I might have moved the bill to be read a second time, as the Parliamentary Secretary. For me, it is unfinished business after three years. The bill was passed by the last Parliament and was meant to enable competition in the market for homebuyers across Australia, particularly in New South Wales. What we have seen over the past two years is the development of a monopoly, instead of the competitive market we hoped for, and a government not responding fast enough to the problems being faced. Addressing the problem is of paramount importance.

In July 2024 the NSW Productivity Commissioner said that the lack of competition in the econveyancing sector is one of the most important issues that government can still correct. The benefits of competition in this market have been reported on and examined ad nauseam. In the simplest of terms, it means that home buyers and sellers will save money when they transact on property. The average buyer could save on legal fees at a time in their life when every single dollar counts. Across the board, the savings are in the millions. It is clear that, despite the Parliament's legislative intention to introduce competition in the market, that has not been achieved.

Going back to the basics, the PEXA monopoly effectively has about 100 per cent of the econveyancing market. This is the market that Australians use to buy and sell property every single day. It continues to enjoy this privileged position with little attempt to bring competition to the market. Despite its claim that it is pro‑competition, we have seen PEXA write legal letters to banks which resulted in the banks withdrawing from participating in discussions with new competitors. New South Wales must contend with this private monopoly that has full visibility over data and a profit margin of more than 80 per cent, which is just about unheard of.

There is also great risk in relying on a single provider. It is shocking to see that PEXA has experienced dozens of outages on its network, including one on 16 May which impacted an estimated 400 homebuyers across the country. Let me read the story of one family that was stuck when a PEXA outage struck and upended their settlement:

We moved recently, and our settlement was delayed 2 hours ... it was absolute chaos.

Our house already packed, the moving trucks waiting on the side of the road for 2 hours, real estate agent not handing over keys until settlement was completed, cleaners cancelled and changed to a week later, urgently calling grandparents to collect kids due to delay.

We didn't even know if it would settle that day or if we'd have a place to sleep that evening.

Despite this, it appears that there is a go-slow approach with the Australian Registrars' National Electronic Conveyancing Council [ARNECC], the regulator undertaking more reviews with no clear deadline. New South Wales possesses specific enforcement powers to compel PEXA and Sympli to participate in the program. They were passed by the Parliament, with $10 million fines, in October 2022 yet they remain unused by the New South Wales registrar. On top of those powers, the New South Wales Registrar General has the power to place a pricing freeze on fees. That remains unused and PEXA has been allowed to increase its fees each and every year with no competition in sight, further slugging the consumer.

The proposed select committee will attempt to understand where this fell over. Whilst there is a Senate inquiry, that one will look not at the roles of States and Territories, but rather will only examine the role of the Federal Government. That is precisely why it is needed in New South Wales. We need to understand what is happening, what powers the registrar holds and what powers may or may not have been used, and what the Government intends to do to reach the stated goals by the end of this year. It is a shocking oversight in policy delivery and one that does need to be rectified. Ultimately, it is about delivering competition to what has been a monopoly market. Industry, Parliament and consumers need answers and I ask all members to support this sensible proposal.

The Hon. JOHN GRAHAM (Special Minister of State, Minister for Transport, Minister for the Arts, and Minister for Music and the Night-time Economy) (16:23): The Government will not be opposing the motion moved by the Hon. Taylor Martin. However, the Government is not necessarily persuaded that yet another inquiry into econveyancing reform is necessary, given the amount of work that has been done in this area. The reform has previously been reviewed by the Legislative Council. The reform is under review by the Commonwealth Senate, an inquiry that is expected to be reconstituted in the new Federal Parliament. The reform has been reviewed by the NSW Productivity and Equality Commission. It was jointly reviewed last year by Titles Queensland and the New South Wales Office of the Registrar General. Progress reports on the reform are tabled annually in the Legislative Council. The Minister has spoken to progress on reform at budget estimates and has been questioned repeatedly about it, as have former Ministers.

The New South Wales Government supports competition and interoperability between electronic lodgement network operators. This is a national reform, as the member has observed, being coordinated by the Australian Registrars' National Electronic Conveyancing Council [ARNECC], the national council of registrars of title. The project delivered the first interoperable transactions as proof of concept in September 2023. It was scheduled to deliver interoperability functionality to market in New South Wales in staged releases later this year. However, ARNECC placed design, build and test work for interoperability on hold in June 2024 due to concerns about scope and functionality raised by the banking sector.

I am advised that ARNECC is now conducting a functional requirements review and a cost-benefit analysis. The functional requirements review is examining the scope and technical solution for interoperability. I can inform the House that the New South Wales Registrar General has issued a direction to both PEXA and Sympli to cooperate with the review using the enforcement powers legislated by this Parliament. If PEXA or Sympli do not participate in the review, the Registrar General may take further regulatory steps. Both reviews will inform the next steps for the reform, which is why the New South Wales Government believes that any inquiry should take place after they conclude. We also believe that such an inquiry is likely to replicate what has occurred before.

States lack regulatory powers to resolve the concerns of banks about this reform. Banks have indicated that the current scope is not sufficient and does not capture bespoke financial settlement functions that they have developed with PEXA. The banking sector claims that, without this functionality, up to 20 per cent of settlements may fail in interoperable transactions. Registrars may not be the appropriate authorities to oversee the bank or electronic lodgement network operator arrangements. New South Wales and ARNECC continue to engage with the Commonwealth for assistance and intervention.

I seek an extension of time.

Leave granted.

The Hon. JOHN GRAHAM: We have great respect for the work of the committees of this House and indeed for the Hon. Taylor Martin and the reasons he has brought the motion forward. It is for those reasons, despite the significant work that has been done, that the Government does not oppose the motion and wishes the committee well in its work.

The Hon. MARK BANASIAK (16:26): I indicate that the Shooters, Fishers and Farmers Party will support the establishment of a select committee into this matter. As people will remember, I was chair of the committee that looked into the original bill, so there is a bit of history with our party in looking at this reform and I feel a duty to follow through on something that is probably not core business for our party but is certainly important for families looking to move house and settle on new homes.

Some outstanding issues need to be looked into. We know that the registrar does report to the Parliament and there was an issue earlier this year when the registrar reported something that was not completely accurate in terms of the status quo of the reform. I note that it is a Federal issue, but New South Wales is arguably taking the lead or has taken the lead in the reform. A lot of other States are very far behind us, particularly Tasmania, and nowhere near being ready for interoperability. It is important that, as a State, we take a deeper look and see what is holding up the process and how we can essentially see the reform to fruition.

The Hon. CHRIS RATH (16:28): I indicate that the Opposition also supports the motion to establish a select committee into econveyancing. Competition almost always leads to better outcomes and more responsive companies to the needs of consumers and lower prices. It is almost always a good thing and there will be no difference in the econveyancing space. I thank the Hon. Taylor Martin for bringing this important motion forward where members can examine the issue in more detail through a select committee.

It was a very good thing that the previous Coalition Government brought in some of these much-needed reforms, but it is also a good idea that the inquiry looks at why the roll out has been so slow and the problems that have existed. I have also read about the issues caused by some of the recent Property Exchange Australia [PEXA] outages. It is already stressful enough when buying a home, particularly your first home, and you are dealing with banks and lawyers. You do not need PEXA to be down as well. It is a good idea to bring this before a select committee, and I thank the Hon. Taylor Martin for bringing it to this House.

The Hon. AILEEN MacDONALD (16:29): I also speak in support of the motion moved by the Hon. Taylor Martin into establishing the Select Committee on Competition Reforms in Electronic Conveyancing in New South Wales. It matters because property transactions are among the biggest financial decisions people make, whether they are buying a family home or securing land for small business. They deserve a competitive, reliable and transparent system. Outages and inflated fees can cause serious stress and financial loss. As we have heard, settlements collapsing or being delayed can be devastating.

As the current dominance of one electronic lodgement network is stifling innovation and choice, it is time to test whether true market competition exists or if the system is simply being gamed to protect a monopoly. For those of us representing regional New South Wales, where property access and affordability are key to growth, this reform is vital. Delays and high costs hit regional conveyancers and buyers harder. They often have fewer options to turn to. This enquiry will bring essential transparency. We cannot wait for the reforms that were promised by December 2025, and we should not have to push for them. I commend the Hon. Taylor Martin for highlighting this issue, and I fully support the motion.

The Hon. CAMERON MURPHY (16:31): I make a contribution to debate, a contribution I will probably regret because I dare say it will mean I will end up on yet another committee. I congratulate the member for bringing this to the House, because it truly is an important issue. As members have said, for most people a property purchase is the single biggest investment they will make in their lifetime. It is so important to get it right. I am also concerned that some of the difficulties may be inherent problems of having a monopoly that is just moving to protect itself.

I remember when I attended the College of Law, you would have to spend half a day doing practice property settlements. Back in the day, you would do it at a neutral solicitor's office. Each solicitor would turn up. They would have their bank cheques carefully worked out—to the day—for each adjustment for electricity, water, rates and other various elements. Members may not realise that every time there is an outage that lasts longer than a day, the solicitors have to go and input all of that data again after performing another adjustment. It effectively doubles the cost of the conveyancing for both sides.

It is an unacceptable burden on people when we have a housing crisis, where people are stretched to the limit in New South Wales to afford to buy a house in the first place, and where every dollar counts. It is important to look at whether there is unreasonable overcharging, sort out the issues of interoperability and make sure that there is adequate competition. That is why members should support the committee. Although, as I said earlier, I may come to regret that, because I will probably be on another committee. But I am sure this committee will do valuable and important work, and that is why members should support it.

The Hon. TAYLOR MARTIN (16:34): In reply: I thank members for their contributions. I appreciate all the points that Minister John Graham made. I will take them into account. Given the goodwill on display across the Chamber for this proposal, I will not rebut all of the points. Instead, I will quit while I am ahead. The Hon. Mark Banasiak did an excellent job on behalf of the Shooters, Fishers and Farmers Party chairing the previous inquiry on this subject a while ago. As chair of this next inquiry, I hope to fill the big boots he has left me. I appreciate the dedication to competition over monopoly of the Hon. Chris Rath, who has been described as our resident Milton Friedman. I thank the Hon. Aileen MacDonald, OAM, for her support and for noting the issues families are facing, particularly in regional New South Wales. If the Hon. Cameron Murphy is nominated, I will do my best to schedule hearings and meetings to suit him and other members and try not to create too much trouble.

The PRESIDENT: The question is that the motion be agreed to.

Motion agreed to.