Federal Assistant Competition Minister Andrew Leigh says states need to end PEXA monopoly

The federal competition minister says states are not doing enough to fix problems caused by privatising a public monopoly, as plans to end PEXA’s monopoly of e-conveyancing hits a fresh hurdle.

Assistant Competition Minister Andrew Leigh. Picture: Martin Ollman

The federal government has called on the state and territory governments to use all available powers to open e-conveyancing up to competition following calls from the NSW Productivity Commission to end PEXA’s monopoly swiftly.

Governments have been pushing to break up PEXA’s dominance by forcing it to allow its systems to operate with those run by challengers such as Sympli — owned by ASX and InfoTrack.

The process has been the subject of frequent delays, and hit another hurdle after state governments last week called on the Commonwealth to intervene and force competition. The Australian Registrars National Electronic Conveyancing Council (ARNECC) then halted all work on the interoperability program because aspects were “beyond the remit of state and territories”.

Federal Assistant Competition Minister Andrew Leigh has criticised states and territories for delays in bringing greater competition in e-conveyancing space, adding the federal government would only step in once ARNECC used all available powers.

“Ultimately this has arisen because states and territories made an ill-considered decision to privatise a public monopoly, which is now behaving as our economics textbooks would lead us to expect,” he said.

“The first step is for ARNECC to ensure that it uses all of the available powers. At the moment the states and territories haven’t used all their available powers, and so the Commonwealth is ready to step in when the states and territories have run out their powers.”

It comes as the NSW Productivity Commission called for the Australian Competition and Consumer Commission to take over the regulation of property settlements because ARNECC neither had the funding or power to do so.

Dr Leigh said delays in the interoperability program would only benefit the incumbent monopoly player of PEXA, adding levelling the playing field will help to lower cost of buying and selling property.

Sympli chief executive Philip Joyce says delays will only serve to benefit PEXA.

“The prices that Australians pay for e-convening could be lower if we had competition in the market, and with housing affordability a major issue, the idea that we would continue with a privatised monopoly doesn’t seem in line with the competition principles.”

Around 3.7 million e-conveyancing transactions were processed nationally in the year to June 2023. PEXA, which counts Commonwealth Bank as a major shareholder, has a 88 per cent market share and to lodge documents with land registries and complete financial settlements.

PEXA, which at one stage was owned by the state governments of NSW, Victoria, Queensland and Western Australia, has blamed the delays on the failure of governments to understand the complexities of its systems, while its rival Sympli has accused PEXA of stalling.

PEXA disagreed with many of the concerns held by NSW productivity commissioner with a spokeswoman telling The Australian that it had long supported equal access to national data for public policy and economic purposes.

“PEXA has long supported equal access to national data for public policy and economic purposes and offers all financial institutions the same access to information about the home loan market,” she said.

“PEXA does not provide anyone with information about mortgage pricing. PEXA has previously proposed an open data framework with appropriate privacy protections, presenting this across NSW and the Commonwealth.”

Sympli chief executive Philip Joyce told The Australian that the standoff between federal and state ministers will only serve to benefit PEXA, adding that all levels of government need to use their enforcement powers to break up the monopoly in the industry.

“PEXA has been consistently sabotaging this competition reform through disinformation, withholding key information and political lobbying with zero consequence from the Government,” he said.

About 88 per cent of all properties sold use PEXA’s network. Picture: AFP

“It is time for Governments to use their enforcement powers against the monopoly and refer them to the ACCC – its now or never.”

Mr Joyce said it was unexpected that ARNECC had paused the interoperability program and called on state and territory ministers to intervene to resume work on this program, adding it risked the December 2025 deadline.

NSW Liberal Senator Dave Sharma said the federal government needed to step up, telling the Senate on Tuesday that plans to open up e-conveyancing market platforms were behind schedule and PEXA was showing monopolistic behaviour.

“PEXA controls 99 per cent of the e-conveyancing market, and unsurprisingly when you have a monopoly you have monopolistic behaviour, there’s a lack of competition and higher prices as a result, “he said.

“Dr Leigh in the other chamber said that PEXA’s behaviour has been that of a textbook monopolist. State and federal governments committed to opening up this sector to competition by next year but at the moment that is woefully behind schedule. I urge this government to get involved.”

There is a December 2025 deadline to allow other platforms to work with PEXA systems, which the NSW productivity commissioner wants PEXA to be penalised if it does not hit it.