Editorial in the Sydney Morning Herald, originally published on 26 November 2020.
Memories of the NSW government compulsorily acquiring homes in Sydney’s inner west several years ago for the $16.8 billion WestConnex motorway project will remain raw for many of those whose lives were upended as a result. Many of those ejected had been living in their homes for decades and the upheaval rippled across communities. Aside from the emotional toll, homeowners were forced to sell their properties to the state at a price many argued denied them the opportunity to buy elsewhere in their suburbs due to the strong property market at the time.
So revelations by the Herald that the government paid three times as much as the Valuer-General’s estimate for a highly contaminated parcel of industrial land at Camellia, near Parramatta, will be sure to have enraged some of those forced out of their homes in the inner west.
The Camellia land deal in 2016 – that earned Sydney property developer Billbergia a $15 million windfall in a matter of months – occurred at about the same time as the state was forcibly acquiring homes in suburbs such as St Peters and Haberfield for WestConnex.
The revelations also come just two months after federal Auditor-General Grant Hehir was scathing of the Commonwealth in a report into its handling of the purchase of 12 hectares of land next to the site of Western Sydney Airport for $30 million in 2018 from a billionaire farming family. In that case, the federal government paid 10 times what the property – dubbed the Leppington triangle – was deemed to be worth less than a year later.
In the public’s mind, the two deals will serve to undermine confidence in the system. At the very least, it will reinforce perceptions that one system exists for small property owners and another for wealthy and powerful landholders. The deals also raise suspicions that they are only the tip of the iceberg in a city where mammoth fortunes are made – and lost – over property. The recent anti-corruption inquiry hearings into disgraced former Liberal MP Daryl Maguire have shone a spotlight on the extent to which large property owners and developers have been able to gain access to decision-makers.
In the case of the Camellia land deal, the NSW government has rightly asked the Independent Commission Against Corruption to investigate. After all, former counsel assisting the ICAC Geoffrey Watson – who is a director of the Centre for Public Integrity – and ex-NSW auditor-general Tony Harris were adamant before the government announced its move that the matter should be referred to the anti-corruption watchdog.
Yet it should have acted much earlier. Questions about Transport for NSW’s purchase of the six-hectare property were first put to the government during a budget estimates hearing in August 2018. It prompted the transport agency to launch an internal audit of the deal soon afterward. That audit was sent to Transport for NSW’s audit and risk committee but it went no further. It was only after this masthead aired concerns about the purchase that the government acted by referring it to the ICAC as well as the NSW Auditor-General.
Upholding public trust in the system should be paramount. To do that, the government needs to ensure that the framework for property acquisitions by the state is consistent and fair. The government should avoid negotiated settlements with wealthy property owners.
Deals struck behind closed doors raise the risk of the wealthy and powerful resorting to questionable tactics to achieve much higher prices than the state would otherwise pay. In other words, demanding a higher price to avoid an acquisition becoming bogged down in the courts for years. The formula for determining a fair price for a property must be applied consistently and transparently, and overseen by an independent arbiter. Anything less will lead to fears – rightly or wrongly – that the system is broken.