Pressure is mounting on the federal government to limit the monopoly of online conveyancing platform PEXA, with Liberal senator Dave Sharma joining calls for the competition watchdog to provide oversight of the electronic conveyancing market.
On Tuesday, Senator Sharma was highly critical of delays to interoperability work being done to open PEXA’s system up to potential competitors as “woefully behind schedule” and urged the federal government “to get involved”.
As inflation pressures mount, with one measure putting inflation now at four per cent, Senator Sharma said there was a need to increase competition in key sectors to put downward pressure on prices, including in eConveynacing which is used in 75 per cent of property transactions.
Senator Sharma’s statement to the Senate follows claims from the two eConveyancing combatants that the industry regulator (ARNECC) had paused its program that aimed to enable data interoperability by December 2025.
Senator Sharma flagged a recent NSW Productivity and Equality Commission report that found “the market is not effectively competitive, that there are high levels of market concentration, that there are high profits to the provider, and that there are material barriers to entry”.
“In fact, Assistant Minister for Competition Dr Andrew Leigh…said that PEXA’s behaviour has been that of a textbook monopolist. Well, what are we going to do about it?” Senator Sharma asked.
Published on Monday, the eConveyancing market study called on the Australian Competition and Consumer Commission (ACCC) to “immediately conduct a comprehensive review” of eConveyancing pricing due to PEXA’s high profits.
The study said that greater competition in the sector would drive innovation in addition to lower prices. It also noted that “consideration needs to be given as to whether” ARNECC is still best placed to regulate the eConveyancing market.
Several of the study’s recommendations call for the ACCC to have an ongoing role in overseeing the eConveyancing market.
“They’ve said the existing regulator, which most people haven’t heard of … is simply not up to the task of policing that market. They’ve said the [ACCC], a federal body, is best placed to lead the ongoing market reforms in this area.” Senator Sharma said.
With reforms “woefully behind schedule”, he urged the government “and particularly the Assistant minister for Competition Andrew Leigh to get involved”.
On Monday, Mr Leigh told InnovationAus.com that while the Commonwealth would help solve issues raised by the banking sector, he argued that “it is incumbent on states and territories to make sure that we get the savings that come from competition in eConveyancing”.
He suggested that state governments legislate a timeline for when interoperability needs to happen.
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