The new system was to have been introduced nationally by March next year but now it is unlikely to be available until at least the end of 2011. It could wipe out $437.5 million worth of cost savings on property transactions.
Just a few weeks ago the Prime Minister Kevin Rudd boasted that the new system would save property buyers hundreds of dollars on every property that they bought. Now he has had to admit the timetable outlined by his government has been abandoned.
Eight months of inaction has meant that the state governments are not able to proceed. They have failed to meet the necessary deadlines for key parts of the initiative including how the scheme will be funded.
It is a huge headache for the national government. Urgent talks are set to take place this week between Finance Minister Lindsay Tanner and representatives of the Law Council and the Australian Bankers Association.
Solicitors and bankers, along with non-lawyer conveyancers, are the key players in most property transactions and they fear the delay could be even longer.
Law Council president John Corcoran said the e-conveyancing project had been plagued by setbacks and the latest delay meant 'we are back to square one'.
The Australian Bankers Association warned the new plan meant there would be an 18 month hiatus before the states created the organisation that will run the national e-conveyancing system. 'If we lose momentum in the current environment, it might be very difficult to get key stakeholders back into the process,' said Ian Gilbert, the ABA's director of retail regulatory policy.
Under a revised timetable it is hoped that key decisions will be taken the middle of 2010 but few in the industry believe it will happen this quickly and a two year delay is more likely.
Gilbert described creating the new organisation by September 2010 and giving it 12 months to introduce the new network as 'extremely ambitious' particularly where there has been little work done in the interim.
He is also concerned the federal Government had decided not to provide any 'seed money' for the new organisation and was leaving its funding to the states. 'You cannot set up a company and have it conduct business, including hiring contractors and remunerating staff, unless it is absolutely certain of its funding sources,' he explained.
