O'Connor Damien: Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill — In Committee 
O'Connor Damien: Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill — In Committee 
[Volume:678;Page:1266] 
Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman) 
: 
 I do kind of feel sorry for the high country farmers who I know will be following this debate on the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill very very carefully. Criticism that unfortunately might come from this side of the Chamber is not of them individually at all but it is of the situation that National is creating here. I do not think any one of those proud people would want to think that they are getting a subsidy— 
Andrew Little 
: Special favour. 
Hon DAMIEN O’CONNOR 
: —or special favour or have to go cap in hand as the previous speaker Jacqui Dean said. In fact the cap in hand approach is exactly what has happened here because there have been claims that the new rents would be unaffordable—that is the new rents are those calculated on what would normally be seen as a fair commercial basis on the valuation of the land and at a percentage that the market generally accepts at around 4 or 5 percent. We know for some of those properties and we acknowledged in Government that that was a huge increase and it would create a big cost impost on the farmers and we committed as Labour to work through those situations. But what we have here—and unfortunately the high country people will have to listen to this argument for quite some time—is an income-based rental that every lessee would love to have. In fact I apologise for being late in the Chamber because I was meeting with people from the kiwifruit industry. My would those growers love to have an income-based rental on their properties that they are leasing—my they would! We could go back and read from  
Hansard 
 the vitriolic criticism of us when we tried to implement income-based rentals for people who wanted to have a home.  
 So although I apologise to the high country farmers for being drawn into this debate and for all the words that will go backwards and forwards the fact is—and I have said this up front to them—I support them absolutely. They are a special breed of people who are prepared to live in isolated situations and commit to hard work in harsh environments. Not many New Zealanders want to do that these days. But there are many New Zealanders in hard times facing big challenges and many would like a break whether it be an income-based rental or some other form of support. But what we are doing here—when you compare the bill with conventions across all legislation we pass in this House—is setting up something that will not hold water when you compare it with a lot of other things.  
If we are going to go down the path of income-based rentals—as I say Labour is committed to that in housing; a basic area of need—we might end up having to look at that in the area of water charging for domestic supply for a start if people cannot afford it. And maybe some in the agricultural sector will be back before us here saying they cannot afford the water to run their stock or irrigation. Who knows? But under a ridiculous market-based scenario which I am sure this National Government will want to put in place around water the value of it could get to unaffordable levels for people who want basic water. And they may come back with a request just like in the high country situation for an income-based rental because they cannot afford it. There might be an argument and with the passage of this bill there will be a precedent so I expect now that Parliament will be bombarded with requests in relation to Government responsibility where income-based levies income-based taxes or income-based charges will be requested. And it is a perfectly reasonable request given that we are putting this piece of legislation in place.  
Part 1 of the bill contains interpretations and definitions. Some of them are really difficult such as “base carrying capacity”. That is the number of stock you can carry on a bit of land. Of course it is supposed to be a bit of land before any Maori or European came to the land—unimproved land value or land exclusive of improvements. Well I do not know how we are going to calculate that. Part 1A goes through this complex system of trying to redefine land exclusive of improvements when the valuation system had moved beyond that to basically a position of market value. The Maori Reserved Land Bill—now the Act—shifted from unimproved land value to effectively market value to give the Maori landowners a fair return on their assets. I think that was a reasonable outcome. It has caused a lot of angst and pain for many homeowners and I think the lessors needed to take a kind approach and they have done in some cases and not in others—the point being that valuation had shifted from unimproved land value to one of market value and we are turning that on its ear once again.  
We are trying to define the base carrying capacity—how many sheep the land could have held in the year 1650. We are led to believe that not much changed before we came along as I am sure the Green Party will advocate so I guess the number of sheep that that property could carry in 1650 would be the base carrying capacity. Then we move forward to the current carrying capacity of the land and we use a formula with a factor to incorporate 0.15 of the difference between those two capacities. It is a nightmare quite frankly a mathematical nightmare. It then incorporates as defined in new Part 1A inserted by clause 6 a dollar-per-stock unit value. Well the member over there with the big smile on his face Colin King the ex-member of Meat and Wool New Zealand would know that those values vary quite a lot between different stock types and between different years of production for a whole lot of reasons—bizarre most of them—usually on what the meat company might want to pay. The point is that there is huge variability in this and the Government is attempting to put in place a sound steady and reliable system for calculating lease payments that in my view is totally and absolutely flawed.  
What Labour had done in Government was realise that values of the land had gone up and if we were to maintain consistency through valuation yes the lease payments went up. We said that where they clearly were ridiculous or unaffordable then we needed to sit down and work through that. But shifting the precedent of land valuation and shifting the precedent of lease calculation is a very dangerous move. Although members over there might say that this is a very special case—and it is unique land; I accept that—unfortunately most people on leasehold properties will consider that they have special cases. The Zespri kiwifruit growers are those people at the moment who are facing huge problems and challenges and who would I am sure like a break so that they could have affordable lease arrangements. This is not good law and that is why there is going to be robust debate. I do support—and Labour supports—the ongoing wise management of the high country. But this bill is not necessarily going to help in moving in that direction.