O'Connor Damien: Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill — Second Reading 
O'Connor Damien: Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill — Second Reading 
[Volume:678;Page:840] 
Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman) 
: 
 It is a shame that that member over there does not show a bit more leadership in agriculture. Everyone might be a little bit better off. 
I was in this House in the 1990s and I sat through two bills. One was the Crown Pastoral Land Bill which was passed in 1998. The other was the Maori Reserved Land Bill which was passed in 1997. The second bill righted an injustice that was occurring in the country where the owners of Maori land were unable to extract from the people leasing their land a fair rental. In fact they were locked into a situation of 21-year rents and perpetual right of renewal and the lessees on that land were paying over time—adjustments were made every 21 years—a nominal fee for the rental of that land be it commercial be it rural or be it residential. 
The National Government rectified that situation and good on it. The Government said it was completely unfair unjust and immoral that the owners of the land could not extract a rightful rental. It was established in law that the Maori landowners were entitled to 5.5 percent of the unimproved land value of that land on an annual basis—that being a fair return. What we are doing here today is challenging that precedent once again and in fact putting in place bad law. 
I have a passion for the high country and I have to say I have been fortunate to be the guest of a number of high country runholders. I have skied in the area. I love the place. It is iconic; it is what we portray as New Zealand: the Mackenzie Country Molesworth and right down through Otago. It is magic. We must protect it. And we must protect the people who have endured hardship and who live a long way from civilisation. The cost of living out there is high. They live lonely lives except they enjoy them because they make do with their own family. They are people to be applauded and looked up to. 
But the reality we were facing and have been facing is that the value of those properties has been going through the roof. The previous speaker the Minister for Primary Industries said that the Crown had to pay a lot of money for a couple of properties—acknowledged. But the value of that land had been driven up primarily by offshore people coming in— 
Jacqui Dean 
: Not true. 
Colin King 
: Not quite true. 
Hon DAMIEN O’CONNOR 
: I am afraid it is true initially. There are also New Zealanders who have purchased properties as well having to pay for what is quite a large amount of land. It is hard to make an economic return and I acknowledge that. However value is in the eye of the beholder. People purchase properties because they want somewhere to hide away; they want some of the most majestic scenery in the world at their back door. And who can blame them? 
The problem was that the value of the land exclusive of improvements or otherwise crept up. The dilemma facing the Crown or the Government as the landowner is what sort of rent should be expected from that land. Well in fact we have got now—through a Land Valuation Tribunal ruling of course—that 2 percent of the land valuation exclusive of improvements is the rightful rental. That may be fair. It is certainly less than the 5.5 percent the National Government put in place for Maori landowners which has been accepted. It is a lot less. So the question for a lot of taxpayers is whether we are getting a fair return or whether there is something funny going on here. Now it is actually not just that valuation but in fact an arbitrary valuation based on a subjective assessment of the productive capacity of the land—base productive capacity exclusive of improvements—and the value of the stock because it is based on the stocking rate. It is a bit like saying “How long is a piece of string?”. It is very very hard to establish. 
I am sure there will be negotiation and a value arrived at. However Parliament has the role of passing legislation that is fair. I want to see those families remain on this land. I do not want to see people speculate and make windfall profits; it has happened in the high country where there has been tenure review compensation paid land valued and then flicked off for a huge profit. I think the genuine farming families have not been easy with that process at all because they want to remain on the land farm it properly and protect the environmental values. I absolutely respect their management practice and what they have done over many years. 
The problem with passing a piece of legislation that is inherently unfair is that somewhere down the track another Government will rectify the problem. It will do so with moral authority because it will point out the unfairness of this be it to the taxpayer or to any other party. I went to a meeting and put Labour’s proposal on the table and said we would sit down provide the right incentives for farmers who were managing the land properly and ensure that they had affordable rents. But the establishment of the base value of the land and the base rental had to be consistent with most other commercial entities across the country. It must be otherwise there will be a stream of people knocking on our doors saying that they want to be like the other crew who might be getting a concession at 2 percent or at 3 percent or whatever when some people on fixed incomes are being forced from their homes because Maori landowners want 5.5 percent return on the valuation of a block of land in Motueka and those people cannot afford to pay it. People have been forced from their homes. 
There was talk and the Minister said that families were going to be forced off the high country. That is not what we want. In fact the whole concept of income-based rentals was developed by Labour for Housing New Zealand Corporation tenants. What did the National Party say about that? It said it was outrageous. What sort of hypocrisy did we see in this House when we suggested and implemented income-based rentals for Housing New Zealand Corporation tenants? Oh no those members said that was not right because they had been through the process of trying to sell off Housing New Zealand Corporation properties and make it harder for those people to remain in their homes. Now we have a National Government implementing a law that says that for high country lessees we should have income-based rentals. 
I am not absolutely opposed to that but we need to establish a fair system of how we do that. We should provide financial incentives as the Parliamentary Commissioner for the Environment said for people farming the land properly and upholding and sustaining the environmental and intrinsic values of that high country. It is spectacular and we must maintain those values and the farmers on most of those stations and properties have the knowledge and the experience to do that. We want to see them stay there but they must deep down know if they think they are getting a good deal now that someone in the future is going to knock on the door and say “We’ve got to make this fair guys and girls because the taxpayer is actually losing out here.” or “Can we sit down and work out another way of ensuring the taxpayer gets fair value?”. And the value could be in the protection of the values. We said that to them. It could be an enhancement of the environmental values. There should be a value put on that and we should acknowledge what those good farmers are doing. 
Unfortunately what we have here is a piece of legislation that is inherently unfair and unjust. It is unjust to the owners of the land and those are the taxpayers of this country. It is an arbitrary assessment of what is productive carrying capacity and it is an arbitrary assessment of what is stock value. Ultimately the final figure will be one established by negotiation but it may in hindsight not be considered fair. So I want to support the high country families in having a truly sustainable regime that is both affordable— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: I am sorry to interrupt the honourable member. His time has expired.