Lees-Galloway Iain: Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill — First Reading 
Lees-Galloway Iain: Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill — First Reading 
[Volume:670;Page:16905] 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 I am a little bit surprised by the Green and Maori Party positions on this Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill. I listened closely to the contributions from Kevin Hague and Rahui Katene and it seems as though they are keeping an open mind at this point in time. But really I think once they hear the submissions at the select committee and once they have actually looked through this bill properly they will shift their position closer to the Labour position which is to oppose this bill. Because if ever there was an example that this Government is not working for ordinary New Zealanders it is this example. We have plenty of examples but here is just another. 
Ordinary New Zealanders own this land. The South Island high country is one of New Zealand’s most precious State assets but this bill proposes to reduce the rents that the Crown can actually receive from that asset. The rents the Crown receives should be fair and they should reflect the value of the land. That is how every other landlord would do it. That is what National members would expect from a private landlord. They would say that property rights are important that we need to uphold property rights and that a private landlord should get to set a fair market rent. But for some reason they seem to believe that the Crown should not be allowed to do that. This Government is intent on undermining public property rights. 
Not only are we seeing an undermining or erosion of the rent that can be received from those properties but there is a massive flow-on effect. This is the bit at which I think the Greens will come round because at tenure review some of this land gets privatised. Tenure review is a process by which some of the land gets shifted into the Department of Conservation estate the land that is quality pastoral farming land gets privatised and money changes hands. But we have seen over the years an absolute rort of the tenure review system whereby private landowners get the land for an absolute pittance the Crown cannot get a reasonable and fair price for the land and those landowners get all the windfall profits from that land. It is simply unfair that the 4.4 million New Zealanders—the vast majority—who own this land do not get the windfall profits. Meanwhile the 231 lessees—231—are getting all of the profits and all the benefits out of the system at the expense of 4.4 million New Zealanders. 
Windfall profits mean that farmers are in a better position to freehold their properties. They are in a better position to onsell a part or all of a farm and that gives them windfall profits. We have already seen that happening. Of the 77 runs that have completed tenure review between 1992 and 2008 at least 28 of the new landowners have onsold 176 parcels of newly freehold land. Those 28 new owners paid the Crown $6.9 million to freehold that land but they have realised $134 million after onselling 45266 hectares or 44 percent of the land that was freeholded. So 44 percent of what was valued at $6.9 million has ended up paying windfall profits of $134 million. That is a massive transfer of wealth from 4.4 million New Zealanders to a tiny number of people—28—and 4.4 million New Zealanders have lost out so that 28 of National’s mates could make just under $130 million. It is an outrage; it is an absolute outrage. 
Brendon Burns 
: Good donations! 
IAIN LEES-GALLOWAY 
: I bet there were some good donations out of that. But here is the thing: the lessees will argue and the Government is arguing that the lessees cannot afford the full market rent. Well if they cannot afford the full market rent a discount is already available—they can apply for a discount. Do members know how many of those lessees applied for a discount? Can anybody guess? Zero nada none—not a one! Nobody applied for a discount yet apparently it is absolutely outrageous that the Government expects a fair market valuation on the land so that it can ask a rent—would members believe—of 2 percent of the total value of the land. It is apparently so outrageous that no one can afford it but not one of those lessees applied for the rent discount. They were told about it—they were told about it three times no less. They had plenty of opportunity to apply for a discount but they did not. 
Why? It is a very good question. Why do lessees not apply for a discount if they think they cannot pay the rent? Well because there is another option which is to challenge the full rental valuation. That is exactly what these lessees have done. In fact I have heard from the Government that about 113 lessees have applied to the Land Valuation Tribunal for their rental assessments to be revalued. Why would they do that? If the lessees get an actual revaluation of their leases it diminishes the value of the land so that when they get to tenure review and there is an opportunity to privatise the land they can get the land for a lower value. 
If the discount were applied for and it was acknowledged that the full market valuation on the rental still existed but because of particular circumstances a discount was given then that would secure the full valuation of the land. In that way the Crown would get to realise the full value of that land when it was privatised. But no! That is not what the lessees want to do and that is not what this Government wants to do: it wants to make sure that all those windfall profits go to their few mates in the High Country Accord at the expense of the rest of New Zealand. 
There is an agenda going on here to devalue a Crown asset. It is one thing to go around selling off all our Crown assets left right and centre but here we have an asset that the Government is receiving rent on. It is a dividend that comes into the Government coffers that can be used for everybody. But no the Government wants to devalue that so it can reduce the amount of income coming in. The gains that come from those leases rightfully belong to all New Zealanders. It is quite obvious what this Government is trying to do. In the first instance it is undermining the dividend; it is reducing the dividend that all New Zealanders could have received. In the second instance it is ensuring that the windfall profits go to a tiny few and do not get passed on to the majority of New Zealanders. The Government would have people think that by Labour taking this position the party is somehow anti-farmer. 
Hon Maurice Williamson 
: Well you are. 
IAIN LEES-GALLOWAY 
: Aha—there we go. I just wanted to check and make sure—yes OK! The Government would have people think that we are somehow anti-farmer. Well that is simply not true. 
Let us just look at this policy a little bit more closely. Who actually benefits from it? Is it the farming community at large is it New Zealand’s entire rural community or is it in fact 231 lessees not all of whom are farming? It is the latter who benefit from it—231 lessees not all of whom are farming. Some of them are foreign rock stars who just enjoy living on that particular land with all of the views and the general and pleasant lifestyle they get from it. All other farmers in the country have to pay either a fair valuation if they purchase the land or a fair market valuation if they are leasing the land. This policy is not some pro-farmer policy; it does nothing for most farmers in New Zealand. It works for only a tiny tiny few living in the high country of the South Island. 
These lessees are getting very special treatment from this Government and I would like to know why the Government is giving such a small number of people such special treatment because that is to the disadvantage of all New Zealanders. It is to the disadvantage of the rest of the rural community; it is to the disadvantage of the Government of the day which receives a dividend from this land. It is just unbelievable that the Government is trying to sell us a story about how it is supporting high country farmers. You know I think the Government would have us think that the people it is working for here are blokes riding around on horseback saying “Good on ya mate.” to one another but it is not. They are a tiny tiny few and this legislation is to the disadvantage of all New Zealanders because this Government is not working for New Zealand.