Parker David: Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill — First Reading 
Parker David: Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill — First Reading 
[Volume:670;Page:16793] 
Hon DAVID PARKER (Labour) 
: 
 The Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill is yet another example of the way that this Government rules for a very very narrow subset of New Zealand. This Government has in the last year given tax cuts of which over 40 percent went to the top 10 percent of earners. It has announced the abolition of gift duty so that rich people can split their incomes by giving assets to the people in their family with the lowest rate of tax. Now it is giving absolutely unjustified rent reductions to millionaires. 
Just about every one of these farmers is a millionaire. These farms are not worth just $1 million; they are sometimes worth $10 million—$10 million. They are more often worth about $4 million yet the Government of New Zealand is saying that in all cases whether or not lessees can afford to pay the rent they will get a discount. Some of these properties have been purchased by the likes of Shania Twain’s family. I do not have a problem with Shania Twain or her family; they are no doubt very good people. 
Hon Maurice Williamson 
: She’s not even here any more. 
Hon DAVID PARKER 
: Well “Mutt” Lange her partner still is. In fact at the moment he is applying to buy a third high country station I say to Mr Williamson. They paid $10 million for those stations. They are multimillionaires yet the Government is giving them a rent discount because they do not want to pay the rent that is set out in the lease. 
These leases are contractual documents. They are statutory leases—statutory leases. There has been absolutely no doubt in the minds of any of these purchasers that they are obliged to pay rent at a derisory 2 percent of the land value excluding improvements. The lessee’s improvements will be at least half the total value so let us say the land value of a property worth $4 million is $1 million or $2 million. That means the lessee of a property that is worth $4 million is paying only $20000 or $40000 rent to the Crown at the moment under the existing formula. Yet the Government has said that if the lessees say they cannot afford it—actually it is not even interested whether they can afford it; it will give them a discount anyway. 
The previous Labour Government looked at these issues in great detail. We found that some farmers cannot on the basis of pastoral farming afford to pay rents that fully reflect the terms of their lease—that is 2 percent of the land value excluding improvements. We said in respect of those farmers that we would not force them off the land; we would give them a discount. We might try to get them to fix up the wilding pines; we might try to perfect access through to rivers and lakes where there is no access for the New Zealand public. But if we did not need to do those things and they could not afford to pay the rent then we would give them a discount anyway. That seemed to me to be a pretty fair and reasonable basis for the Crown to approach this issue. 
The lessees came back and said that their properties might be worth $10 million when they sold them—and they wanted that $10 million in their pocket; they would not give that back to the lessor—but they would not pay 2 percent rent. They said they would go to the incoming Government their National mates and ask for a discount. Those millionaires on occasions can afford to pay it but they are not willing to and they want to change the terms of the lease. 
Well I say to the lessees and to National that property rights run both ways. There are private property rights to be respected and there are public property rights to be respected. A precedent is being set that the lessees ought not to forget. What goes around comes around and I will never put up with an argument now from the lessees coming to me and asking me to please respect their property rights under this lease. What goes around comes around and this is a licence for a future Government to go in fix up these things and change the terms of the lease. 
The previous Labour Government never overrode the terms of the lease. The lessees came to me when I was the Minister for Land Information and asked me to respect their legal rights. I am a lawyer; I respect legal rights. My response was to say that I would absolutely respect their legal rights. They could enforce their legal rights and it was my duty as Minister to enforce the Crown’s rights. The shame I say to Mr Williamson is that he is not enforcing his right as lessor in respect of the lease. He is giving away millions of dollars in value to the lessee. He is giving that money away for no consideration; it is a transfer of value from the Crown to the lessees. 
This issue was considered in the 1980s by a group of experts who produced what was called the Clayton report. The Clayton report found that if one gives a discount to lessees of below the market rent they capitalise an increase in value to the lessee’s side of the ledger so that the relative division of value between lessor and lessee becomes even more weighted towards the lessee. 
Jacqui Dean and Nick Smith pretend that they are trying to get a good landscape outcome in the Mackenzie Country. They are setting up what they call a consultative approach. The outcome of that will be that in tenure review even more of the land will go to the lessee and even less of it will come to the Crown. 
I am told that there is a proposal now for the freeholding of a property around the shores of Lake Tekapo. Of that land 90 percent will go to the lessee and 10 percent will go to the Crown and the 90 percent that goes to the lessee will be extensively developed into dairy farms with centre pivots and the like with extensive changes being made to the landscape. None of that development is permitted under a pastoral lease but this Government is both encouraging that sort of outcome through tenure review and making the arrangements in tenure review outcomes even more weighted towards the lessee because it is devaluing the Crown’s interest in the lease by reducing the rent. Therefore the relative share of the property owned by the lessee will increase and the Crown’s interest will diminish. 
This is another example of governing in the interests of a narrow few. No one in Labour was saying that we should drive lessees off the land. Everyone in Labour was saying that if the rent is unaffordable for lessees who are pursuing pastoralism then we would give them a discount. 
But what about the people who have a fractionalised ownership structure? I will give members an example. A property up the Shotover River—I forget what it is called; it is the former Borrell station—is now owned by a large number of people who all own a fractional interest. It is actually a great big crib now. It is effectively a time-shared holiday resort for the people who own it. We are giving them a discount. Some of the wealthiest people in New Zealand have interests in this station. That is without exaggeration. Some of the wealthiest people have an interest in this station and we are giving them a discount despite the fact that they paid large amounts of money— 
Hon Maurice Williamson 
: We’re not giving anyone a discount. We’re asking them to pay based on the productive value of their land. 
Hon DAVID PARKER 
: No the Government is actually giving them a discount below 2 percent of the land value excluding improvements. Two percent of the land value excluding improvements is the statutory value of the lease. It has been for many decades and it is fair. The land values have increased because people pay a lot of money for these wonderful properties and they are beautiful properties. Most of us would love to own one of them. But we would not expect the Crown which is the lessor to give it to us for nothing. It is getting very close to that—it is getting very close to that now. 
These properties trade for millions of dollars yet the Government is now charging less for these properties than the rent on a lot of residential properties in Auckland despite the fact that these properties are thousands of hectares in area they sometimes abut lakes—Lake Wanaka Lake Wakatipu Lake Tekapo or Lake Pukaki—and they are some of New Zealand’s most valuable and most beautiful properties. The National Government is giving those 200 lessees a discount despite the fact that the lessees are pocketing the money when they sell. Labour said that we should give them a discount if they need it but if they do not need a discount then we should charge them the full rent. They bought the property on the basis of that rent. I ask what is wrong with that and what is unjust about that. Again this measure is an example of this Government governing in the interests of a very small number of people who are getting millions of dollars in value at the expense of taxpayers. 
Mr Williamson said that all of the environmental non-governmental organisations think this is a good idea. That is not correct I say to Mr Williamson. 
Hon Maurice Williamson 
: I didn’t say that. I didn’t say those words. 
Hon DAVID PARKER 
: The member did not say that? OK I am happy to say that the environmental non-governmental organisations actually do not think that this is a good idea because they know it will result in poor tenure review outcomes. We will not have the leverage to sort out things like wilding pines and we will not have the access to our rivers and lakes that all New Zealanders should have.