Sage Eugenie: Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill — Third Reading 
Text is incorporated into the Bound Volume 
Sage Eugenie: Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill — Third Reading 
[Sitting date: 01 May 2012. Volume:679;Page:1845. Text is incorporated into the Bound Volume.] 
EUGENIE SAGE (Green) 
: 
 Tena koe. Debate on the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill has been wide ranging and it has gone up-hill and down-dale much like the lands that it will set the rentals for. Nothing that we have heard in this debate has convinced the Green Party to change its position of opposing the bill. It is a bad bill which favours pastoral lessees at the expense of the Crown and the public. Some Government members persist in characterising Green and Labour opposition to the bill as an attack on high country farmers. It is nothing of the sort. It is a debate based on principle on how rentals should be set for the remaining 200-plus pastoral leases covering 1.61 million hectares of the South Island high country and on how the Crown should manage and treat its interest in these dramatic and distinctive lands. It is a debate on whether we should set rentals in a way that is fair to both lessees and the Crown or in the way that this bill does which benefits the leaseholders at the Crown’s expense. The bill charges lessees a rental for their rights to exclusive pasturage but not for their rights to exclusive occupation which they also enjoy. This means that the Crown is giving away a significant share of its interest and depriving taxpayers of a return on the true value of the Crown’s pastoral lease assets.  
The Green Party opposes the bill because it represents the failure by the Crown and by Land Information New Zealand to protect the public interest in pastoral leases. The Land Act 1948 as Mr Parker has mentioned has provided for pastoral leases to have rentals based on 2 percent of the unimproved value provided you pay on time. That has been in place for many decades and it is a very cheap rental. By providing for discounted rents that take no regard of location values quite unlike the rents for most property values in New Zealand the bill will decrease the value of the Crown’s interest and increase the capital value of the leaseholder’s interest. That division of value in the pastoral lease between the lessee and the Crown changes in favour of the lessee and that will further worsen the poor outcomes from tenure review. It will lead to the Crown virtually giving away its interest in Crown pastoral leases during the negotiations because of the bargain-basement price per hectare put on the value of the Crown’s share.  
 Research by Lincoln University’s Dr Ann Brower analyses the returns to pastoral lessees and to the Crown from tenure review settlements between 1992 and 2012. That research highlights the inability of Land Information New Zealand to advocate for and represent the interests of the Crown. Dr Brower’s work is rigorous though it is unpopular with National members because they do not want the facts. It shows that since 2007 lessees on average have received more than double the per hectare payment from the Crown for land that is retired from grazing and restored to full Crown ownership as conservation land that they received prior to 2007. In tenure review settlements prior to 2007 the Crown paid lessees an average of $159 per hectare to relinquish pastoral lease land. Post 2007 the average jumped to $343 a hectare yet on the other hand lessees paid the Crown an average of only $67 per hectare to freehold prior to 2007 and an average of $65 per hectare— 
Shane Ardern 
: What did they buy from them?  
EUGENIE SAGE 
: —after 2007. National members are interjecting because they do not like the results of this research. It has been an objective analysis going through the returns.  
Dr Ann Brower’s analysis— 
Hon David Carter 
: She provided the conclusion before she did the work. 
EUGENIE SAGE 
: —no—shows that the Crown paid runholders around $22.6 million more to buy the option to graze unforgiving high country land and often land that was deemed unsuitable for farming use than runholders paid the Crown for the option to subdivide and develop pastoral lease land. Dr Brower’s research also shows that between 1992 and 2008 46 percent of the land the Crown sold for $6.9 million has since been onsold for $135 million. So pastoral leaseholders have been able to sell land at between 2000 and 27000 times the price at which they purchased the freehold. Land Information New Zealand representing the Crown has totally failed to take account of the location and amenity values that are part of the Crown interest. Land Information New Zealand has failed to take account of the option to onsell when it has been negotiating those tenure review outcomes. Lessees have enjoyed windfall gains as a result.  
As Dr Brower notes the fact that the Crown has consistently undervalued the development options in tenure review suggests that the Crown is “pathologically unwilling or politically unable to exercise its power on its side of the table” in tenure review. In just one example on Rhoboro Downs near Twizel the former lessee was able to privatise 4648 hectares for $55000. Subsequently 127 hectares of that land was onsold in one parcel for $1.9 million. On Pukaki Downs the lessee was able to privatise 3722 hectares for $191000 and then onsell 582 hectares of that for $4.665 million. National members call this the politics of envy. It is more the politics of stupidity when we have a $13 billion debt not to get the full benefits of these assets when they are privatised.  
The Green Party’s opposition is also based on the uncertainty in this bill about whether the Valuer-General’s determination of carrying capacity for the purpose of setting a rental will include a thorough ecological assessment of the pastoral lease. Such an assessment should calculate how many stock can graze the land without harming the vegetation cover such as tussock or native shrublands. 
Hon David Carter 
: It happens already. 
EUGENIE SAGE 
: It does not. The language in new Part 1A inserted by clause 6 of the bill and its references in clause 23A(2)(b)(ii) to using “scientific evidence” and “information about the land” is vague and woolly. The Minister in the chair chose not to take a call during the Committee stage to explain whether there was any intention that ecological assessments would be done to help determine carrying capacity. That is really disappointing because it suggests that the Government is not interested in determining whether high country lands can be better managed to maintain healthy tussock cover to reduce soil erosion to control the spread and dominance of  
Hieracium 
 to protect wetlands as natural sponges to safeguard water quality and to protect the landscapes on which so much tourism marketing depends. So it would be helpful if the Minister did clarify that.  
The landforms we see on many pastoral leases particularly around the southern lakes and elsewhere show their glacial past with their smooth hills. They have got a jumble of moraine boulders and they have got extensive outwash plains. Those landscapes have been millennia in the making. Privatisation through tenure review inevitably leads to more intensive development whether it is through subdivisions for second homes or for new vineyards with their tightly clustered rows of vines. The patterns the colours and the texture of the landscape change and it is domesticated. The indigenous vegetation disappears. This bill will exacerbate that. It will provide windfall profits for lessees and it will provide for unfair rentals and poor ecological outcomes. That is why the Green Party opposes it.