Williamson Maurice: Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill — First Reading 
Williamson Maurice: Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill — First Reading 
[Volume:670;Page:16791] 
Hon MAURICE WILLIAMSON (Minister for Land Information) 
: 
 I move  
That the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be considered by the Primary Production Committee that the committee present its final report on or before 5 July 2011 and that the committee have the authority to meet at any time while the House is sitting except during oral questions and during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House and outside the Wellington area despite Standing Orders 187 189(a) and 190(1)(b) and (c). 
I am really pleased to speak in the first reading of this bill tonight. It amends the Crown Pastoral Land Act 1998 to set in place what I think is a robust and fair new system for charging rent for South Island high country pastoral leases. In July 2009 the Government agreed that lessees would be charged rent on the basis of the earning capacity of a property. We did that because the present rent system which is based on the land value is both unworkable and a source of dispute between the Crown and lessees. It is quite clear that those properties do not earn a lot of money just because the sheep can get a lovely view of a lake or a mountain. Therefore it is wrong to charge just— 
Hon Clayton Cosgrove 
: Careful. 
Hon MAURICE WILLIAMSON 
: Well Mr Cosgrove may have a different view of sheep but all I can tell him is that that is not our view. 
I am happy to report a high degree of support from high country farmers for the approach that we have adopted in this scheme. Notably environmental groups who have views on pastoral lease management have not raised any concerns about what we are proposing in this legislation. 
It has been a lot of work. We went right back to the drawing board to achieve our goal of implementing earning capacity rents for Crown pastoral leases. This bill proposes replacing what I think is an unworkable land value system with a system based on the productive capacity of the land. Rents will be set by capturing the carrying capacity of a lease in standard stock units and applying a dollar value to those stock units using objective information about the current economics of high country farming. 
Under this bill scientific information about the characteristics of the land in a lease such as aspect and temperature along with a detailed assessment of the land itself will be used as an easily calculated proxy to determine the carrying capacity of the land in its original state. That is a very important element—in its original state. We do not want to penalise people who actively work to increase that capacity. The base carrying capacity will be set once for each lease and will not change. That alone will remove a major source of contention between the Crown and lessees when setting rents. 
The process will then assess how much stock the land can plausibly carry at the time a rent is reviewed so we can measure how far production has increased. The Crown will collect rent on the base production plus 15 percent of the increase. In other words somebody who is farming the land really well and gets a substantial increase across the base carrying capacity can extract 85 percent of that gain for themselves with the Crown taking 15 percent. Ministers gave careful thought to the setting of this percentage. We agreed that rent must be paid on the base production and 15 percent of the increased production; that is what was finally determined. We felt it fairly represents the land and the development opportunity the Crown has provided to the lessees. Implicitly as I said the other 85 percent of the increase is attributed to the work lessees have done on the land and paid for over the years. Their own work and investment will not increase the rent they pay. 
Crucially this 15 percent figure conforms to the property rights inherent in a pastoral lease. We sought assurances on those property rights issues and other elements of the proposed system from an independent peer review panel comprising a former senior civil servant a retired Supreme Court judge and a highly experienced valuer. The peer review panel endorsed the overall package of recommendations as a significant improvement over the current system. 
Finally the system takes the productive capacity of the lease—that is the base plus 15 percent of the increase—and calculates any rents that are up for review by using an up-to-date rate that is calculated each year. This rate captures the current value of the production already assessed. 
I will mention two further features of the new system. First the bill sets out a cooperative approach to assessing the productive capacity of a pastoral lease including a modern disputes resolution process for those cases where the Crown and the lessee cannot agree. 
The final part of the new system that needs mentioning is that the bill contains an opt-in provision to allow lessees currently disputing rental valuations to have their rent set by the new system. As I mentioned before the existing system encourages disputes. As I speak 113 leases are currently before the Land Valuation Tribunal. At this rate over half of all pastoral leases will be in dispute by the time this bill comes into force. This opt-in provision is a vital part of the bill. It allows for the equitable resolution of those disputes and a return to normality for the affected lessees. Those lessees and other lessees in the future will be able to get back to the business that they know best: productive pastoral farming that contributes to the New Zealand economy. 
Finally I along with my colleagues the Minister of Agriculture and the Minister of Conservation extend the Government’s gratitude and thanks to all those who have been instrumental in developing this bill. A lot of work and consultation was required to get here. I particularly mention the peer review panel as I did before which did a sterling job; Jonathan Wallis and his colleagues from the High Country Accord who obviously had an interest they wanted to pursue— 
Hon David Parker 
: They won. 
Hon MAURICE WILLIAMSON 
: I do not believe that. I actually believe this balance gets— 
Hon Clayton Cosgrove 
: You got rolled Maurice. 
Hon MAURICE WILLIAMSON 
: What? 
Hon David Carter 
: It will be interesting to see how they vote in a minute. 
Hon MAURICE WILLIAMSON 
: It will be. I will be very pleased to tell South Island farmers that Labour members think they rolled us because I do not think that is how they see it. 
As I said I thank the High Country Accord. I pay a real tribute to the officials from Land Information New Zealand the Department of Conservation the Ministry of Agriculture and Forestry and the Ministry of Justice. This is a particular example of legislation done in consultation with the interested parties in what I think was a fairly iterative process of getting to a place and a space where we all felt there was balance. 
Hon Christopher Finlayson 
: And Crown Law. 
Hon MAURICE WILLIAMSON 
: How could I have not mentioned Crown Law I ask “Sir Geoffrey”—I mean Mr Finlayson? How could I have not mentioned Crown Law? I commend this bill to the House.