O'Connor Damien: Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill — First Reading 
O'Connor Damien: Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill — First Reading 
[Volume:670;Page:16796] 
Hon DAMIEN O’CONNOR (Labour) 
: 
 The member David Carter and the previous speaker from National Maurice Williamson ought to take a lesson in history and read some of their own speeches. A lot has happened in the high country. Back in the 1990s the then National Government did two things. It tried to resolve a couple of anomalies in the leasehold area—one with Maori reserve lands and the other with Crown pastoral lands. Two Acts were passed one in 1997 and one in 1998. The then National Government drove tenure review because a couple of reports had stated that “Successive Governments have agreed in principle with the commission’s findings that the pastoral leases should be freeholded to release their potential and to offer the opportunity for better stewardship.” That is effectively what tenure review did. It was set in train by the then National Government with the idea being that some areas of the high country were better in private ownership and some areas would be better put back with the Department of Conservation. The then National Government drove that situation. 
The previous Labour Government came in and did not disagree with it in principle. But some of the easy transitions had occurred and it was getting more difficult so we ended up with the situation where some properties that had been freeholded had been onsold. The valuation set in the tenure review process for the high country land was proving to be way below that of its market valuation. The Crown as the owner of the land was left in a difficult situation. Should it just ignore the market valuation of high country land that people like Shania Twain Tom Sturgess and a number of New Zealanders were paying big money for? 
Sandra Goudie 
: Yes. 
Hon DAMIEN O’CONNOR 
: National members say yes. In fact the law states that a valuation must be taken on an equivalent area of land and that gives a fair indication of the value of the property being looked at. “Equivalent” is a simple term for it. Mr Carter has run off because he does not like hearing this. The fact is that the Crown had a legal obligation to charge a lease based on the valuation of the land. Now we run into the technical and difficult issue of unimproved land value. In fact the high country lessees have taken the issue to arbitration and have won their case which is why we have the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill. 
I do not disagree as I said in my press release with the general principle of the affordability of rents based on the productive capacity of the land but it is hard to establish. In a bad year if a farmer is running just dry stock and beef they might not get very much income at all. If a farmer is running fine merino they might get a slightly better income. If a farmer is running a very profitable tourism operation they might have a very worthwhile operation. How then do we identify the productive capacity of the land? I put it to the House that the answer is something that we will establish through the select committee process. The changes to land use in the high country have been well known and well publicised. In fact they are not limited by what we are doing today. 
The issue of the productive capacity of the land will be difficult to establish. Labour when in Government offered some compensation and some right to negotiate with high country lessees. I went to the Treble Cone ski field spoke to the high country lessee and laid out that offer on behalf of the previous Labour Government. Labour is still committed to that approach but the issue of principle is then about passing on through tenure review or another process the right to have control of that land. If that right is onsold the question is who should then retain the extra value the unrealised value when the rents have been set. Some might call it a super-profit. If we have paid on a productive capacity of say $300000 gross income we will work out our rent accordingly—at 2 percent or whatever the Government will do. But then if that block of land is sold for $10 million or $20 million some would question whether it was of a very low productive capacity and that may be the case. The high country lessees have argued that the valuation should not take on board other values beyond that of productive capacity. 
If we accept that in principle then I would go to the Maori Reserved Land Act which is another piece of legislation passed by a National Government. They then had three kinds of land. There was agricultural commercial and residential land. I have had constituents walk from their homes because they have not been able to afford the increased lease on their leasehold property. Briefly the argument goes like this. The Maori people who own the land have leased it on a 21-year rent review process with perpetual right of renewal just like the high country people but in 1997 the then National Government said that it would change the rules. It said this had been unfair to Maori landowners and it needed to straighten it up. I agreed with that in principle but the lease was based on unimproved land value for the people who had their homes on those properties. When it came to calculating that lease could the valuers identify unimproved land value? No they could not. They were obliged by the Rating Valuations Act to say that the value of that property was equivalent to a freehold property of the same size in the same block and that was what the rent would be charged on. So people in their homes had their leases go up—to quote the Minister—not by hundreds of percent but by thousands of percent and some of them had to walk from their homes. 
Where is the National Government when it comes to affordable leases for those people? Nowhere. If the National Government is to be consistent and if it is to stand on principle and talk about affordability which I believe in then it should do something for Maori reserve lessees. There will be a number of farmers amongst members opposite who know full well what I mean when it comes to some of the Taranaki leases. There are 1000 of the 2000 leases in the electorate that I am now campaigning in so I know a little bit about it. 
The issue of affordability is rejected by the National Government when it comes to State housing rentals. Do those members ask what the tenants in State houses can afford to pay? Well they are doing it for high country lessees and—[ 
Interruption 
]—stop your squawking—I in principle agree with that. But if we are to have—[ 
Interruption 
] 
Mr DEPUTY SPEAKER 
: I ask the member to withdraw that comment. 
Hon Clayton Cosgrove 
: Which one? 
Mr DEPUTY SPEAKER 
: The comment that the member just made to the Government member. The member will withdraw that comment please. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. I would like to know which comment you are talking about. 
Mr DEPUTY SPEAKER 
: The member said a very unparliamentary term and I would like him to withdraw it. 
Hon Clayton Cosgrove 
: Was it “you’re gone”? 
Mr DEPUTY SPEAKER 
: No it was not that one. It was the one following it. 
Hon Clayton Cosgrove 
: Oh “Shut up! You’re gone.” I withdraw. 
Mr DEPUTY SPEAKER 
: I want the member to withdraw and apologise. 
Hon Clayton Cosgrove 
: I withdraw and apologise. 
Hon DAMIEN O’CONNOR 
: I have a passion for the high country too. I have skied there. I have been out in those areas. I have enjoyed time at Molesworth. I have been to Minaret Station. These are iconic spectacular locations. I admire the strength the determination of the people who farm those areas. But times have changed. It is easier now to farm those properties than it was 10 20 or 30 years ago. 
Sandra Goudie 
: Oh rubbish! 
Hon DAMIEN O’CONNOR 
: Oh I wish that member would get off her butt and get out and find out. Now thankfully those farmers use helicopters for mustering. Now we have the aid of mechanical means to get around and that is great. It is a different way of life in the high country now from what it was 20 30 or 50 years ago and that is something we welcome. But there is also a new appreciation of the value of that iconic land. It is appreciated by a lot of foreign investors. They are willing to come and buy and they pay huge amounts of money for land that bears no resemblance to its productive capacity. As long as people are in those areas and farming them looking after them and protecting them as they have done in the past and appreciating and loving that land then we should give them affordable leases. I do not have any problems with that. The question is when that comes to transfer on who gets the right to the excessive valuation above and beyond that of productive capacity? That is the value at which many of those lands are transferred on. The reason that Labour is opposing the bill is that this Government is not consistent when it comes to affordability.