Mallard Trevor: Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill — Third Reading 
Text is incorporated into the Bound Volume 
Mallard Trevor: Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill — Third Reading 
[Sitting date: 02 May 2012. Volume:679;Page:1910. Text is incorporated into the Bound Volume.] 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 Yes I understand that the Greens are going to take 5 minutes and I will take a 4-minute bell thank you if I get that far.  
This is an issue that I think has been fraught. There has been a disproportionate amount of time spent on this legislation and on Crown pastoral rents over the period of the last 10 years or so at least. Certainly in the time that I was in Cabinet there was far more time spent on it and trying to get this one sorted was one of those Solomon-type issues. But my view is that the Government has now come down with the wrong decision. Currently the rent for the properties is set at a relatively low 2 percent excluding improvements. The Government is proposing to cut this further and thereby transfer the value to the lessees making it easier for them to freehold the properties and to onsell if they so wish part or all of the farm and make some windfall profits. I think the Primary Production Committee has seen the evidence of that. Of the 77 runs that completed tenure review at least 28 of the new landholders have onsold 176 parcels of the newly freeholded land. These 28 new owners paid the Crown $6.9 million to freehold and they have realised $134 million through selling only 44 percent of the freeholded land.  
What is clear is that there is a reduction in income at a time when the Government is telling us it is short of cash—and I agree that it is short of cash. Giving rent reductions to farmers below a 2 percent level I think is a waste or revenue forgone that could be better used. But also there is a wealth transfer without a proper capital gains tax arrangement unless these gains can be absolutely proven to be trading gains and I think you would probably have trouble proving that some farmers have been involved—their families—in farming for 100 years. I think any trading tax we would have trouble applying under current law although hopefully at some stage in the future we will be able to get this sorted. 
What we are doing here is sacrificing the right of the Crown to extract fair value from the property. What that does is short-change the New Zealand taxpayer. It is something that we should not be doing. I will go back to where I started and say that the issue is not a simple one. Getting it right getting it fair and making sure that we do the best we can to maintain the values as we do of many of these properties is something that is hard. What we do know is that when they are freeholded or even the properties that are close by are because of their exceptional views because they are very special places—I note that Nick Smith is in the House. I know he knows the St James Station well. He has cycled through there I think on at least a couple of occasions. He had a press conference I think halfway through one. [ 
Interruption 
] Oh he did not have it. He finished the ride an hour behind me without having a press conference on that particular occasion. I think it was when I weighed about 20 kilograms—I did not quite weigh what you weigh Mr Deputy Speaker—more than I do and more than Nick Smith. But I think Nick Smith would agree that these places are very special and we have got to handle them carefully. It is my view that this approach to their privatisation is one that is wrong and therefore Labour is going to oppose it.