Parker David: Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill — Second Reading 
Parker David: Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill — Second Reading 
[Volume:678;Page:849] 
Hon DAVID PARKER (Labour) 
: 
 I think the Minister for Primary Industries rather unkindly called my speech on the first reading of the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill the politics of envy and other words that were stronger suggesting he disagreed with the contribution I gave in the first reading. Well I am pleased to disagree with the Minister on this because his position on this legislation is without principle. It is without principle. 
I was the Minister for Land Information for the last 3 years of the Labour Government and when I first met with a group of lessees the lessees came to my office and they said: “Don’t force us into tenure review please Minister. Please respect our contractual rights under the lease.” My response to that was “I will not force lessees into tenure review neither will I force the Crown into tenure review outcomes that the Crown does not want and I will respect your rights under the lease and I will enforce the Crown’s rights under the lease.” That is all that we did. All that Labour did was enforce the legal terms of the lease. Of course a lot of the high country farmers did not like that because they are used to National Party Ministers who when it comes round to their turn in power all they do is bow to the will of the lessee rather than protect the lessor’s interests under the lease which it is their duty to enforce. 
These leases were purchased by people who had legal advice. The terms of the leases have as a central tenet that the rent is 2 percent of the land value excluding improvements if paid on time; 2 percent not 10 percent—2 percent. It is 2 percent of the land value excluding improvements if paid on time. These farms have increased in value. Why have they increased in value? Because people do not purchase them only for the pastoral value. The high value properties are on the shores of Lakes Wakatipu Wanaka Ohau Pukaki and Tekapo. They are the highest value properties generally. They are the properties that you see on cake tin lids they are the properties that you see on calendars and they are the properties that you see in photographs promoting New Zealand overseas. When the leases of these properties are sold the purchasers of the leases do not get just the right of pastoralism; they get the right of exclusive occupation of the land. That means they can exclude trespassers which means they can exclude anyone from the land whom they do not want to be there. And they do because increasingly these properties are being purchased for not their pastoral values but their non-pastoral values which relate to exclusive occupation of the land. 
The farmers come along and ask why they should pay a higher rent for a property around Lake Wakatipu that is worth a lot more than a property in the Blenheim region that does not have the same iconic values. That is what they come along and say. The answer to that is why does someone pay more for a section in Remuera than in South Auckland or in Cashmere compared with one in the eastern suburbs. 
Shane Ardern 
: The presumption is the section is for sale. The presumption is it’s for sale. This is not for sale. 
Hon DAVID PARKER 
: OK I will come back to that argument. But there is a difference in the value of these different properties because some of them have more attributes than other properties and people are willing to pay more for those attributes and that is part of the land value excluding improvements. That is something that is intrinsic to the land. 
I was Minister when the Minaret Station 
case started and I was Minister at the time—actually I think the hearing of the case was while I was Minister but the decision came out at the time of the election or shortly thereafter. The Crown Law advice at the time and the Land Information New Zealand advice at the time was that the decision of the Land Valuation Tribunal was wrong and ought to be appealed because it set a wrong principle in law. It actually said if you use the comparison that I was using that Remuera land should for the purposes of rent be the same as South Auckland land which is a nonsense because they are of different worth. 
The rental of 2 percent of land value excluding improvements is affordable by some but not all tenants. We accept that some tenants—and Mr Ardern made the point quite fairly—some lessees are long-term holders and they do not want to sell. They only want to extract pastoral values from the land. They have not purchased it for tens of millions of dollars and they cannot afford a rent that is based on what they might sell it for. They need a rent that is lower than that. The law already allows for that. We do not need this change in the law to achieve that outcome. When I was Minister and enforcing the proper rent in accordance with the law the lessees rose up and said that somehow I was acting improperly in charging the rent of 2 percent of land value excluding improvements. They said it was terribly unfair. I was actually worried about some of those lessees because some of those lessees were under financial pressure and they found this changing of the rent stressful. I wrote to every one of them—every one of them—and not just once; I personally wrote to them twice. I said if there is a case of hardship please come to us and we will do a deal. Sometimes we will ask for something in return for a rent reduction. 
One of the examples I gave in the letter was some wilding pine control. At the moment it is a moot point as to whether wilding pine control has to be carried out by the lessees. Some lessees do not do it. Some lessees even prevent volunteers from going on the land to clear wilding pines. So I thought that that was something in the public interest that I as Minister could extract in return for a rent reduction—either the control of wilding pines or letting someone else do it. It seemed pretty reasonable to me. 
On occasions we have landlocked rivers and lakes. We have landlocked rivers and lakes. I do not have the time to go through why that is the case. Well actually I will digress a little. In respect of the central part of the South Island because the original tenure that was given to those farmers was non-renewable pastoral occupation licences—before we had pastoral leases—there were never proper surveys done of those areas and therefore the Queen’s Chain was never set off around those lakes and rivers. As a consequence of that when the pastoral occupation licences were changed to perpetually renewable leases that issue was never tidied up and it has never been tidied up properly since. Although it is in part being fixed in the renewals of pastoral leases at the moment we have a residual problem in respect of New Zealanders’ being able to have access to some of our rivers and lakes and that is wrong. I think I should be able to and every other New Zealander should be able to access our rivers and lakes. So one of the other things we said was that if you have rivers and lakes that people have not got access to and you want a rent reduction we will negotiate access through your property—not wandering at will but access ways through your property—to those lakes and rivers. The farmers decided that what they would do was get out their union book run the farming union and actually vote as a block and not one of them would take that offer of a rent discount. They decided to wait out the term of the Government—because we were obviously coming towards the end of our term in Government—and renegotiate with the National Government. And that is what they did. They stonewalled and then they came to the Government and they said: “We can never afford to pay this rent.” 
Do you know who the discounts are being given to? The discounts are being given to in some cases people who paid $10 million for their land knowing that the rent was 2 percent of the land value excluding improvements. Some of these people are good people. In fact all of these people to my knowledge are good people. But they do include people like the partner of Shania Twain—and I will not name him. He is doing some wonderful things to look after the land but he did not buy it on the basis that he should have a discount on his rent of 2 percent of the land value excluding improvements. He paid $10 million or $5 million for his farm knowing that the full rent was payable. This Government is giving that multimillionaire who paid that price for the land a rent discount when he did not ask for it and did not need it. This is ridiculous. And this is a Government that is running a $12 billion deficit. 
These decreases in rent are unprincipled. This has opened Pandora’s box. We have given the warning before that if you interfere in these contractual relations in this way a future Government can do the same and will—and will. I make the point that it will because it should. I will give you other examples. There is nothing wrong with fractionised ownership of these stations but increasingly these stations are owned by a wide range of people who are very wealthy people and they are effectively a time-share; that is what they effectively are. They are a giant time-share and those people get a rent discount too despite the fact that they have not asked for it and despite the fact that they do not need it. 
This is bad legislation. The rents should be 2 percent of the land value excluding improvements with discounts for those who cannot afford to pay.