Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill

I am happy to take a short and slightly unexpected call on this bill, the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill. I am very happy to fill the void while Mr Damien O’Connor makes his way down to the Chamber.

I listened quite carefully to the second reading speeches on this bill, and I listened to the justifications put forward by the Government for this piece of legislation. According to subclause (1) of clause 23A, “Purpose of this Part”, which is set out in the new Part 1A to be inserted in the Crown Pastoral Land Act by clause 6, the legislation establishes “a framework for specifying an efficient, predictable, and objective process to set rents for pastoral leases based on—(a) the productive capacity of the land when used for pastoral farming; and (b) the earnings available from that productive capacity.” I sat there listening to the Ministers putting forward the case that it should be based on the income that could be generated from the land and that that, therefore, is what the rent should be based on. I thought: “Well, where have we heard that before, and where might there be some similarities?”, and then I thought: “This is actually income-related rentals for sheep.”

What this bill effectively amounts to is an income-related rental for the sheep. I thought: “Well, this is kind of an interesting approach for the National Government to take”—income-related rents for sheep—“when it is so opposed to income-related rents for human beings.” The more I went through it, the more I thought that that was quite rich coming from National members. They are saying that the rent that the owner of the sheep has to pay should be based on the potential income, but that when it comes to human beings, the rent that they have to pay should not be based at all on their income and that they should be paying market-related rents. So if market-related rents, according to the National Government, are good enough for human beings, why are market-related rents not good enough for the sheep?

I think that sort of sums up why Labour is opposing this legislation. We are opposing this bill because it severely compromises the Crown’s right to negotiate fair rents for the high country land that it owns, and it instead offers a select few farmers special privileges. I guess we should not be surprised about that, coming from this National Government, because it is all about offering the advantages of the State to a select few rather than to the many.

💬 Andrew Little: It’s called cronyism.

It is called cronyism, as my colleague and friend Andrew Little has pointed out, but that is what this Government is all about. It is income-related rents for sheep, but not income-related rents for human beings.

By sacrificing the right of the Crown to extract fair value from its property, this bill short-changes the New Zealand taxpayer in order to offer a sweetheart deal to the select few wealthy farmers. Once again, this is a pattern of behaviour that we are seeing from this National Government, which is interested in supporting its mates and supporting a select few rather than the many; although it is supporting the many sheep that will be on these high country farms, I have to say. It is not supporting the many people who live in the houses that it thinks they should be paying market rents for, but it is willing to offer income-related rentals for the sheep on high country land.

Rent for these properties is already set at a very low 2 percent excluding improvements. By cutting this further, the Government will be forgoing potential revenue that it could put towards much-needed protection for our fragile high country environment. I think everyone around the Chamber would agree that we have some amazing high country environment in New Zealand. I can see Shane Ardern nodding over there. I think he would agree that it needs to be protected. So why is the Government compromising its ability to generate revenue that could be put to that purpose by, effectively, introducing these income-related rents for sheep? That is what this bill, of course, does.

Farmers will be able to capitalise on these new low rentals in the sale price of their leases, so they will basically get a windfall gain from this. Farmers who have current leases, whose leases are going to go down, will get a windfall gain when they onsell that lease to somebody else. Once again, we see the Government legislating—legislating—through the House to benefit a select new group of people, but that once again fits the pattern of its behaviour.

Where genuine hardship can be established, the Labour Party does support the principle of income-related rents. We support it for human beings, so we would support income-related rentals for sheep where genuine hardship can be established, but many of these farmers are multimillionaires. They are very, very wealthy people. Their properties can be worth up to $10 million. They do not need any more special privilege from this Government, which is all about advantaging privileged people.

Why is it good enough for multimillion-dollar farmers to have income-related rents for their sheep, but the Government is not willing to stand by income-related rents for very constrained low-income New Zealand human beings? It does not agree with that. It is here today championing income-related rents for the sheep, but it is not willing to stand up and put quite so much gusto into supporting the very same for human beings, and that is something that the Labour Party is very passionate about.

Labour has laid bare its attitude to high country farmers. It started earlier on in this debate on the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill. In fact, it started in the previous term of Parliament, and the one before that under a Labour Government, when the then Minister David Parker decided to punish high country farmers because he simply did not like them. In return, they did not like him, so that was a fair deal, in my view. He simply did not like them, so, in order to please his then boss, Helen Clark, he decided he would rent them off the land. The excuse that he used at the time was that the sheep that happened to be grazing on the shores of Lake Wānaka or Lake Waitaki had a particularly splendid view as they were grazing away, and therefore the farmers needed to pay for that with a huge increase in rent.

But it was more than that. It was not just the fact that David Parker was trying to please his then boss—not that it did either of them any good—by ratcheting up the rents. He was also there to punish the high country farmers, because, as has been said time and time again in this debate and in previous debates, Labour does not like farmers. Labour hates farmers, but I will tell you what it hates even more than farmers: it hates high country farmers. Do you know how I know that for a fact? It is because Labour members describe them—and we heard it here yet again today—as the privileged few, those high country farmers. Those of us who actually get down to the South Island and know what it is like in the high country know that that absolutely could not be further from the truth.

These are the hard-working farmers of New Zealand, who—what—80, 90, 100 years ago took over the land by way of a Crown pastoral lease because it was rabbit-ridden, it was Hieracium-ridden, and nobody wanted it. So what happened? The Crown of the day offered those high country leases to farmers because nobody else wanted them. What did those farmers do with that land? They improved it. Those farmers over successive generations have put their hearts and souls into the high country. What have they done? They have reduced the rabbit numbers, and they have turned what was high country rubbish land into productive land for New Zealand to the extent where the merino clip is now world-renowned and we have high performing businesses in New Zealand like Icebreaker and Mihi Merino, the products of which are in demand all around the world. So those “privileged few”—those were the words from the previous speaker, I do not know, the little redhead over there. Saying the “privileged few” says it all. Raymond Huo, that well-known Labour list MP, I think, referred to high country farmers as the privileged few, so the attitude is pretty widespread amongst Labour.

As for David Parker’s contribution to the speeches a couple of weeks ago, he said that where farmers could show genuine hardship in the rents that were to be set by the Labour Government they could go cap in hand to him. What a generous guy! The high country farmers, if they could prove genuine hardship because of the unreasonable rents that he was putting on them, could go cap in hand to him. What kind of a Government does that? The kind of Government, I would suggest, that is a Labour Government that hates farmers.

I do kind of feel sorry for the high country farmers, who I know will be following this debate on the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill very, very carefully. Criticism that, unfortunately, might come from this side of the Chamber is not of them individually at all, but it is of the situation that National is creating here. I do not think any one of those proud people would want to think that they are getting a subsidy—

💬 Andrew Little: Special favour.

—or special favour, or have to go cap in hand as the previous speaker, Jacqui Dean, said. In fact, the cap in hand approach is exactly what has happened here, because there have been claims that the new rents would be unaffordable—that is, the new rents are those calculated on what would normally be seen as a fair commercial basis on the valuation of the land, and at a percentage that the market generally accepts at around 4 or 5 percent. We know for some of those properties, and we acknowledged in Government, that that was a huge increase and it would create a big cost impost on the farmers, and we committed, as Labour, to work through those situations. But what we have here—and, unfortunately, the high country people will have to listen to this argument for quite some time—is an income-based rental that every lessee would love to have. In fact, I apologise for being late in the Chamber because I was meeting with people from the kiwifruit industry. My, would those growers love to have an income-based rental on their properties that they are leasing—my, they would! We could go back and read from Hansard the vitriolic criticism of us when we tried to implement income-based rentals for people who wanted to have a home.

So, although I apologise to the high country farmers for being drawn into this debate and for all the words that will go backwards and forwards, the fact is—and I have said this up front to them—I support them absolutely. They are a special breed of people who are prepared to live in isolated situations and commit to hard work in harsh environments. Not many New Zealanders want to do that these days. But there are many New Zealanders in hard times, facing big challenges, and many would like a break, whether it be an income-based rental or some other form of support. But what we are doing here—when you compare the bill with conventions across all legislation we pass in this House—is setting up something that will not hold water when you compare it with a lot of other things.

If we are going to go down the path of income-based rentals—as I say, Labour is committed to that in housing; a basic area of need—we might end up having to look at that in the area of water charging for domestic supply, for a start, if people cannot afford it. And maybe some in the agricultural sector will be back before us here saying they cannot afford the water to run their stock or irrigation. Who knows? But under a ridiculous market-based scenario, which I am sure this National Government will want to put in place around water, the value of it could get to unaffordable levels for people who want basic water. And they may come back with a request, just like in the high country situation, for an income-based rental because they cannot afford it. There might be an argument, and with the passage of this bill there will be a precedent, so I expect now that Parliament will be bombarded with requests in relation to Government responsibility, where income-based levies, income-based taxes, or income-based charges will be requested. And it is a perfectly reasonable request given that we are putting this piece of legislation in place.

Part 1 of the bill contains interpretations and definitions. Some of them are really difficult, such as “base carrying capacity”. That is the number of stock you can carry on a bit of land. Of course, it is supposed to be a bit of land before any Māori or European came to the land—unimproved land value, or land exclusive of improvements. Well, I do not know how we are going to calculate that. Part 1A goes through this complex system of trying to redefine land exclusive of improvements, when the valuation system had moved beyond that to, basically, a position of market value. The Māori Reserved Land Bill—now the Act—shifted from unimproved land value to, effectively, market value to give the Māori landowners a fair return on their assets. I think that was a reasonable outcome. It has caused a lot of angst and pain for many homeowners, and I think the lessors needed to take a kind approach, and they have done in some cases and not in others—the point being that valuation had shifted from unimproved land value to one of market value, and we are turning that on its ear once again.

We are trying to define the base carrying capacity—how many sheep the land could have held in the year 1650. We are led to believe that not much changed before we came along, as I am sure the Green Party will advocate, so I guess the number of sheep that that property could carry in 1650 would be the base carrying capacity. Then we move forward to the current carrying capacity of the land, and we use a formula with a factor to incorporate 0.15 of the difference between those two capacities. It is a nightmare, quite frankly, a mathematical nightmare. It then incorporates, as defined in new Part 1A, inserted by clause 6, a dollar-per-stock unit value. Well, the member over there with the big smile on his face, Colin King, the ex-member of Meat and Wool New Zealand, would know that those values vary quite a lot between different stock types and between different years of production for a whole lot of reasons—bizarre, most of them—usually on what the meat company might want to pay. The point is that there is huge variability in this, and the Government is attempting to put in place a sound, steady, and reliable system for calculating lease payments that, in my view, is totally and absolutely flawed.

What Labour had done in Government was realise that values of the land had gone up, and if we were to maintain consistency through valuation, yes, the lease payments went up. We said that where they clearly were ridiculous or unaffordable, then we needed to sit down and work through that. But shifting the precedent of land valuation and shifting the precedent of lease calculation is a very dangerous move. Although members over there might say that this is a very special case—and it is unique land; I accept that—unfortunately, most people on leasehold properties will consider that they have special cases. The Zespri kiwifruit growers are those people at the moment who are facing huge problems and challenges and who would, I am sure, like a break so that they could have affordable lease arrangements. This is not good law, and that is why there is going to be robust debate. I do support—and Labour supports—the ongoing wise management of the high country. But this bill is not necessarily going to help in moving in that direction.

It is always a privilege and a pleasure to follow on from the member for West Coast - Tasman. But I need to back up a little bit and recap some of the comments made by some of his colleagues prior to his contribution.

The member from the other side of the House who spoke immediately prior to the Hon Damien O’Connor, Chris Hipkins, can be excused for being very young and very ignorant on this matter, but he overwhelmingly demonstrated the philosophical divide between those on that side of the House and those on this side.

💬 Hon Member: I think we might be closer to that member than a number of his colleagues.

At least the Hon Damien O’Connor tried to bring something credible to the argument, but the member over there who is interjecting also demonstrates the philosophical divide. There is a belief that there is a group of farmers in the high country who are rich, privileged, and not deserving of recognition by the State for the 6 million merinos they farm and the hundreds of millions of dollars’ worth of export earnings they produce for New Zealand.

💬 Hon Trevor Mallard: On public land that they hardly pay for.

Well, there you go! The member over there says it is public land. Let us test that. Let us just test that for a moment.

When the Labour Government was in power, with that member as a Minister, it paid well and truly over the odds for Birchwood Station and St James Station, and actually set the precedent. It said that the value of the lease was worth nothing, effectively—or the value of the lease was worth millions, but the value of the freehold part of it, the State part of it, was worth nothing. Because if the value that the State had set was as high as that member would have us believe now, why did it pay so much to get them? Why did the Labour Government pay so much to secure land it already owned? Why did it pay so much to secure land it already owned? Let us just put that to one side for a moment, just park that for a moment.

The Hon Damien O’Connor made some interesting points. He is the only member so far from that side to have made a reasonable contribution. He made some interesting points, and the points are this: what is the value of the unimproved value, and how does the Government set a fair and equitable lease for those who are farming this land? The reality is that the only way the Government can set those leases is that it must be bankable, it must bring certainty. Just look at the track record of the previous Government. Currently, 113 leases are before the Land Valuation Tribunal. What does that say? What would you read from that? Would you suggest that it has brought about certainty, has brought about security of tenure, has brought about protection of the high country, and has brought about protection of the iconic values? No, what that suggests is that the current situation was unsustainable—

💬 Colin King: Untenable.

—and something had to happen. It was certainly untenable, that is for sure.

The Hon Damien O’Connor would have a point, if the land were ever going to be sold. But both major parties in the House have said that they have no intention of selling Department of Conservation or State-owned land at this point, particularly high country and iconic land. All they want to do—on both sides of the Parliament, apparently, but clearly not evident from the exercise that we have been through with the previous Government—is to secure a viable and long-term secure proposition for those who farm this land.

Let us just have a look at those people. They are not this rich group of vandals, as described by previous speakers. They are hard-working people, often living in very isolated areas, often substantial contributors to their wider community, and, generally speaking, very, very honest and upstanding citizens. To listen to the Labour Party on the other side, and to those who have spoken in this debate, these farmers would be the biggest villains that the country has ever seen. I just wish that some of those members would actually travel to some of these stations—occasionally—and have a look at what is involved in running these high country stations.

I also wish that they would actually back up their rhetoric with some facts, and so far we have seen none of that. What we have seen is some kind of imaginary comparison with State houses. Well, State houses are bought and sold by successive Governments, both Labour and National, all the time. There is clearly a market value. There is clearly a house on the street next door that is for sale, of a similar type, and that has a market value that you can set the value by. There is clearly a true market. Try to explain to me, if you will, the true market of the high country leases. To suggest that these farmers should pay some amenity value because they have an iconic hillside that looks over Lake Wānaka, or some other such, like the Remarkables, and their sheep will somehow grow more wool, because it is primarily wool that they produce, and that that somehow would give a higher return because of its location, is about as “Labour-ish” as it is possible to be, and as socialist as it is possible to be. I suggest that they need to take a good look at themselves.

There is no true market. Unimproved value will become more and more difficult to establish, as time goes on. You cannot put a peg in the ground and say: “This is the true value.” There is no market. In fact, the only market that we have got to measure by is the market that the Labour Party itself entered into with the purchase of Birchwood Station and the purchase of St James Station. Clearly, Labour put such a high value on the lease and no value at all on the land—zero value—because it paid five and six times above what the per-stock unit value of a normal or comparative farming operation would be to secure those properties, and Labour itself devalued what the Crown’s share was in this high country.

I suspect that as this bill passes through the Parliament there will be all this hot air from a group of people who are totally ignorant of the circumstances that we face here. I look forward to the passage of the bill. Thank you.

I am intrigued by the comments of the previous speaker, Shane Ardern, and the lambasting of the previous Labour Government for a very visionary purchase on a “willing buyer, willing seller” basis of both the Birchwood Station and the St James Station. They have been major additions to the conservation estate, and the fact that they are now in full Crown ownership means that we can, as members of the public, go mountain biking, go tramping, and go walking all over those properties. The only problem with the Birchwood purchase was that the funds that the lessee gained were then used to intensify dairying in the Otago Basin south of Twizel.

Moving to the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill, I note that a 2009 Cabinet minute records the National Government’s objectives for Crown pastoral land. One of these is effective stewardship of Crown pastoral land, and that was defined in the minute as: “Ecologically sustainable management is promoted.” But Parts 1 and 1A of this bill are a missed opportunity to promote ecologically sustainable management through the renting-setting process.

Given that the bill, as others have alluded, makes a fundamental change in the way in which valuation and rents are set in the high country, it would have been much better to have used the opportunity the bill provided to look at the rules for how base carrying capacity is defined. At the moment the bill provides that these rules can be developed using scientific information that is predictive of the base carrying capacity, and information about the land. The bill does not provide for any requirement to consider ecological limits in establishing either the base or the current carrying capacity of the pastoral lease.

Over the last 150 years the combined impacts of burning, grazing of both stock and rabbits, and the spread of weeds such as broom have dramatically changed the indigenous vegetation on our high country lands. Wetlands have been drained, shrub-lands have been burnt, and tussock grasslands have been converted to pasture. The health of what remains depends on the management regime adopted by the lessee, the number of stock, and whether those lessees recognise matagouri as a valuable shelter for stock during lambing, whether they recognise its value as a nitrogen-fixer, or whether they just regard it as a woody weed.

If the Government was actually serious about promoting effective stewardship of high country lands, it would have included clear criteria in Part 1, the definition clause, and new Part 1A, in which the bill would require some ecological assessment to be part of calculating the rentals and calculating what actually constitutes current carrying capacity. Those assessment criteria would have included matters such as the health and condition of indigenous vegetation, whether wetlands were fenced or stock had access and could degrade them, and whether broom or other weeds were extensive on the property.

High country pastoral lease lands in the uplands provide critical ecosystem services values. Research by Professor Sir Alan Mark and others in the Otago uplands has highlighted just how important tussock grasslands are in maximising water yield. That is because the very long fine foliage of snow tussock plants can collect fog droplets much more effectively than exotic vegetation such as grasses and pines. This, combined with the very low evapotranspiration of snow tussocks, means that less water returns to the atmosphere, and there is more water that can seep, trickle, and flow downstream when you have got tussock grassland cover in the uplands, rather than pasture grass or pine trees. We all know how valuable water is in the eastern South Island, and how highly contested it is. If we maximise the health of our snow tussock grasslands in the uplands, we can then maximise the amount of water that is available down catchment, both for fish and birds, and also for other users.

Therefore, it is very disappointing that this bill fails to recognise the ecosystem services role of tussock grasslands and their role in harvesting fog and rain, and the fact that the bill, neither in Part 1 nor in new Part 1A, includes any requirement that there be an ecological assessment to determine what constitutes current carrying capacity. If that was in there, it would ensure that the number of stock that the pastoral lease could carry had some regard to what the land could actually sustain.

The words in new clause 23A are very general. There is a reference to scientific information, and information about the land. If it was the Government’s intention that those very general words did include an ecological assessment contributing to the establishment of current carrying capacity, we would welcome some elucidation from the Minister about that. Thank you.

It is regrettable, because the Minister who is responsible for this particular bill—the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill—the Hon Maurice Williamson, is not in the chair, and I do acknowledge the Minister—

The CHAIRPERSON (Eric Roy): No, no. I know what the member is saying, but he needs to be a little bit more careful about how he is saying it. He did say that the Minister is not in the chair, and, by implication, that is saying that he is not in the Chamber. So I just ask him to be a bit cautious about how he actually does that.

💬 Hon Trevor Mallard: Because if he’s in the Chamber, he’s got to be in the chair.

The CHAIRPERSON (Eric Roy): Yes.

I say that it is regrettable because I really wanted to ask him to correct the misleading statements made by some of his colleagues—well, at least one of them.

💬 Hon Trevor Mallard: He would correct the member over there.

It is very important for him to do so, because that would affect the credibility of the National Party, simply because—

💬 Hon Amy Adams: Ha, ha!

Do you think it is funny? I do not think it is funny. In light of the contribution made by Jacqui Dean, I think it is appropriate for me to restructure my contribution, because she repeated some of the misleading statements she made during the general debate in the last sitting week. She accused the New Zealand Labour Party or anyone who was opposed to this particular bill of being anti-farmer or practising the politics of envy.

💬 Jacqui Dean: I’m sorry I hurt your feelings, but it’s true.

Well, that member will be able to confirm to this Committee that this particular bill affects only the high country Crown-owned pastoral leasehold properties. How many farms will this particular bill be affecting?

💬 Jacqui Dean: 220.

Yes, fewer than 220, and that member is accusing the Labour Party or anyone who is opposed to this bill of being anti-farmer. This bill has got nothing to do with the New Zealand farming industry at large. This bill has got nothing to do with the productivity or business efficacy of our dairy farming sector at large.

As I said, I think it is very appropriate for me to restructure my contribution in light of the statements made by Jacqui Dean. Miss Jacqui Dean, let us have a look at a Parliamentary Commissioner for the Environment’s report of 2009. That report was entitled Change in the high country: Environmental stewardship and tenure review. It questions the methodology of the current tenure review process and makes a number of recommendations. The Parliamentary Commissioner for the Environment proposed setting up a high country commission to provide more oversight of the high country. She also suggested a greater use of private covenants to protect biodiversity on Crown pastoral leases. Miss Jacqui Dean, could you please confirm to me and this Committee whether that makes the Parliamentary Commissioner for the Environment anti-farmers.

Let us have a look at the Royal Forest and Bird Protection Society position. The Royal Forest and Bird Protection Society approves of a number of initiatives provided by this bill, but it does have a problem with lower rentals due to tenure review negotiations and the missed opportunity to put in place economic instruments that could benefit conservation values. I am sure that my Green colleagues will agree with me. To avoid any doubt I have a direct quote: “Why is the rental being simply constructed around base pastoral farming earning value when, in reality, it is an economic pricing instrument that the Government could be using to encourage good practice on pastoral lands? For example, it would be possible to have a higher base rental for a pastoral lease that added to conservation activity, such as pest and weed control or improved public access, then provide an environmental rebate for this work.” Does that make the Royal Forest and Bird Protection Society anti-farmers?

💬 Shane Ardern: Yes.

Great! Thank you for your confirmation. For the information of that member, this concept of encouraging—[Interruption] Thank you, Mr Chairperson. Good call. I know that Mr Chairperson is very tolerant.

💬 Jacqui Dean: The member is not speaking. I raise a point of order, Mr Chairperson.

The CHAIRPERSON (Eric Roy): I am listening very carefully to your point of order.

💬 Jacqui Dean: Thank you. I sought the call, because the member who was given the call clearly had yielded it to me by not saying anything.

The CHAIRPERSON (Eric Roy): No, he had not. I am the one who determines who has the call, and I have given it to Mr Raymond Huo. I look forward to his continuing.

We have a very good Chairperson. I apologise for my remarks. For the information of the member, Labour loves farming and Labour loves farmers. Labour does support farming sectors at large, and we support productivity and business efficacy, which is not and will not be in any way covered in this particular bill.

This concept of encouraging good behaviour through economic instruments is not new. In fact, Professor Anton Meister at Massey University was advocating this initiative 20 years ago. I am not quite sure whether the member Miss Jacqui Dean has ever read this book I have here, by Dr Ann Brower. Have you ever read that book? I respect Dr Brower simply because she states that as an academic her allegiance is to scholarship, theory, and the letter of the law, and not to interested groups. Should not that allegiance be our allegiance, as well? Absolutely, plus accountability and responsibility to the voters, to taxpayers, and to New Zealand, not to the small number of farms affected by this bill.

To be fair to those who feel very strongly about Dr Ann Brower’s view, or who feel strongly against her view, I would like to note the views of Professor Lewis Evans and Professor Neil Quigley, as well. Dr Brower, in her 2006 report, observed that the leaseholders are receiving both freehold land and cash payments from the Crown as outcomes of the tenure review process, but the High Country Accord requested the two professors to review the assumptions, methodology, and conclusions. As a result of their review, they have concluded that Dr Brower’s concerns resulted from “a series of conceptual and technical errors in the interpretation of pastoral lease rights, the Tenure Review process and data relating to its outcomes”. The reason why I quote those different views is to show how to have a robust debate rather than presenting misleading or mendacious statements, which is not helpful.

That brings me to another point. I think the Minister responsible for this bill got pretty much all the factors right, but he ignored just one important factor, and that is non-pastoral values. What this bill seeks to achieve is to change the rules for setting rents for pastoral leases. The rents will be determined purely on the stock-carrying capacity of the land and not on the value of the property or the non-pastoral values that these Crown-owned pastoral leases of properties are increasingly purchased for. That is the very important point that I wish to bring to the attention of this Committee.

Miss Jacqui Dean also touched upon hardship. What I can confirm is that the current rent is set relatively low, at 2 percent of the land value. In addition, there is a mechanism to reduce rents in cases of hardship, but none of the farmers has ever applied for a discount. So can that member confirm to me the reason why cases of hardship have not applied for a discount?

The other factor I really want to touch upon that I feel very strongly about is the Maori Reserved Land Amendment Act 1997.

I am happy to follow on from that well-known farmer-hater Raymond Huo, demonstrating once again—

💬 Hon Trevor Mallard: I raise a point of order, Mr Chairperson. I take offence at that. People in a debate have a bit of a jocular back and forth, but characterising people on this side of the House as people who hate farmers, when it is patently untrue, will lead to disorder.

The CHAIRPERSON (Eric Roy): I have tolerated the term in the general sense, and I think to direct it to an individual is further than I am prepared to tolerate so I just ask the member to desist.

I want to follow on from that Labour member’s contribution, that Labour member who represents a party that clearly hates farmers, by its members’ comments not only in this debate but also in other aspects of when they were in Government and what they promised to do should, God forbid, they ever take the Treasury benches again, which I sincerely hope they do not.

But I want to pick up the point that the previous speaker made about Parliamentary Commissioner for the Environment Jan Wright’s report into stewardship of the high country, which actually I was reading just this afternoon. I want to pick up on her recommendations.

💬 Hon Shane Jones: What section is that? What part? What part is that? Whereabouts in the bill?

I think it was—well, I am talking about another report. There is yet another Labour member who does not bother to follow the debate. I am referring at the moment, and I will say this fairly slowly, to the report of the Parliamentary Commissioner for the Environment into stewardship of the high country, where she made a number of recommendations, which were referred to by the previous speaker Mr Huo.

The point that the previous speaker made was that one of the recommendations that the Parliamentary Commissioner for the Environment made was that the Government set up a high country commission. I see value in that. I see a high country commission as being able to look at the high country as a whole, because there are a number of aspects to high country farming that are critical to New Zealand; we know that. We know that high country farmers are good stewards of the land. We know that high country farmers have been farming sustainably for 120 years, in the same family in some circumstances. Those high country farmers are inordinately proud of the fact that they have taken rabbit-infested, unwanted Crown land and turned it into a productive unit. So we understand the productive value of the high country.

Those farmers also understand the environmental aspects of what they do. In fact, they have a very close association with, and interest in, maintaining the sustainability of their farming operations. Ask any farmer in New Zealand—if only those members were aware of that, and they are clearly not—what sustainable farming means. That means improving the environment. I think that high country farmers have an incredibly clear focus on doing that. I can think of a number of initiatives by high country farmers where they are very keen—

💬 Hon Member: Name them.

On Balmoral Station. They are very keen on establishing Queen Elizabeth the Second National Trust covenants to protect biodiversity elements. That is something that the Greens also have failed to recognise.

So, yes, the Parliamentary Commissioner for the Environment made a number of recommendations in her report on sustainable use of the high country. One of those was, interestingly, that tenure review should continue. I do not think the member perhaps got to that part of the report, but it is important to remember that.

Kia ora, Mr Chair. I shall endeavour to bring some relevance back to the debate, after those contributions. I come from an area where the tail of the fish is very narrow. We have only the sand dunes of Ninety Mile Beach to compare with these alpine, majestic, free-rider gifts that we are giving to a narrow caste of New Zealanders in the South Island. So, naturally, as my colleagues have said, Labour does not support the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill.

I am going to direct Jacqui Dean and her colleagues to section 23J, in clause 6. There are those who have been concerned about the elements that we are arguing for on our side of the Chamber, which we think give a fair return in terms of the owner of the property right—i.e., the great unwashed, otherwise known as the Crown; otherwise known as the rats and mice of New Zealand society—i.e., members of Parliament—we their proxies. We not only have been concerned about the inadequacy of that—and there are two areas that I want to focus on—but it is very difficult for an upset or jilted party to actually turn over the power policy underlying these decisions, which actually gifts far too much of the public estate to this group of property rights- holders. That is our essential argument.

We know that you can test—as the Government has learnt in the ill-fated Crafar farm transaction—the legitimacy of the process. You can test the robustness of the thinking in so far as whether you are sticking to the black-letter meaning of the law. That lies here. The High Court must determine in terms of a question of law, but it cannot stray into those areas that Parliament this afternoon has the ability to fix up. Parliament has the ability to introduce something that gives a fairer return to the taxpayer, who via the State, via the Minister, via the apparatus of the Commissioner of Crown Lands, etc., is the owner. For as long as we are not going to do this, we are gifting far too much. I can think of only one way that the public might recapture some of that value, in the event that they do go and sell. As a consequence of this very generous level of calculation, we will probably capture it in our capital gains tax policy after the next election. I can see that that is the only way that the public will enjoy the opportunity of recovering a small part of what has been gifted to this group of people. That, unfortunately, lies in the hands of the electors. They may or may not breathe life into that policy. We certainly are keeping it warm.

💬 Hon Member: They will.

They will. The man is very prescient. The man behind me is very prescient. He can see well into the future.

Given that this is a free-ranging debate, kind of, on Part 1, this piece of legislation, as you would know—I am directing this to the great Taranaki farmer and inheritor of fine Mount Egmont intellect. He basks in the history of Inglewood, New Plymouth; we, of course, think of Ngāmotu, Taranaki. But that is another matter. I direct his attention to section 23N, in clause 6, where this bill—and this happens all the time—operationalises the ability of the Governor-General, upon advice from the Minister through the Executive Council, to pass regulation. That is why this side of the Committee is constantly reminding participants in the debate that that is where the real damage will be done: a level of subordinate legislation, which we fear will not be subject to wide scrutiny.

A consequence of a very cosy relationship and far too much focus—far too much focus—on a narrow range of interests sees this massive vista, this fantastic part of our national identity and national estate, disappearing out of public into private. That is a fair ideological debate to have, and part of the machinery that makes that happen is not only regulation-making power but also the quality of our contributions this afternoon.

I ask the Minister in the chair, Amy Adams, how, when you are running a $12 billion deficit, you can justify giving a rent discount to everyone? Some of the people have not asked for it, some of them do not need it, and just about all of them purchased under a statutory lease, which clearly set out in law that the lessor was entitled to be paid rent at the rate of 2 percent of land value excluding improvements—hardly an extortionate rate. Two percent of the land value excluding improvements has been the rent for many, many, many decades

💬 Andrew Little: Very reasonable

Very reasonable rent. There was a report carried out—I think it was in the 1970s or 1980s—called the Clayton report, and it was chaired by Mr Clayton. That report said what was logical: if you give a discount for rents, what you do is you increase the capital value of the lessee’s interest in the property because you decrease the value of the lessor’s interest—the Crown’s interest—and you increase the value of the lessee’s interest. This changes the balance of the division of value between the lessor and the lessee in favour of the lessee.

I want the Minister to explain why it is necessary to give discounts to those people—multimillionaires in some cases—who purchase these properties not just for their pastoral values but to gain the exclusive use and possession of those lands and for the ability to use these properties as, effectively, large holiday home properties in some cases. Why should those people get a rent discount? There is no logic behind it. Where is the justification for that at any time? Where is the justification for that when you are running a $12 billion deficit?

Why did the Crown not use its proper powers of negotiation, if people want a rent discount, to extract some of the values that it ought to be extracting on behalf of the lessor where lessees do need a rent discount? We concede that in some cases these rents are unaffordable for people who are extracting only pastoral values. What could the Minister have extracted? Well, the Minister could say: “We want to protect access to some of our landlocked rivers and lakes.” It is an outrage that New Zealanders do not have access to some of their own rivers and lakes, but the landlocked areas could have been fixed through negotiations around rent discounts.

What about some of the wilding pines that are marching across the high country? Most farmers are very responsible; some farmers are not and refuse to carry out wilding pine control. It is a moot point whether it is necessary under the lease. Why does the Crown, in return for a rent discount, not clear that up and make sure the wilding pine work can—

💬 Shane Ardern: Because the Crown doesn’t do it on its own land.

What is that?

💬 Shane Ardern: The Crown doesn’t do it on its own land.

The Crown does not do it on all its own land; it does it on some of it. Some of these lessees should be doing that and are not. Why does the Crown not negotiate some other things, like environmental benefits or the retirement of a little part of the land that is not important to the farm? Lots of things could be done in return for a rent discount.

The other point of principle that I will address is to ask why lessees think that they can come along to the Crown and say “Please respect our rights.” and then go to the next Government and say “Please change our rights to the benefit of the lessee.”, but never expect that there will be reverse action in the future by a future Government. I have got to say that it is incredibly naive to think that you can interfere with the legal rights of these statutory leases and their contractual rights, the terms of which are set out in a statutory lease. If you start interfering with it for the benefit of one side of the transaction, as is occurring here, you can bet your bottom dollar that a future Government is going to do it in another way. I am not sure that is a good precedent for these lessees to be agreeing to. This bill has long-term consequences for them that would otherwise have been avoided had they just stuck with the original form of the lease and paid their 2 percent of the land value, excluding improvements. Now we have this fiction that people should pay the same rent for a good property around a lakeside, which people are buying because it is a cake tin lid or calendar property with a high value, even though it is a higher-value property than one that is in the backblocks without some of those attributes. What an absolute nonsense. I call on the Minister to justify that.

I find myself in the curious position of agreeing with almost everything the members on the Government benches are saying about this issue, and disagreeing with them on what they propose as the outcome and the solution in the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill. The high country is an iconic landscape and it is a fragile landscape, as the Greens have noted. There is, as some members on the Opposition side have said, a perception amongst many in the public that this landscape is off limits and out of the preserve of ordinary people. That is just simply not true.

I think if we look at what the high country actually is, it is the quintessential centre of New Zealand’s image, but it does not exist in isolation. If we go back to, as Mr Adern said, say, 1650 as a starting point for assessing the value of that land, essentially the value of that land has not changed since 1650. If European colonisation had not occurred in New Zealand, that land would probably still look like it did then. But European colonisation did occur. The white man did come here, and he did bring animals, and he did bring gorse, and he brought blackberry, and he brought Hieracium. All of those things would have invaded that high country had it not been for the fact that it was protected, guarded, and looked after by the farmers.

Because these are huge tracts of land, invaluable tracts—valuable in many senses—there is a perception, I think, amongst some, particularly those on the political left, that the people who farm them are very wealthy people, and they are not, for the most part. There are farmers on, essentially, welfare in this country. With regard to the land that they are farming, the position is very tenuous. That land does not produce a great deal, and it would not produce anything if it was not being maintained. It would not produce anything if the pests were not kept under control, if the rabbits were not kept under control, or the gorse, the blackberry, etc., etc.

There is, I think, a perception that if you took the farmers out of the high country, that land would simply stay as it has been for the last 150 years, but it has been in that condition for the last 150 years only because it has been maintained that way by farmers and by the operation of farming.

💬 Shane Ardern: Including the tussock.

Including the tussock—that is right. The tussock is a fragile thing, but it works with sheep. If we take the farmers out of this equation and we do not, alternatively, put something else back, such as extra resourcing for the Department of Conservation, that land will suddenly go to rack and ruin. It will happen very quickly, and it will stop being an iconic landscape. What we need to do is accept the reality that this landscape has been created by 150 years of farming. Farming is not alien to this landscape; farming is what has maintained it.

The value of this land to the country is enormous. We cannot put a dollar value on the tourism, on the iconic imagery value, of that land. What we can say is that in order to keep taking value out of that land, we need to keep putting the maintenance into it, and the only way, effectively, that we can do that is by putting resourcing in, and the way that resourcing works best is to leave it to the farmers. You can say that farmers may enjoy access to landscapes and so forth that other people do not. That is simply not true. I mean, I can say to this House that in more than 30 years of tramping and hunting, I have never been denied access to a farmer’s land. All you have to do is go and ask. The same is essentially true on pretty much any conservation land. There are plenty of places in the conservation estate where you cannot go without a permit, you cannot go at certain times of the year, or it costs you to go in different places, so there is really no difference there. I think what we need to do is recognise that the system that we have had for the last 100-ish years is not broken; it does not need to be fixed.

But I agree with everything that members on the Government side have been saying about the realities of farming: about the isolation and the harsh conditions that people have to put up with. Living in remote places, you do not necessarily have access to continuous electricity supplies, you do not have broadband, and you do not have cellphone coverage. You do not have all these things that people living in sort of splendid isolation in the cities, looking at the high country and thinking: “These people have got something that we haven’t.”, have. You do not have access to all those things. You quite often have to make your own power. The town is 3 hours away across gravel roads. These are all realities for people living in the high country. So to say that they are getting something for nothing really is not true. What they are getting is something that would be worth nothing if they were not farming it, and getting very little in return. They would be getting nothing in return if it were not for the fact that the rents are as low as they are, and in many cases, according to the reports that have been done, they are actually still too high.

I think the position of New Zealand First can be summed up by the report of the High Country Accord chair, Jonathan Wallis, back in 2009, when he said that the process “simply reaffirms that the process used to setting rents since 1948”—

I will not spend a lot of time on this, but I have listened tonight to a lot of unusual topics. I hope members on the other side of the Chamber do not hate farmers, because I did not come here to be hated.

💬 Andrew Little: We don’t.

Thank you, Andrew. I am here to speak on the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill, and I will be very brief. I have noticed a few interesting things tonight. I think one of the things we need to be aware of is, in fact, that the savings put in place by the process we are about to enter into to negotiate these rents will be significant. I think just the fact—

💬 Hon Trevor Mallard: Savings to the farmers.

Interesting. Mr Mallard is talking about savings to the farmers, and I noticed the member for Rimutaka earlier tonight talking about the fact—and I am not sure he knew the difference between sheep and people. But clearly when you look at Mr Mallard, you can see the electricity radiating out from his suit because obviously they do not use wool in their suits on the other side of the Chamber.

💬 Hon Trevor Mallard: Pure wool.

Ha, ha! I would take a bet that it is not.

💬 Hon Trevor Mallard: Pure wool, and made in the Hutt.

So I think that that is the first issue I want to draw to our attention. But in fact there will be significant savings—

💬 Hon Trevor Mallard: Can the member just say “Rembrandt” for me?

Rembrandt—made in the Hutt, made in the Hutt—and not necessarily made of wool, though.

But I think the savings in this measure should not be overlooked. They are absolutely significant, the savings that will occur in this. I think the fact that half of these tenancies are in dispute at the moment is a significant factor that we need to consider as a Government. I think the cost of that is massive, so it is very important that we consider that. The savings in this are pretty significant.

The formula for setting rents in section 23B, inserted by clause 6, is very clearly set out. I think it will very clearly add some benefit to this, and I am sure there will be some practical and positive outcomes from the way we set the rents as a result of this bill. I also believe that, in this instance, and in the course of the negotiation of these rentals, the environmental status of this land will certainly be paid attention to. If we think about how farming works in New Zealand, we see that the care of the environment is absolutely critical to the future of our farmland, whether it is high country in the South Island, whether it is high country or hill country in the North Island, or whether it is dairy farming in Taranaki—it is all the same. So I am sure that the capacity to manage the environment or the environmental factors in the course of this rent-setting process will be very positively dealt with.

I think this bill makes very positive progress for both the Government and the country, and for the future of our high country—it also certainly improves that. I just have to comment on something Mr Damien O’Connor said. He talked about the sheep in 1650. Well, of course, in 1650 the sheep were very like the rabbits we have in the high country today. Before the advent of Robert Bakewell, of course, the sheep were not much bigger than rabbits, and that is worth recognising. So if you go back to—

💬 Hon Trevor Mallard: I can’t remember.

Clearly, Mr O’Connor could; I cannot either.

I just want to conclude by saying that I think the bill is very positive, and I am very pleased to be able to support this, and also to support the high country farmers of the South Island. As Mr O’Connor again put it, they are as unique as the land is, and I think it is pretty special that we can support that. Thank you.

I will finish the Green Party’s contribution. I have a further statement; it will be quick. In terms of the purpose of the Crown Pastoral Land (Rental for Pastoral Leases) Amendment Bill, I note that the previous speaker, Ian McKelvie, noted some scope for environmental protection in how the Valuer-General might set some of the capacity issues there. But you have to ask where the rules are.

I was very concerned at the earlier reading of this when people from the Government side called and bellowed and suggested that I was anti-farmer. Far, far from it. What we need in this is a formula that protects family farmers at the same time as putting in environmental constraints. The environmental constraints need to be put in place in such a way that they do not deter the family farmer from staying on the farm. The Green Party is about getting people on to the land, and we want them to be there, operating in the most sustainable way possible.

So, while there is a fair bit of chatter going on there at the front, I just need to make it very, very clear that the Green Party supports family farmers and we are looking forward to seeing more people on these places farming where it is appropriate. But we seek a formula that actually ensures environmental protection—and, watching the clock, I will leave it at that.

I seek the leave of the Committee for the three votes on this bill to be taken as one question.

The CHAIRPERSON (Eric Roy): Leave is sought for that purpose. Is there anyone opposed to that course of action? There appears not.

A party vote was called for on the question that Part 1, Part 2, and clauses 1 to 3 be agreed to.

Just another caution: votes will be taken in silence.