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Minister urged to tuck away tens of millions to buy leases

A fund containing tens of millions of dollars is needed to buy Crown high country leased land once tenure review is scrapped, an environmental lobby group says. David Williams reports.

Details of a massive planned shake-up of management of the South Island’s high country have been disclosed in a Cabinet committee minute.

Where the public is still in the dark, the Environment Defence Society says, is how much – if anything – the Government will set aside to buy farmers out of their leases, wholly or partially. “If we’re going to do away with tenure review then we need a fund,” EDS executive director Gary Taylor says. “It would need to be many tens of millions of dollars, you would think.”

Taylor’s idea appears to have some support.

In an opinion piece on Newshub’s website, Federated Farmers South Island regional policy manager Kim Reilly says the Government’s proposed changes could lock up leased land – which gives lessees significant rights – “to the point it becomes a quasi-public estate”.

“There is no clear information about how the Government is proposing to redress these commitments it earlier made. Is there a budget or estimate of costs for the Government to buy land that may no longer be viable to the leaseholder?”

Newsroom asked Land Information Minister Eugenie Sage if her Government is considering setting money aside for the purchase of Crown pastoral leases. She responded on Tuesday afternoon: “Ministers do not comment on Budget bids.”

More money needed: Treasury

The Cabinet business committee’s minute from January 29, on the Land Information New Zealand (LINZ) website, makes much about the “fiscally neutral” aspect of tenure review. It says that, overall, the money the Crown pays to secure land to be protected is expected to be offset by lessees buying the remainder of the lease as freehold.

Treasury warns: “Other mechanisms to bring additional Crown pastoral land into the conservation estate may have greater fiscal impact.”

Some, like Taylor and Federated Farmers, worry that ending tenure review removes an important tool for protecting Crown-owned land and, on the other side, allowing farmers to buy economically viable land.

But it’s worth remembering that before the Crown Pastoral Land Act was passed in 1998, formalising tenure review, 36 leases went through an ad hoc version of the process under the Land Act.

The Cabinet minute notes the Land Act can still be used to purchase parts of pastoral leases, or whole leases – but that’ll require a new pot of money. “These purchases are possible if the lessee is willing to sell part (or all) of their pastoral lease and would be dependent on the necessary funding.”

Millions appropriated

LINZ’s appropriation estimates from the last Budget notes $257 million “for capital expenses to be used for land tenure review acquisitions”. On the other side of the ledger, a forecast $92 million was noted from “capital receipts relating to the land tenure review and property sales”. That suggests an expected deficit of $165 million.

Jerome Sheppard, the deputy chief executive of crown property, says those amounts reflect the balance available over five years. “It is expected that there will be enough funding left to cover the costs of the properties currently progressing through tenure review.”

EDS’s Taylor says ideally the Government would have established a land acquisition fund before announcing it would scrap tenure review. The Government needs to analyse how much of the remaining Crown pastoral land – 1.2 million hectares in 171 leases – should go into public ownership.

“Is it 1 percent, is it 10 percent, is it 50?” he asks. “Rather than picking figure out of air, we need that exercise.”

That money could be funnelled through the “underfunded” Nature Heritage Fund, he suggests.

Opaque, unfair, skewed

Newsroom broke the news last month that the Government was about to scrap tenure review. It followed a mea culpa by LINZ, which, in a report released last month, painted a picture of the system as opaque, unfair, and skewed towards farmers.

The voluntary process breaks up Crown pastoral leases. The Government buys the interest in high country leases to protect land with high ecological and landscape values, while farmers can freehold part of their lease.

New conservation parks were created under tenure review, with a total of 313,000 hectares added to the conservation estate since 1998. But the controversial process also enabled more intensive development on private land, and allowed some farmers to on-sell their newly privatised land for windfall profits. Prominent figures who have bought former Crown land include Paypal co-founder Peter Thiel and New Zealand’s richest man, Graeme Hart.

The January Cabinet committee minute says changes to the Crown Pastoral Land Act and the Land Act are necessary to end tenure review. The paper confirms that eight leaseholders that have accepted a “substantive proposal” will be allowed to progress through tenure review – “in recognition of the fact that those leaseholders have a contractual agreement with the Crown”. Of the 52,253 hectares covered by those eight leases, 26,358 hectares, or 51 percent, will be freeholded.

It will take up to two years for the substantive proposal properties to finish tenure review, the Cabinet paper says. And there appears to be a small, but closing, window for 26 other properties at various stages of tenure review, as the cut-off will only occur when legislative changes are made.

That means there’s a chance that Simons Pass Station, which is undergoing arguably the country’s most controversial dairy conversion, might sneak through.

“The history of the role of the commissioner in respect of discretionary consents is one of abject failure of public policy.” – Gary Taylor

Part of Sage’s high country shake-up is for the Government to provide greater direction to the Commissioner of Crown Lands, who would be more transparent and accountable. If the plans are finalised, the commissioner will also be given greater direction for discretionary consent decisions, which allow more intensive farming.

The Cabinet minute states: “The commissioner would retain the flexibility to mitigate the negative impacts of a proposed activity and secure overall improved outcomes as a condition of the application approval.” That has some worried the door will be opened to the controversial practice of conservation offsets.

Taylor’s wary of leaving the commissioner in charge of discretionary consents. “The history of the role of the commissioner in respect of discretionary consents is one of abject failure of public policy,” he says, adding: “We learn from our mistakes, we don’t ignore them.”

Without offering a different management regime, he hopes there’s a better, more transparent, more accountable, and more efficient way of processing those sorts of applications.

But farmers are worried by potential clamps on the commissioner.

Federated Farmers high country chairman Simon Williamson told farming publication Central Rural Life: ''It's imperative the commissioner is neutral. “Other governments have tried to have the commissioner accountable to the minister. The key is they have to be neutral.”

In the January Cabinet committee minute, Sage reveals her reasons for ending “time-consuming and costly” tenure review. “It would prevent the further freeholding of Crown pastoral land through tenure review, and the associated environmental impacts, while still providing for appropriate economic use of this land.”

LINZ is consulting on the changes, with submissions closing at 5pm on April 12.

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