PASTORAL LEASE RENTS

Adjourned debate on motion of Hon. J.M.A. Lensink:

That this council—

1. Calls on the Pastoral Board to re-form the Rent Review Committee over its decision to increase pastoral rents by up to 230 per cent;

2. Condemns the Weatherill Labor government for once again failing to consult with those affected; and

3. Notes the important contribution of South Australia's pastoral sector to primary product.

(Continued from 28 March 2012.)

The Hon. G.A. KANDELAARS (17:25): It will be no surprise to you that the government opposes this motion. The annual rent for pastoral leases is determined by the Valuer-General, and not by the Pastoral Board, in accordance with section 23 of the Pastoral Land Management and Conservation Act 1989. It is the role of the Valuer-General to determine and provide to the board the unimproved value, the rate of return and the rent for each pastoral lease, of which there are 225. Seven properties had rents increased by an amount greater than 100 per cent.

The increase in rent between 2005 and 2009 of approximately 12 per cent (a very modest figure) reflected the Valuer-General's reluctance to increase the costs to pastoralists at a time when extreme drought conditions and poor commodity prices were impacting on the viability of the pastoral industry despite a rising market for pastoral properties. Given the statutory independence of the Valuer-General, the minister has no discretion to direct him in relation to any of the valuation decisions. Increases in rent for the current financial year are the result of both positive market movement over an extended period in land value and a realignment of rents within the market.

The act also contains a provision for lessees to appeal against the Valuer-General's rental determination should they disagree with the rental amount. In those instances where lessees object to their rental amount and remain dissatisfied with the Valuer-General's decision, they can exercise a further right to have an independent valuation review or appeal to the Land and Valuation Court. In addition to this process, the act also provides a remedy for lessees suffering financial hardship by enabling them to apply to the Pastoral Board for their rental amount to be deferred or waivered.

I can advise that extensive consultation has been undertaken by representatives of the Valuer-General in determining the annual rent and included: on-site meetings with several pastoralists; distribution of information articles, including frequently asked questions sheets provided with rent notices; meetings held with the South Australian Farmers Federation and the Pastoral Board; and courtesy letters sent to pastoralists affected by valuation increases greater than 40 per cent, including an invitation to meet with the valuers who determined the rent by providing direct contact details. The government acknowledges the important contribution of the South Australian pastoral sector to primary production in this state.

The Hon. M. PARNELL (17:29): Like the Hon. Gerry Kandelaars, the Greens believe that one out of three ain't bad, as the saying goes. We note the important contribution of South Australia's pastoral sector to primary production, which is the third part of the Hon. Michelle Lensink's motion.

In relation to the other two parts, first of all, calling on the Pastoral Board to reform the rent review committee and, secondly, condemning the Weatherill government for failing to consult, I think they are misguided and they do not warrant support. As the Hon. Gerry Kandelaars pointed out, under the Pastoral Land Management and Conservation Act 1989, rents payable to the Crown under a pastoral lease are determined by the Valuer-General.

The legislation sets out in some detail the range of things to be taken into account in the setting of the rent. I do not know enough about the system to know whether it is a perfect system. Certainly the list of factors would appear to be comprehensive, but I understand that there is also an argument for having less detail in the legislation and giving more discretion to the Valuer-General, but that is really a question for another day.

The question that this motion calls us to consider is whether the Pastoral Board should be playing more of a role rather than the Valuer-General. My response to that would be, if that is what the honourable member wants to do, then a bill to amend the Pastoral Land Management and Conservation Act would be the appropriate way of achieving that outcome because the act is pretty clear: rents are determined by the Valuer-General.

As the Hon. Gerry Kandelaars pointed out, for people who are dissatisfied with the rent determinations that are made, there is a provision under section 56 of the act to appeal. Section 56(1) provides:

A lessee who is dissatisfied with a determination by the Valuer-General of the annual rent for his or her pastoral lease may, within 3 months of receiving a copy of the notice of determination—

(a) apply to the Valuer-General for review of the determination; or

(b) appeal to the Land and Valuation Court against the determination.

I do not know whether any of the constituents who have approached the opposition and convinced them that this motion is necessary have gone down those paths. No doubt, in her summing up, the honourable member will tell us whether that is the case, but it was not clear from her introductory speech when the motion was first put before us.

I also notice that, under the Pastoral Land Management and Conservation Act, as well as the formal applying for a review or going to court, there is also a less formal approach for people who are dissatisfied with their pastoral lease rent under section 56(1a) which provides:

The Valuer-General must, on the written request of a lessee who dissatisfied with a determination of annual rent, endeavour to resolve the matter informally by conferring with the lessee, whether or not the lessee has lodged an application for review under subsection (1).

It seems that you have three bites of the cherry if you are a lessee. One, you can go and talk to the Valuer-General; two, if you are still not happy, you can put in a formal request for a review by the Valuer-General; and, three, if you are not happy with any of that you can go to court. There are plenty of opportunities for people who are dissatisfied with their rent to go through those channels and have their rent reviewed.

In terms of some of the rationale for this motion that the Hon. Michelle Lensink put on the record last time, it is certainly my understanding from a reading of section 23 that all those things would be taken into account. If they are not taken into account, then there may well be room for some sort of either greater or lesser legislative direction which would come about via an amendment to the Pastoral Land Management and Conservation Act. I do not believe that calling on the Pastoral Board to reform their rent review committee is necessarily the most constructive way to proceed.

In terms of the second part of the motion, condemning the Weatherill Labor government for once again failing to consult with those affected, normally I would be the first to line up behind a statement such as that. However, I am not convinced in terms of the regime for pastoral rent assessment whether that is a valid criticism, given, as I have said, that it is the Valuer-General and there are review mechanisms for anyone who is dissatisfied with the rent that they have been charged. I note also that rent payable on pastoral leases is different from a lot of other rent; it is payable in arrears. The Valuer-General is well aware at the time that the rent is set as to the current condition, the carrying capacity of the land and any other factors that need to be taken into account.

For those reasons, the Greens will not be supporting this motion today, although we do support the third part of it because we note the important contribution that South Australia's pastoral sector plays in relation to primary production in this state.

The Hon. J.M.A. LENSINK (17:34): I thank the Hon. Gerry Kandelaars and the Hon. Mark Parnell for their contributions on this motion, which is very much a reaction in the pastoral region (as I said in my speech of 28 March) whereby the pastoralists feel like this was sprung upon them and they have not been given appropriate time to absorb the consequences of it.

I think they feel they are being used just to raise revenue for the government; and really it is the matter of the unimproved capital value that the government is basing it on that I think is the real issue. The rationale for the valuation that the government has applied is really the nub of what we are trying to get at; and the member for Stuart, as I mentioned, has an FOI in because he is trying to get to the bottom of why that decision was reached.

The pastoralists feel, too, that they may well be picked off one by one. They are looking for a unified approach to this problem, and that is why they suggested they would like to see the reformation of the Rent Review Committee, and that, at least, would give them some comfort that there was an avenue of appeal.

In response to the Hon. Mark Parnell's suggestion that we do a private member's bill, I think that really has Buckley's chance of getting through here, and it is something that would need to be the product of a review—either by one of the parliamentary committees or by the government itself—if the background information was to be provided to support that. I would suggest that it is probably a bridge too far to come up with a private member's bill on this motion.

It is really an expression of concern for the pastoral sector. They have had a lot of floods up north which have impacted on their ability to get their product to market. While it is true that the drought has broken, they are still not getting the sort of returns that I think the increase in the rents is indicating. I think that they are really looking for some form of fairness. That is why I put this motion forward—to indicate that there is some support for the situation they find themselves in and to give them some hope that the Legislative Council, at least, is listening to their concerns. I commend the motion to the house.

The council divided on the motion:

Majority of 1 for the ayes.

Motion thus carried.