SHACK LEASES

The Hon. J.A. DARLEY (14:43): I seek leave to make a brief explanation before asking the Minister for Communities and Social Inclusion, representing the Minister for Sustainability, Environment and Conservation, questions with regard to shack rentals.

Leave granted.

The Hon. J.A. DARLEY: For over three years now, I have engaged in discussions with the minister for environment regarding the rents for shack sites situated on crown land. I acknowledge that the minister has taken the time to meet with me on a number of occasions and has organised meetings with the department to discuss the issue and in particular to discuss the rate of return used to calculate the rents.

The rate of return currently being used is 4 per cent and I have long argued and provided supporting evidence that a 2 per cent rate of return would be more appropriate. On 14 June this year, I attended another meeting with the minister where I was informed that the Premier had requested that the minister refer the matter on the rate of return to the Deputy Valuer-General for comment. My questions are:

1. Can the minister advise whether he has referred the matter to the Deputy Valuer-General? If not, can the minister advise when this is likely to happen?

2. If the matter has been referred to the Deputy Valuer-General, could the minister advise on what date this occurred and whether there has been a response?

The Hon. I.K. HUNTER (Minister for Communities and Social Inclusion, Minister for Social Housing, Minister for Disabilities, Minister for Youth, Minister for Volunteers) (14:44): I thank the honourable member for his most important question. In particular, in regard to the specific questions he has asked, I will take them to the Minister for Sustainability, Environment and Conservation in the other place and seek a response on his behalf.

I have some information that I may be able to share with the chamber if it is of interest to people. I understand that these conditions for non-transferable shack leases on crown land provide for the periodic revaluation of annual rent to be paid to the Crown for the right to occupy that land. Lease rentals have always been based, I am told, on the policy premise that the Crown should realise a fair return for the private exclusive use of its land assets. I do not think anyone here would argue with that.

An independent valuer provides a report on the values of individual shack sites and the rationale for the valuation. The valuer's report is then provided to the Valuer-General for review. The advice takes into account market evidence, such as the significant upward trend in the value of waterfront land, and some other things.

I am advised that lessees of shack sites on crown land at Fisherman Bay, Glenelg River and Milang were notified of new rents in December 2011. These rents were determined by applying a 4 per cent rate of return to the unimproved land value of the shack site. I am further advised that in the latest round of 88 shack revaluations, 19 are at Fisherman Bay, 46 are at Milang and 23 are at Glenelg River. The lease conditions also provide the opportunity for lessees to lodge an objection to the new rent within 28 days of being notified, and I understand that a number of objections to shack rental increases have been received. I am also advised that the department of environment and natural resources is conducting a review of those sites that are subject to an objection based on the supporting evidence provided by the lessees.