PASTORAL LEASE RENTS

The Hon. J.S.L. DAWKINS (15:16): I seek leave to make a brief explanation before asking the Minister for Sustainability, Environment and Conservation questions regarding price hikes for pastoral lease fees.

Leave granted.

The Hon. J.S.L. DAWKINS: With recent poor commodity prices and seasonal conditions, and freight and running costs for pastoralists rising by over 7 per cent per annum, pastoral lease holders are finding the going tough.

The Williams Cattle Company, which runs five stations over 22,000 square kilometres of pastoral lease areas in the north-west of South Australia and approximately 19,000 head of cattle, saw its annual lease payments rise by more than 200 per cent in a two year period. While some relief was granted after lengthy appeals the cattle station owner, along with 222 others across the state, is hurting from the harsh revaluing the state government and the Valuer-General have inflicted on these properties.

The state government calculates its pastoral lease rates based on a 2.7 per cent rate of return on the improved capital value of the pastoral land. This is in comparison with Western Australia which sets its rate at 2 per cent, Queensland which sets its rate at less than half of what South Australia charges at a meagre 1.2 per cent, and the Northern Territory which sets its rate at as little as 0.25 per cent.

Unlike South Australia, the rates charged in other states actually reflect the amount of investment the respective governments make in pastoral land. South Australia, on the other hand, has increased the cost of pastoral leases on some properties in excess of 200 per cent, yet infrastructure spending in investment and pastoral communities is minimal at best.

I noted in an article in the Stock Journal recently—I think it was 30 May this year—that the minister was quoted as saying that pastoral lease rent revenue generally goes to the Treasury. That means that the government's bottom line has received a boost of $352,726 from pastoral lease rent increases in one year alone. However, pastoralists are yet to see any return in the form of infrastructure or investment in their lease areas from the significant increase in their rent costs. My questions are:

1. Will the minister commit to a review of the current methodology used in the pastoral lease rent calculation, as the government currently has no recent records of unimproved land sales to use for its rates?

2. Will the minister explain how the government's almost 200 per cent pastoral lease cost increases are assisting with the Premier's recently announced $27 million plan for job growth in manufacturing, mining and, in particular, food?

3. Will the minister commit the $352,726 raised from the recent increase in pastoral lease costs to investment in infrastructure for pastoral leaseholders and associated communities?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (15:20): I thank the honourable member for his most important question. I am advised that pastoral lease rents are determined by the Valuer-General under the Pastoral Land Management and Conservation Act 1989. I understand that the Valuer-General sets annual pastoral lease rents as a percentage rate of return of the unimproved value of pastoral leases. The Valuer-General is responsible for determining both the appropriate rate of return for the land and the unimproved value of each pastoral lease.

The Pastoral Board is responsible for issuing annual rent accounts to lessees, based on the rent determined by the Valuer-General. The Department for Environment, Water and Natural Resources undertakes administration of rental accounts and the receipt of rental payments.

I am advised that, following a major review of lease valuations during 2010-11, the Valuer-General increased the unimproved value of most pastoral leases. The review showed that all leases were considerably undervalued, especially cattle station leases. The review by the Valuer-General in 2010-11 was conducted to satisfy the act, which requires that pastoral lease rents be reviewed every five years. The increases in the valuation of pastoral leases led to a subsequent increase in lease rents. Any lessee unhappy with the Valuer-General's determination can either apply to the Valuer-General for a review or can make an application to the Land and Valuation Court against the determination.

I am advised that the total value of rent notices issued in 2012 as a result of the review was about $1.4 million. I am advised also that, of that $1.4 million in 2012, the Department of Environment, Water and Natural Resources has the authority to spend about $685,000. Those funds are used for the administration of this act; that is my advice.

For the 220 rent determinations, the median increase above the 2010 rents was 14 per cent, with rents for 58 leases increasing by more than 20 per cent. These included 27 leases, making up 12 per cent of the total, with rent increases of more than 50 per cent, and five leases, or 2 per cent of the total, having increases of 100 to 118 per cent. I have no advice saying that the rent increases were as high as the honourable member stated in his question. To put it in perspective, the cash increase in annual rents from 2010 after the review varied substantially from zero to $25,000, but the median increase was $515.