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Legislative Council - Fifty-Second Parliament, Second Session (52-2)
2013-04-10 Daily Xml
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SHACK LEASES

The Hon. J.A. DARLEY (14:45): I seek leave to make a brief explanation before asking the Minister for Sustainability, Environment and Conservation questions regarding rents to shack sites situated on crown land.

Leave granted.

The Hon. J.A. DARLEY: In 2009 I met with the then minister for environment (Hon. Jay Weatherill) to dispute the 4 per cent rate of return on the unimproved value of land used to determine the rents on these sites. For nearly four years now my argument has been the same, namely that 4 per cent is too high.

After much urging and finally a direction from the current Premier, the former minister (Hon. Paul Caica) referred this matter to the South Australian Valuer-General for advice. As a result of this advice, I understand that former minister Caica decided to use a 2.75 per cent rate of return rather than 4 per cent but he advised that it would not be retrospective.

In my experience with rating and leasing issues, whenever an error is detected it is always corrected retrospectively from the date on which the objection was lodged. My questions to the minister are:

1. When will this 2.75 per cent be effective from?

2. Does the minister also intend not to apply the 2.75 per cent retrospectively from when I first objected in 2009? If so, can the minister advise why and on what basis?

3. Does the minister accept that the opinion from the Valuer-General effectively means the 4 per cent was wrong and therefore rents were overpaid, in some cases for a number of years?

4. Does the minister intend to address this? If not, why not?

5. What is the total value of overpaid rents to date?

6. What is the total value of all rents reviewed following the Carter report in 2009?

7. As I have also expressed my concern with the unimproved values, will the minister review these valuations? If not, why not?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (14:48): I thank the honourable member for his most important question. I cannot begin to tell you how pleased I was to take over this part of the portfolio, knowing the honourable member's continuing and ongoing interest in this area.

Lease conditions for non-transferrable shack leases on crown land and in national parks provide for the periodic evaluation of the annual rent to be paid to the Crown for the right to occupy the land. Lease rentals have always been based on the policy premise that the Crown should realise a fair return for the private, exclusive use of the Crown's assets. Shack rents are set by obtaining a land value from an independent valuer and applying a rate of return to that value. I am advised that for rents effective from 1 January 2012, the rate of return was set at 4 per cent. This was based on independent advice from the New South Wales Valuer-General and a New South Wales valuer in private practice. For rents effective from 1 July 2013, the rate of return was set at 2.75 per cent. This was based on advice from the South Australian Valuer-General.

I note that in the Yorke Peninsula Country Times on 22 January 2013 the shack owners association president conceded that 'it does appear we've had a reasonable outcome'. I can advise that the Department of Environment, Water and Natural Resources will seek advice on the appropriate rate of return for shack sites every two years. Shack rents on crown land at Fishermans Bay, Glenelg River, Milang and the Coorong National Park were determined using a 4 per cent rate of return to the unimproved land value of the shack site effective 1 January 2012, as the honourable member said.

Rents of some shack sites in Innes National Park, including Pondalowie Bay and the remainder of the settlement at Fishermans Bay, were determined using the 2.75 per cent rate of return effective 1 July 2013. I understand that lessees have the opportunity to lodge an objection to the new rent within one month of being notified as part of their lease conditions. I am advised that objections to shack rental increases were received from some shack lessees at Fishermans Bay, Glenelg River and Milang, and the Department of Environment, Water and Natural Resources sought advice from the Valuer-General to determine some of these shack lease rental objections. I can advise that in all reviews completed to date the shack rents were upheld.

The honourable member asked a number of questions, and a couple of them go to the total values of what he claims to be overpaid rents, so it follows on the basis of my answer that there were no overpaid rents. In response to one of his final questions, I respond now that I will continue to work with him, as the previous minister has done, to arrive at an outcome that is satisfactory to the constituents that he represents and also to the government.

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