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Legislative Council - Fifty-Second Parliament, Second Session (52-2)
2013-04-30 Daily Xml
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SHACK LEASES

The Hon. J.A. DARLEY (14:53): I seek leave to make a brief explanation before asking the Minister for Sustainability, Environment and Conservation questions regarding shacks on crown land.

Leave granted.

The Hon. J.A. DARLEY: In answer to my question on 10 April the minister said that the rate of return used to calculate the rents for shack sites was set at 4 per cent based on independent advice from the New South Wales Valuer-General and a New South Wales valuer in private practice. In his report, the New South Wales Valuer-General stated:

The Carter report lacks the appropriate level of valuation rationale, valuation calculations and comparable market evidence to properly determine current market rental values of the Life Tenure Shacks situated on Crown land.

Whilst the report did not stipulate an appropriate rate of return, it did state:

Typically returns on residential investments are at the lower end of the range.

The independent private valuer from New South Wales stated in his report:

I do not have first-hand knowledge of all the leases, the lease (shack) sites, the respective locations or the local market.

He also said that he was 'not familiar with the South Australian market or the market in the locality of the subject land' before making recommendations of what an appropriate rate of return should be in the location of crown land. My questions are:

1. Whilst I acknowledge the decision to set the rate of return was not made by the current minister, does the minister still support the decision not to apply the reduced rate of return retrospectively, given the comments made above were contained in the reports which were used as the basis to set the 4 per cent rate of return?

2. On what basis can the minister justify not correcting an error that was first raised nearly four years ago?

3. What did the department pay for the independent New South Wales valuer's flawed 40-page report?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (14:55): I thank the honourable member for his most important questions. My answers to his three questions are as follows:

1. Yes.

2. Given that, question No. 2 does not apply. There was no error.

3. I will take this question on notice and bring back a response at a later stage.

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