Fairer pastoral lease rents

May 4, 2012

The passing of the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Act establishes a fairer and simpler system for pastoral lease rents.

Land Information Minister Maurice Williamson said:

“This Act is a significant reform of the way rents are charged on pastoral leases in the South Island high country and will go a long way towards eliminating the years of tension that has existed between the Crown and lessees over rent issues.

“Under the Act, lessees of pastoral leases will be charged rents based on the earning capacity of the property.”

The new system, known as earning capacity rents, will be in place later this year.

“It’s a much simpler system to administer, is more transparent and provides a fairer rent,” Mr Williamson says.

“It will allow farmers to get on with the job of farming and helping to grow New Zealand’s economy.”

The old system was time consuming, expensive to administer and unfair. The new one will mean most if not all properties face higher rents but it is much fairer.

However, the anti-farmer Labour Party doesn’t think so:

A select few High Country farmers have been handed a sweetener from the Government in the form of cheap rents, says Raymond Huo, Labour’s spokesperson for Land Information.

“The passing of the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Act, severely compromises the Crown’s right to negotiate fair rents for the high country land it owns. Instead it offers a select few farmers special privileges,” Raymond Huo said.

“The Act will allow Crown leases to be determined purely on the “stock carrying” capacity of the land, not the land value.

This shows how poorly he understands pastoral leases. Rents were based on LEI – land exclusive of improvements. That is the land in its natural state before it was settled which has a very low value. The stock carrying capacity will give a much higher value than that.

The new system will reduce administration costs, increase transparency and is fairer to both the crown and pastoral lessees.

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