The end of tenure review

Written By: - Date published: 11:45 am, February 15th, 2019 - 29 comments
Categories: Conservation, Environment, farming, greens, Politics, sustainability - Tags: ,

It is said that the worst day in Government is better than the best week in opposition.  That is because you can actually get things done.  Things that matter. Like getting rid of the tenure review policy, under which large tracts of rural land has been privatised and on sold for ridiculous profits and sensitive environmental areas have been wrecked.

The announcement was made yesterday by Land Information Minister Eugenie Sage.  She said this:

We’ve seen a very mixed bag in terms of the tenure review outcomes … [t]here’s been a lot of criticism of the process for a long time, and there is strong support across all of the government parties for ending tenure review and moving to a vision of enduring stewardship for our high country.”

So what exactly is tenure review?

David Williams at Newsroom has this scathing description:

Tenure review ends a Crown pastoral lease by privatising some land and setting aside the rest for conservation.

Bizarrely, in some settlements farmers have been paid by the Crown, because greater value was placed on their interest in the soon-to-be conservation land than the freeholded portion. Research suggests the more rare and threatened the ecological values of the land, the more likely it was to be freeholded.

Tenure review has been slammed by opponents as inefficient, ineffective and ill-judged – not least because former Crown land, once freeholded, has been broken up and sold to property developers for massive profits.

University of Canterbury’s Ann Brower estimates farmers have made $275 million by on-selling 74,000 hectares of former Crown land, at a median sale price of about 500 times what the Crown was paid.

Brower’s latest article, published last November, challenged Sage to turn around a track-record of Crown decisions allowing greater agricultural intensification in the Mackenzie Basin.

And who benefited?  How about Peter Thiel and John Key among others.

From Charlie Mitchell at Stuff:

Some of those who bought land that was formerly Crown leases include Peter Thiel, Graham Hart, and Sir John Key. Some of the most expensive properties advertised for sale in New Zealand are on former pastoral leases.

In numerous cases, land that was privatised by the Crown for significantly less than market value was quickly on-sold for enormous profits.

Stuff investigation in 2018 found that tenure review had cost taxpayers about $65 million, and, since its beginnings in 1992, had resulted in the privatisation of nearly half a million hectares of once Crown-owned land, some of which had become property developments and luxury golf courses.

The report that prompted the change was summarised by Mitchell in this way:

The decision to scrap the process appears to be driven by an internal report conducted by Land Information New Zealand (Linz), which manages tenure review on behalf of the Commissioner of Crown Lands.

The report said it was unclear what the Crown was trying to achieve with tenure review, and there had been a focus on completing deals.

It said the Crown “does not appear to have a clear strategic objective, other than exiting the [leases]” and the system had been “seen as operational in nature, which has encouraged a focus on processes at the expense of outcomes”.

It concluded: “Overall, the combination of stronger farming links, poor or variable quality ecological advice, and the desire to complete deals has meant development has resulted.”

National’s spokesperson David Bennett has the strange take that it is Government sticking its nose in where it should not.  It is a strange take that the Crown has no interest in the future of Crown owned land.

Well done Eugenie Sage.

29 comments on “The end of tenure review”

  1. greywarshark 1

    Eugenie Sage has carried out a practical policy with this finish to government’s (which?) careless lack of concern over outcomes in their high country. Good on you Minister Sage.

    • Dukeofurl 1.1

      The existing tenure review was hijacked by the new national government in July 2009 when they changed the rules to include some 40 lakeside pastoral stations which had been excluded under labour from tenure review.
      There are the ones where huge profits were made form onselling, as of course lake views are worth a lot of money.

    • Jess NZ 1.2

      +1000000

      And Good on the Green Party for whom she works and the coalition government that made it possible.

  2. KJT 2

    About time. Run holders that have benefited by decades of cheap leases on crown land, were enabled further benefits by “free holding” at well below market prices.

    At a huge cost to tax payers, who have lost public land sold at well below market rates.

    A rort which has helped various of the usual suspects,

    But. “There is no corruption in New Zealand.

    Where is the “Tax payers Union” when you need them?

  3. veutoviper 3

    Hi mickysavage, off topic but no Open Mike today?

    [Oops up now – MS]

  4. greywarshark 4

    Micky Savage don’t forget we really appreciate both you and lprent and Advantage an Te Reo Putake and Matthew (and ..vv and Anne and incognito and Ianmac and Siobhan and Sabine and swordfish and marty mars and Robert and WetheBleeple and bwaghorn and Patricia and Cinny and ……)

    And by the way if there has been a call for me to be censured for speaking out of turn, okay, I know I am getting stroppy. Over-anxious the shadow is moving fast and I don’t think that most of us are match fit. I’ve got this book of Fast Exercise and another one on Fast Diets and might get some ideas there that can be applied to using for the country’s condition vis a vis the world.

  5. WeTheBleeple 5

    Me poor brain wants to open mike about the huge cattle loss in Australia. Off to me PDC course tomorrow so no bringing it up then.

    1/2 million cattle is a billion dollar hit. In the article stating they’d lost 1/2 million cattle they say it was ‘perfect land for cattle grazing’. This disconnect between facing reality and viewing things through the lens of profit has to stop.

    Your money or your life.

    • veutoviper 5.1

      OM now up.

    • greywarshark 5.2

      Have I got a choice?

      Reminds me of the person who’d fallen over a cliff and was clinging to a bush. ‘Is there anyone there’ came the plaintive cry. ‘Yes’ says God soothingly ‘I am here. Just let go of the bush and all will be well.’. Silence for half a minute then another cry ‘Is there anyone else there’?

      I’m looking for a really good promise!

      • greywarshark 5.2.1

        Looked up PDC – there are 131 versions of meaning for those letters.
        I guess yours is Permaculture Design Certificate?
        When it’s over I would like to discuss stuff with you, to point me in the right direction at least. Would appreciate it.

  6. James Thrace 6

    Great.

    Now all that needs to happen is when large tracts of farmland come up for mortgagee sale in future, the government gets first crack at buying large land tracts and reinstate the leasehold process again.

    At least then if the state buys out the mortgagee and leases the land back to the overly indebted farmer on long term lease principles, the land will still be productive, the farmer stays on the land, the state receives payment via long term lease. Everyone wins.

    But what’s to stop farmers deliberately going into mortgagee sale? Nothing really. And why should it? I doubt farmers would want to be beholden to the state via leasehold and being restricted what they can do on their land and probably wouldn’t go into mortgagee sale if they can help it.

    Such a process would have meant that the crafar farms would have ended up in state ownership at first instance. If the state then wanted to sell it off, they could then split the various lands into separate sales instead of a bulk lot which Westpac did.

    • Dukeofurl 6.1

      They werent land held under a mortgage.
      It was a ‘perpetual lease’ which is what it sounds like, if they were seriously in lease arrears they would just have sell with payments from the selling price, but it would be another farmer as thats the only use under the lease.

      The whole thing was changed by the national party during its term in government

      There was the The Crown Pastoral Land (Rent for Pastoral Leases) Amendment Act in 2012 which changed the rent – to favour the farmer as the previous number was just 2% of land value

      But before that , just 6 months after taking office in 2009 Cabinet changed the rules about 40 properties that were excluded from tenure review as they had high country lake frontages, they were now allowed to go through the process.
      Some like Alphaburn Station beside lake Wanaka were put on the market immediately the land was freeholded and sold for a huge gain.

      https://www.stuff.co.nz/national/105146853/after-taxpayers-paid-to-get-rid-of-it-farm-sells-for-175m

      You would have thought that the global Financial crisis was taking all the governments time in July 2009, but jobs and business werent in David Carter and Maurice Williamson as the responsible ministers had more important things to do.
      https://www.linz.govt.nz/system/files_force/media/doc/2009-and-beyond-minute-of-decision_0.PDF?download=1

      • Gabby 6.1.1

        So where’s Sirponyboy’s slice of the action?

      • James Thrace 6.1.2

        I am well aware of what tenure review involved thank you.

        I was making the suggestion regarding future mortgagee sales of farmland/pastoral land as a way to reinstate a small portion of what has been lost.

  7. Tuppence Shrewsbury 7

    Finally, a post about a government minister actually doing something. and something positive.

    Well done Eugenie, and by extension the greens, for getting on with the job of enacting their policies.

    I would include Hipkins with his polytech reform, but it’s still far to early to tell if setting national standards for polytechs will help anyone

    • Dukeofurl 7.1

      The Polytechs were competing for students , there were multiple campuses in Auckland, instead of focussing on improving pass rates and providing greater access for courses.
      national government had frozen their funding during most of its term.
      Its was around a$100 mill bail out last year and likely the same again with a few campuses compleley un viable.

      • Tuppence Shrewsbury 7.1.1

        I don’t have a problem with the plan of the improvement of the sector by applying national standards dumb dumb. i’m waiting to see how it actually works before praising it or criticising it.

        I think the ending of tenure review, especially for foreigners, is a good enactment of stated government policy. So well done to Eugenie Sage and the Greens.

  8. Gosman 8

    What is the issue exactly with the land being broken up and onsold?

    • left_forward 8.1

      I’m not falling down the bear trap again Gos. This is how it all begins isn’t it? – a simple request for an explanation… and then when someone takes the bait and innocently tries to he… zzappp!

    • Gabby 8.2

      What’s the issue with a 75% top income tax rate gozzer?

    • Robert Guyton 8.3

      “What is the issue exactly with the land being broken up and onsold?”
      You don’t know, Gosman?

  9. Yes, and Peter Thiel certainly knew what he was doing when he approached National for special consideration to become a citizen without any other accountability.

    He got the land and the money. Why doesn’t anybody stop to wonder how these businessmen get so fabulously wealthy in the first place? Not by making stupid deals and losing on them…

    I want to start a petition to revoke Thiel’s citizenship. Who’s with me?

    https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11794020

  10. barry 10

    The problem is not so much the obscene profits, as the loss of amenity value. The only criterion for freeholding was that it could turn a profit, which means that conservation got the land that nobody wanted.

    A lot of the land was wetland and other rare ecosystems with high conservation values and lakeside land that could have been great for outdoor recreation. Worse, a lot of the land left for parks is isolated hilltops with access only by grace of the owners of the newly freeholded land. For conservation it is best if different areas are linked by natural habitats, so that populations are less threatened by fire and climate events.

    Some of the freeholded areas are turning in to highly irrigated factory farms, which are damaging the waterways.

    The previous leasehold structure didn’t work and many of the stations were becoming uneconomical (as they were restricted from changing the nature of the business). Probably the crown could have bought off the leases in many cases for less than the cost of the freeholding.

  11. mosa 11

    Great news.
    This why i wanted the Greens to be in government.
    Another point of view from Idiot Savant.

    http://norightturn.blogspot.com/2019/02/not-one-hectare-more.html

  12. Jum 12

    ‘And who benefited? How about Peter Thiel and John Key among others.
    From Charlie Mitchell at Stuff:
    Some of those who bought land that was formerly Crown leases include Peter Thiel, Graham Hart, and Sir John Key. Some of the most expensive properties advertised for sale in New Zealand are on former pastoral leases.’

    So what year did key get his ‘formerly Crown lease’ land?

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