INDEPENDENT ASSESSMENT OF COMPENSATION INITIATED

The Minister of Maori Affairs, Hon John Luxton today welcomed the introduction to Parliament of the Maori Reserved Land Amendment Bill 1996 and also announced the Government's decisions to initiate an Independent Assessment of Compensation in response to concerns raised on the levels of compensation.

Maori Reserved Land Amendment Bill 1996

"This landmark legislation is another step towards resolving a long-standing inequitable relationship between Maori Reserved Land lessees and the Maori landowners," said Mr Luxton.

"It has been five years of extensive consultation and listening to the concerns of both sides before we could reach this important day, when the legislation could be introduced.

"I believe we have sought to reach a fair and reasonable position in protecting the rights of both owners and lessees with the proposed changes. It is not right for a Government to dictate to landowners through legislation what is their right to a commercial relationship to manage the property they own," said Mr Luxton.

"The Maori Reserved Land Act 1955 brought together more than 43 pieces of legislation and which reflected the move by past Governments over the last 100 years, to progressively erode the rights of Maori landowners without their permission or agreement to the advantage of the lessees.

"This is not a Treaty of Waitangi grievance, it is about relaxing a Government control through unfair legislation, of a commercial relationship between lessees and Maori owners. No other similar commercial relationship is controlled by Government and we are seeking to remove this anomaly whilst protecting the property rights of both Maori landowners and the lessees.

The Bill includes provisions made after our extensive consultation process and in response to concerns from both parties. The legislation will:

• continue to allow lessees the right of perpetual renewal for leases;
• provide for a phased move to market rents. Once the legislation is passed, there will be a three year delay before market rents are phased in over the following four years;
• provide compensation from the Crown to owners and lessees. Owners will receive compensation for the delay in moving the rents to market levels and lessees will receive compensation for the move to market rents and more frequent seven year rent reviews. The cost to taxpayers is likely to exceed $40 million;
• give owners a right of first refusal to buy leases (at the market value) except when existing lessees (on the day the Bill becomes law) seek to transfer their lease to their spouse and/or child. All other transfers are subject to the right of first refusal;
• provide for the owners rights of first refusal to have been deemed as given when the lessee has given the owners 28 days written notice prior to sale by public auction; and
• give lessees the right of first refusal should the owners wish to sell their land, provided owners comply with the requirements of Te Ture Whenua (Maori Land) Act 1993.

"The major impact of the Bill gives owners the opportunity to purchase the lessees improvements over time if they choose, and ensures lessees property value is protected and that owners will receive a fair return for their land, whilst giving compensation to both owners and lessees for the market rental changes," said Mr Luxton.

Independent Assessment of Compensation

"In response to recent concerns over the level of compensation to be paid to both owners and lessees, the Government has decided to appoint an Independent Review Panel comprising of three appointees. Concerns have been raised by Opposition parties and lessee and owner representatives.

"I hope to meet with the Panel in the near future. The Panel members are Dr T Boyd, Professor of the Department of Accounting, Finance and Property Studies at Lincoln University, Mr R W Davison and Mr R G Calvert

"The Panel will be asked to provide an opinion to the Minister of Maori Affairs on the compensation aspect of the legislation," the Minister said.

"The opinion provided will be then be referred to the Select Committee as part of their consideration of the Maori Reserved Land Amendment Bill 1996.

"The scope of the opinion from the Independent Assessors will cover the assessment of the appropriate level of compensation, if any, for:

• the introduction of the rights of first refusal for owners and lessees;
• any additional transaction costs;
• additional rent payable by the lessees.

"The panel will be required to report to the Minister of Maori Affairs by 29 November 1996," the Minister stated.

"I believe this approach will once and for all deal with the concerns of both parties relating to the proposed changes. If parties are still not satisfied after this opinion has been received, both owners and lessees will have the opportunity to make submissions to the Select Committee before the legislation is passed into law.

"A considerable amount of work has gone into this whole process and I am pleased with the current result we have been able to achieve," concluded Mr Luxton.