Lease equity the challenge

MORE than a third of Western Australia is covered by pastoral leases – 91,000,000 hectares in all – with the State Government acting as landlord over that vast expanse of land. 

But, after 70 years without major change, the Government has decided to reorganise its pastoral lease stable. 

All 527 pastoral leases will expire and be up for renewal in 2015, with exclusions on 97 pastoral leases to be implemented. 

While the exclusions do not come into effect until 2015, the Government’s intentions have caused concern among many in the agricultural world.

Government agencies and local governments have taken a generous helping of the pastoral land for a range of purposes including conservation, recreation, tourism, protection of Aboriginal sites and provision for the expansion of existing towns.

While the majority of pastoralists acknowledge the need to exclude the land to protect sites of both environmental and cultural worth and ensure our community has access, some are complaining that the exclusions do not always fit into the framework of a working station and will hinder operations. In some cases, they say, the exclusions will affect their economic viability.

Debate over the State’s security of tenure has been sparked off by the current pastoral lease overhaul. 

Early in the last century pastoral leases were issued on 99-year terms. Since then the advent of the Federal Native Title Act 1993 has ensured that lease renewal terms do not exceed 50 years and are no greater than the term of the most recent previous pastoral lease. 

The result has been a less-than-equitable system, as some leases can only be renewed for 15 years while others have 25 or 45 years, depending on the timing of their issue.

For station owners whose landholding comprises a number of leases, the scenario of different leases with different lease terms creates major logistical problems.  

Across the State leaseholders, financiers and property agents agree that lease tenure in WA is one of the worst in the nation and discourages investment.

Former Pastoral Lands Board chairperson Max Cameron believes that tenure is the main barrier to investment in our State’s stations.

Mr Cameron said that, during his five years as chairperson of the Pastoral Lands Board, a comprehensive study of land tenure was completed, which delineated that perpetual tenure was the right model for WA pastoral leases.

This model, which has been adopted in the Northern Territory and Queensland, still involves regular government inspections to ensure environmental requirements are being met. However, in exchange for a much higher rent, pastoralists have greater security of tenure and are more likely to secure financial backing.

As well as the Native Title Act, the wording of the Land Administration Act 1997 has proved a stumbling block to perpetual leases.

Mr Cameron said it took too long to address pastoral lease breaches such as overgrazing, with many cases taking years to conclude.

Elders WA real estate manager Malcolm French said that due to the sheer size of pastoral leases and the wealth they generate, pastoral leases should have their own portfolio, rather than being the responsibility of the Department of Planning and Infrastructure.

Mr French said many of WA’s stations were downgraded and in an appalling state of repair.

“What really has to happen is the Government has to realise the pastoral industry has an important part to play in the State’s economy,” he said.

The State Government plans to work with the pastoral industry over the next four months to formulate a package of reforms for the industry.

Reforms recommended by working groups established last year include a move towards a rolling or perpetual lease that covers a wide range of uses. It’s understood Planning and Infrastructure Minister Alannah MacTiernan prefers a rolling lease.