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NT valuation process in disarray

by James Nason, 23 February 2012

Northern Territory cattle leaders believe a formal review is required to fix the state of disarray surrounding the NT pastoral land valuation process.

With a new round of three-yearly valuations due to commence this year, more than a hundred objections to the previous rounds remain yet to be processed.

A successful court challenge to the previous valuations conducted by the Australian Valuation Office on behalf of the NT Government last year has also cast further doubt upon the accuracy of previous valuations.

It understood that the NT Government has decided not to renew its contract with the AVO following the problems that have been caused by the previous round of valuations, and will use in-house valuers to carry out this year’s review. 

The last round of valuations, which were carried out in 2009 and took effect in 2010, saw Unimproved Capital Valuations (UCVs) across the NT pastoral estate increase by 460pc on average, and up to 1500pc in individual cases.

Pastoral lessees argued that the increases in valuations went far beyond actual increases in property values, and included unrealistically wide variances from property to property.

More than 50 percent of pastoral lessees lodged objections to those valuations. That process is expected to be played out later this year.

The blow of the increased valuations was softened somewhat at the time after the Northern Territory Cattleman’s Association successfully lobbied the NT Government to reduce the percentage rate for calculating pastoral lease rates from 1.22pc to 0.248pc in 2010-11. The NTCA also negotiated for a cap to be placed on shire rates for two years.

Successful challenge

Problems with the previous round of valuations were brought into sharp focus last year when successful legal challenge was mounted against the valuations for Lake Nash and Georgina stations.

The NT tribunal hearing, led by Townsville-based valuer Geoff Eales from valuation firm Opteon Property and solicitor Barry Taylor from Emanate Legal, on behalf of the stations’ owners Peter and Jane Huges, found that the AVO has mis-analysed the station's values.

The tribunal agreed with Mr Eales and Mr Taylors’ case that the UCVs should have been substantially lower, and, reduced the UCVs on both properties by more than half of the level set by the AVO.

Taking on the Australian Government valuation office in court and winning was a significant result, and one which could have major repercussions for how properties are valued right across northern Australia. 

A key question is whether the Lake Nash and Georgina finding will result in similarly dramatic downward adjustments when the next round of valuations is conducted across the NT pastoral estate  this year.

Neither the AVO or the NT Valuer General office have responded to Beef Central’s questions about the likely implications from the Lake Nash and Georgina findings.

NTCA executive director Luke Bowen said the result raised questions over the way valuations are conducted.

“The findings of the valuation review board on the matter of the valuation of Lake Nash and Georgina Downs for the 2006 valuations cast serious doubt upon the accuracy of the valuations conducted by the valuer general in 2006 and again in 2010 over the NT pastoral estate,” Mr Bowen said.

“Given the findings of the valuation review board it would seem logical that a formal review of the 2010 valuations would be necessary.”

It is also understood that NT Government will engage an in-house valuer general for the next round of valuations, which is a departure from the existing and long standing arrangement where the Australian Valuation Office performed the role.

Mr Hughes declined to comment publicly when contacted about the case by Beef Central last week.

NTCA president Rohan Sullivan said in his address to last year’s NTCA annual conference that in some cases the new UCVs appeared more closely aligned to a walk in-walk out value rather than a value based on a bare block of land.

“People have remarked to me, “oh it doesn’t matter what the UCV is, government will just vary the rate to get the amount of money they want to raise”.

“Well that’s fine, but as experience shows, it doesn’t always work, and isn’t it important that the UCV actually be correct, and be assessed in a transparent and understandable way.

“Incorrect and outlandish UCV’s give the wrong impression to the rest of the community who then ask, “if these properties are so valuable, why don’t they pay more”?”

In August last year the NT Government placed a freeze on pastoral rent payments for NT cattle producers this financial year, in recognition of the financial hardship caused by last year’s suspension of live cattle exports to Indonesia. 

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