Landmark reforms deliver greater security of tenure in Qld

Beef Central, 21/05/2014

Farmers and graziers on rural leasehold land will benefit from greater security of tenure, reduced land rental costs, and better pathways to freehold title under major Queensland Government reforms announced today.

Deputy Premier and Minister for State Development, Infrastructure and Planning, Jeff Seeney said the changes were part of a package of reforms to help Queensland’s primary producers and showed the government had a strong plan for a brighter future for rural and regional Queensland.

“We committed at the 2012 election to support and grow agriculture as one of Queensland’s four economic pillars and these reforms help meet that promise,” Mr Seeney said.

“The passing of the Land and Other Amendments Bill 2014 means that graziers now have access to rolling term leases that deliver one of the most critical ingredients for agricultural businesses – long term investment certainty.

“Graziers can now confidently invest in their properties and businesses knowing their leases will be renewed on a rolling basis.

“This legislation also delivers on a key promise to reduce land rental costs for farmers and graziers and allow easier, more affordable access to freehold title.

“Labor allowed leasehold land rents to spiral and threaten farm profitability. Our government is reining rents in and easing the financial burden on rural leaseholders which will boost the sector, creating jobs and growing the economy.”

Minister for Natural Resources and Mines, Andrew Cripps said these were common-sense reforms to promote business certainty for farmers and graziers in an industry sensitive to extreme weather, rising operating costs and volatile markets.

“Leaseholders will now benefit from rolling term lease arrangements for agriculture, grazing and pastoral land including state forests and timber reserves, with a much quicker and simpler lease renewal process and minimal requirements for the roll-over of a lease,” Mr Cripps said.

“Rural rents for primary production term leases, licences and permits along with the annual cap on rent increase will all be halved and land rents for all primary production tenures will be calculated using annual valuations rather than the 5-year average, providing much needed rent relief to industry.

“We are also providing a real opportunity for farmers and graziers to upgrade their properties to freehold title at an affordable rate.

“We’re delivering fairer and more realistic prices for those who consider the option to convert to freehold and businesses will have greater negotiating power with financial lenders and confidence to invest.

“For the first time, the freehold title cost will accurately reflect the State’s residual interest in the land, given it has often been leased for generations, and the lessees have been responsible for the cost of its ongoing management.

“It’s a Can-Do plan for the future, contrasting sharply with Labor which still has no position and ignored the agriculture sector for so long.”

AgForce CEO Charles Burkes said the reforms showed the government had listened to rural Queensland and delivered solutions for primary producers who were lessees.

“For years lessees have raised questions about the overtly complicated lease renewal process and unaffordable rental calculation methodology,” Mr Burke said.

“Furthermore, under the previous structure for converting leasehold land to freehold, landholders were forced to again pay for properties they had already purchased and often spent millions of dollars improving over generations.

“AgForce presented the Government with a range of evidence about the unsustainability of this structure and a range of alternatives to this and we congratulate the Deputy Premier and Minister Cripps on responding to the critical needs of the agriculture industry.”

Under the changes, lessee’s will still need to ensure the land is surveyed to the appropriate standard for freehold title and will be required to pay the market value of State-owned commercial timber on the land that is not reserved to the State under an agreement.

A lessee applying to purchase the freehold title of a term lease must also have addressed native title, including payment of any costs and compensation, to meet the requirements of the Commonwealth Native Title Act 1993.

Reform critical to Agriculture’s future: AgForce

THE Land and Other Legislation Amendment (LOLA) Act 2014, passed last night in State Parliament, has been applauded by AgForce and will help provide security of tenure, and certainty into the future, for primary producers across Queensland.

Under the Act, which was driven by Deputy Premier, Jeff Seeney, and Minister for Mines and Natural Resources, Andrew Cripps, key reforms to the pathway to tenure conversion from leasehold to freehold and the calculation of land rents will be implemented.

AgForce General President, Ian Burnett, said these reforms were some of the most significant to the agriculture industry in decades and came after three years of tireless advocacy.

“Three years ago, AgForce rejuvenated its ‘Leasehold Committee’ to spearhead proactive work and strong advocacy towards reform,” Mr Burnett said.

“We have since coordinated hundreds of meetings, submissions, discussions and even peer-reviewed research to determine recommendations we would take to Government on the future of tenure and land rents.

“Through passing the LOLA Act and releasing the regulations the State Government has shown it has listened to the needs of rural Queensland and what our sector requires to have a strong and secure foundation upon which to capitalise on the vast opportunities that lay ahead.”

Under the reforms the cost of conversion for perpetual leases in the coming financial year will be approximately 13.1 times their rent at the full 1.5pc of unimproved value.

“We are particularly thrilled the State has listened to our reasoning that leases are only worth as much as the income they generate and have therefore ruled out using the full unimproved value as a basis for converting,” Mr Burnett said.

“This change also recognises the fact that most landholders seeking conversion of leasehold to freehold had already purchased the property and, more often than not, invested millions of their own dollars in improving this land over generations.

“Furthermore, this change in freeholding methodology is supported by the fact other state’s and even courts have determined this is more akin to the residual value of an asset which government divested itself of many years ago.”

However, Mr Burnett said he was also acutely aware of the current financial pressure on rural businesses given ongoing drought and difficult operating conditions and the obstacle this would pose to securing additional funds for conversion.

“I have no doubt securing funds at this time for many may seem a difficult, if not daunting, prospect however so is the prospect of having to pay rents at the full 1.5pc or more of unimproved value indefinitely.

“This is the best conversion rate that has been offered in a long time and we cannot guarantee that a future government will not choose to revoke the conversion rate or substantially increase rents.

“For this reason AgForce is now negotiating with the State Government to provide QRAA- style, low-interest loans so as to assist landholders in realising this once-in-a-lifetime opportunity, one we firmly believe will help underpin a secure and profitable agriculture industry into the future.”

Source: Qld Govt/AgForce. More information on the Government’s land tenure and rural rent changes is available online at or by calling 13 QGOV (137468)



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