Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . .

Legislative Assembly for the ACT: 1999 Week 9 Hansard (2 September) . . Page.. 2769 ..

MR SMYTH (continuing):

One other area which the Government indicated would have a maximum lease term of 99 years is Pialligo. Again, the Government is still committed to delivering on this recommendation. However, the recent developments regarding the proposed transport hub adjacent to the airport have raised the issue of land requirements to provide for such a proposal. The Government will be able to finalise the conditions under which 99-year leases will be offered once there is a clear picture of the land requirements for the proposal.

Following on from the lease term and payout options is the second key element of this amending Bill, which implements part of the Government's response to recommendation 26 of the Rural Policy Taskforce report. The task force recommended restricting the transfer of rural leases for lessees who pay out their rents as a requirement for the granting of the 99-year lease. This recommendation also covered rural lessees in short-term areas who are granted a further short-term rental lease. In the short-term areas rural lessees will also have 18 months to apply for a further short-term rental lease, which will be granted at less than market value. As with the long-term leases, all applications for short-term rural leases after the 18 months will be granted at market value.

The Government agreed with the principle of restricting the transfer of these leases in order to prevent the rural lessees reaping windfall gains by being granted a lease at less than market value and then selling at market value. The Act has been amended to require the rural lessee to gain the Executive's consent to transfer their lease. In addition to that restriction, the amendment specifies that if any transfer for a 99-year lease is sought within 10 years of the grant of the lease then the lessee will be required to pay a sum of money to the Territory. That sum of money will be 50 per cent of the difference between the land value at sale and the land value paid when the lease was granted. Lessee owned improvements are not included in the land value. For short-term leases, if any transfer is within one-third of the term of their lease, the sum payable to the Government will be 50 per cent of the land value at sale, less the capitalised rent, less the lessee purchased improvements. If the lessee took up either 30-year payout arrangement, the lessee will also be required to pay out any moneys owing under the arrangement before the Executive's consent to transfer will be given.

The task force also recommended that transfers to immediate members of family and family companies be exempt from the 50 per cent payment. This was to recognise that financial penalties on lessees who wish to pass on their farm to the next generation would be inappropriate. While the Government accepts the principle behind that recommendation, the exemption will only apply to transfers to an immediate member of the family, which has been defined in this amending Bill.

Transfers to family companies will, however, not be exempt from the payment. This is because a rural lessee could, with Executive consent, transfer the lease to a family company and be exempt from payment. The lessee, as a shareholder in the family company, could then sell their shares in the company, as the lease is a company asset. This is a very simple way to avoid the 50 per cent penalty. The options for drafting an amendment that could allow a family company to be exempt without creating this loophole were looked at in great detail. However, it became clear that it would be

Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . .