NEW RURAL RENTS ARRANGEMENTS FOR CATEGORY 1 LANDHOLDERS

Natural Resources and Water Minister Craig Wallace today announced new rural rent arrangements for Category 1 pastoral landholders in Queensland.

Mr Wallace said if the current system had continued, landholders would be facing massive rent hikes of up to 5000% – and average increases of around 400%.

Instead, under the government’s reform package, future increases in pastoral lease rents will be capped at 20% per annum for the next decade.

“After extensive consultation with AgForce, we are delivering a reform package which is fair and balanced,” Mr Wallace said.

“We have worked hard to deliver a package which provides the fairest way to modify the rural rents arrangements,” he said.

Mr Wallace said Agforce had lobbied strongly to ensure that the impact of the drought was acknowledged in the development of the reform package.

“Our landholders are already doing their bit to help address the impact of climate change – working within the stringent native vegetation legislation,” he said.

The reforms mean that pastoral lessees will pay an increase of no more than 20% of the rent paid in the previous year.

At present the average weekly rent for grazing leases in Queensland is $15.50. The 20% increase in the first year will take it to $18.60.

Other examples of increases are:

·A landholder paying $110 a week on a property with an unimproved value of $6.4 million will now pay $132 a week.

·Someone paying $262 weekly for a property worth $9.8 million will now pay $314 a week.

·Rent of $492 a week for a $14.5 million property will rise to $590 a week.

In another case, a landholder is paying just $6 a week for a property with an unimproved value of over $2 million – a 20% increase on that rent in the first year would be $7.20 - all of $1.20.

Mr Wallace said the increases were coming from a low base rate – due in part to the government’s rent freeze which recognised the severe drought affecting Queensland.

He said the government was committed to progressively moving Category 1 rents towards 1.5% of the unimproved value of land.

This will ensure that the community receives an equitable return on its asset.

“However, a review will not occur until after 2011 and any new arrangements will not come into affect until 2017,” Mr Wallace said.

Nearly 65% of Queensland is leased to rural landholders. It is State land owned by Queensland taxpayers.

Even though many pastoral leases are still in drought, the pastoral lease sector has experienced very large valuation increases – hundreds of percent in some instances.

Over the past two years, the Beattie Government has frozen rent increases to assist landholders in the grip of the drought. As a result, Category 1 lessees have saved about $30 million in rent payments.

The new capping arrangements also apply to charitable and non-commercial community organisations including sporting and recreation clubs.

Rent arrangements for lessees in other categories, such as commercial and residential, will be addressed during the next 12 months.

Media inquiries: Paul Childs, Craig Wallace’s office, on 0407 131 654.