Tenure: A piece of policy that few will miss
News that tenure review will be cancelled is likely to disappoint only a handful of very rich landowners. But taxpayers have footed a big bill for the policy’s failure, writes Charlie Mitchell.
For all of its flaws, there was something comforting about the way tenure review united groups that are often in conflict. Before it was officially canned yesterday, it was a rare piece of public policy that had few champions on any part of the political spectrum, despite the fact it had stuck to successive governments like a sloth clinging to a falling tree branch. There was little evidence of enthusiastic support, or even a vague notion of what was meant to be accomplished.
That was certainly the conclusion of an internal review by Land Information New Zealand (Linz), released last week, which appears to have sharpened the blade for tenure review’s execution.
It was a fall from grace for a policy that had started with promise in the 1990s, when there was consensus between farmers, conservationists, and public access groups that it just might work. You could give farmers more control over managing the land, add to the conservation estate, and improve access to the most scenic parts of the country in one fell swoop.
That vision, in practice, strayed so far from its origins that, by the time it was formally dropped, it would be hard to find a less popular policy, particularly one that had been continued by four successive governments.
Many farmers and conservationists had come to resent tenure review, albeit for different reasons; the minister responsible for Linz, Eugenie Sage, had once called tenure review ‘‘the greatest wave of privatisation since Rogernomics’’, and repeatedly pointed out it had been ‘‘heavily criticised’’ when she announced its cancellation.
But the clearest sign that tenure review was finished came in that internal review. There were many criticisms, but the most telling was this: The Crown ‘‘does not appear to have a clear strategic objective, other than exiting the arrangements’’.
It was, in non-bureaucratic terms, sleepwalking.
There is one group, however, that may be sad to see it go.
During a lengthy Stuff investigation into the tenure review process published last year, it became clear there was a small pocket of society that, in the cracks between the competing factions, was quietly benefiting from the process.
There are many examples to choose from to illustrate how this worked, but this one is the best.
One of the earlier leases to go through tenure review was Alphaburn Station, which has a long frontage with Lake Wanaka.
When the lease was split between freehold and public parcels, one pocket of land on the waterfront proved particularly valuable. The former leaseholder, who had become the outright owner, did the logical thing and sold it on the free market to property developers for about $10 million.
The developers tried to build something, but couldn’t get the necessary resource consents to meet their vision. A decade later, they sold the bare land to interests associated with Peter Thiel for $13.5m, nearly double its value at the time.
Fifteen years since the land was privatised, it is still empty. Its value has increased 60 per cent in the few years since it was bought by Thiel’s company, even though it remains untouched.
The annual, untaxed capital gains on the empty land would be enough to make Thiel a millionaire several times over, if he wasn’t already a billionaire.
When the tenure review for Alphaburn was put out for public consultation, there was a brief campaign to turn that piece of land into a public reserve. But the law underpinning tenure review said land capable of economic use should be privatised, and so it was.
If this was the scenario envisaged when tenure review began – society’s wealthiest people extracting value from land which, for more than a century, had been tended by farmers on behalf of the public – it was a vision that had not been articulated to the public, who was footing the bill for the process.
In any case, that’s what happened. Today, there’s very little public land by Lake Wanaka, but there is a thin, dusty trail looping around Thiel’s empty treasure box, from which you can stand and imagine the public reserve that could have been.
While many will read tenure review’s obituary with great pleasure, it is unclear how much difference it will make in the long run. As the internal Linz
review noted, it was unlikely any new properties would have entered the process. It had done its dash.
There is no getting back the land that was privatised on our once pristine lake-fronts. Looking at who owns the land along our lake shores – Wakatipu, Wanaka, Hawea, Dunstan – you see mansions, wineries, and luxury golf courses on land once owned and managed on the public’s behalf.
It’s impossible to ignore the history of this land. Much of it had been taken from Ma¯ ori through Kemp’s Deed, which left Nga¯ i Tahu and other iwi alienated from land and resources after the Crown refused to uphold its obligations.
The consequence of that was the Crown owned large parts of the high country, which could have been a significant opportunity, particularly in a time where that landscape’s value has been increasingly recognised around the world.
There were elements of tenure review that were admirable, in theory.
Farmers had, generally speaking, been good stewards of the landscape, leaving it undeveloped. When it became economically unsustainable, it made sense that the system needed to change.
Instead of ensuring sustainable farming could continue for the public benefit, the Crown allowed the value of that land to be appropriated by a select few, at the taxpayer’s considerable expense. Land that was owned by no-one, then owned by everyone, is now owned by the lucky few who can afford it. Some parts of the landscape have been all but destroyed.
There have been several wins gained through tenure review, which deserve recognition.
The creation of five conservation parks is significant, and public access to the high country has undoubtedly improved. Despite its flaws, the tenure review at Alphaburn allowed for the creation of the overwhelmingly popular Roys Peak trail overlooking Lake Wanaka.
They are dwarfed, however, by what has been lost. The repercussions of this wave of privatisation, which the public paid for, are ongoing, and will continue long after tenure review is finally dead.
Just behind Alphaburn, a Crown lease called Hillend was largely privatised through tenure review. It was bought by a property developer, who then sold it to Trade Me founder Sam Morgan for an eye-watering $25m. The land has since been split up into numerous sections, which are now for sale for around $1m each.
Wyuna Station, once a Crown lease, has a gated subdivision where some of the country’s most expensive homes have been built, including a mansion listed for sale by its Norwegian owner for $33m. On the same road, the former Crown lease at Closeburn station contains houses that sell for between $10m and $25m.
This doesn’t even begin to confront the significant biodiversity losses in the Mackenzie Basin, or the land farmers had successfully tended for generations being handed to an under-resourced Department of Conservation to look after.
Again, maybe that was the intent – providing lucrative real estate for wealthy bolthole seekers, at the expense of others.
If it was, it’s hard to envisage how tenure review has benefited the public at large, who paid for the process to happen, but the overwhelming majority of whom have had no opportunity to realise the benefit.
The future of the high country has yet to be revealed. The Crown, it seems, will continue to own and manage more than one million hectares for the forseeable future, which it does on the public’s behalf.
It’s the same challenge the Crown faced two decades ago. Perhaps this time the vision will meet reality.