Irrigation Legislation (Freehold Tenures) Amendment Bill
IRRIGATION LEGISLATION (FREEHOLD TENURES) AMENDMENT BILL
Bill introduced and read a first time.
The Hon. E. P. PICKERING: (Minister for Energy, and Minister for Local Government and Co-operatives), on behalf of the Hon. R. J. Webster [12.32]: I move:
The objects of the bill before the House, which will amend the Crown Lands (Continued Tenures) Act 1989, the Hay Irrigation Act 1902 and the Wentworth Irrigation Act 1890, are twofold. Firstly, this bill will provide a mechanism for removing restrictions on freehold land in irrigation areas. Secondly, the bill will remove the statutory prohibition on corporations and trustees holding agricultural land in irrigation areas. The bill is another step in the Government's program of irrigation area reform and deregulation.
Before I deal with the substantive provisions of the bill, I take this opportunity to explain to honourable members the rather complex system of land administration and tenure in irrigation areas and the maze of legislation that governs dealings in land in such areas. In this regard honourable members will appreciate the substantial impact that these reforms will have in simplifying land transactions and land usage in irrigation areas by facilitating the removal of government controls. In particular the Government, through this bill, has sought to redress the inconsistencies that exist between landholders in irrigation areas and the holders of other lands in relation to their rights to apply to the Minister to remove the requirements for ministerial consent to transfer that apply to their land.
The right to derestrict, which in respect of land outside irrigation areas has existed for over 20 years, has been denied to the holders of similar land situated in the irrigation areas of the State. This bill will sweep away this anomaly in that it will place holders of land in irrigation areas in the same position as holders of land in the eastern and central division of the State with respect to their entitlement to remove restrictions on the transfer of their land. To understand the nature of the reforms introduced by the bill it is necessary to have a brief understanding of the present scheme which governs land dealings in irrigation areas.
Generally, all dealings in land within irrigation areas, with the exception of some derestricted freehold urban land and land that is situated in the Curlwaa and Hay irrigation areas, are subject to the provisions of the Crown Lands (Continued Tenures) Act 1989. In respect of land in the Curlwaa and Hay irrigation areas, such land is vested in the Water Administration Ministerial Corporation and all dealings affecting such land are governed by the Wentworth Irrigation Act 1890, the Hay Irrigation Act 1902 and the Irrigation Act 1912, which are essentially, in respect to controls on the transfer of the land, mirror versions of the Crown Lands (Continued Tenures) Act.
Generally, all farming land in irrigation areas is subject to restrictions on dealings in that the land cannot be transferred, leased, subleased, assigned or otherwise dealt with without obtaining the Minister's consent or in respect of land in the Hay and Wentworth irrigation areas, the consent of the Water Administration Ministerial Corporation. This restriction applies not only to leasehold land or land in course of purchase from the Crown or ministerial corporation but also to freehold land. In this speech, for ease of explanation, I will refer to both the Minister and the Water Administration Ministerial Corporation as the consent authority.
The current legislation requires that an application must be made to the relevant consent authority to obtain consent to a dealing with the land and the consent authority has a discretion to either grant or refuse consent. Land which is subject to such restrictions is known as restricted title land. However, the consent authority may not grant consent to a dealing if in the consent authority's opinion the dealing will result in the person who will take the benefit of the dealing holding an area of land which is substantially in excess of a home maintenance area. The home maintenance area principle as a land administration policy was introduced in 1909 for the purpose of preventing the undue aggregation of land which was being disposed of by the Crown and thereby achieving the closer settlement of land. The home maintenance area concept applies to restricted title land both within and outside irrigation areas.
In essence the home maintenance area concept is intended to prevent a person from aggregating lands in excess of an area considered sufficient for the maintenance in average seasons and in average circumstances of an average family. A husband and
wife cannot separately hold title to land within an irrigation area if such an area exceeds a home maintenance area. The accepted home maintenance area standard for horticulture farms in irrigation areas is 100 hectares and 600 hectares for mixed farms. In 1971 legislation was enacted to authorise the derestriction; that is, the removal of the requirement for the Minister's consent to a dealing of restricted title freehold land where the holder paid a derestriction fee to the State. This fee is currently prescribed at 3 per cent of the land value of the land. The rationale for the payment of the fee is that unrestricted title land is more valuable than restricted title land and that the State should consequently share in the increased value brought about by the removal of restrictions affecting that land.
This reform was introduced in recognition of the fact that the traditional objective of closer settlement had largely been accomplished and that the economic circumstances of the 1970s called for a legislative scheme which did not hinder appropriate farm build-up in the interests of maintaining the viability of farm enterprises. The 1971 legislation did not apply to land within irrigation areas except in the case of non-farming land. From this distance it cannot be said with certainty why the 1971 amendments were not applied to irrigation areas. However, it seems likely that because the irrigation areas represented the most successful closer settlement project in the State and in 1971 the concept of closer settlement and home maintenance areas still had wide support and relevance in irrigation areas it was decided by the government of the day not to authorise derestriction in these areas.
It may also have been the case that the economic conditions that led to the need to break down the scheme outside irrigation areas were not present in irrigation areas. In the absence of any clear reasons for excluding the irrigation areas from the 1971 amendments, and given that economic and farming conditions have changed drastically since 1971, it is the Government's view that the time has come to sweep away these unnecessary restrictions. The Crown Lands (Continued Tenures) Act contains specific provisions which prohibit corporations or trustees from holding farming land in irrigation areas whether that land is freehold, incomplete purchase or leasehold. No statutory restrictions of this type apply elsewhere in the State, although as a matter of longstanding policy adopted by all governments since 1909 corporations or trustees are not permitted to hold restricted title freehold land or land held under incomplete purchase or lease if that land is farming land. However, unlike the holders of freehold farming land in irrigation areas, the holders of freehold land outside such areas can derestrict their titles, in which case corporations and trustees may acquire these lands.
The purpose of this policy prohibition is to protect the home maintenance area principle. If a corporation or trust were allowed to hold restricted title land, the restrictions on the aggregation of land could effectively be avoided by a dealing in the shares of the corporation or by the appointment of beneficiaries by a trustee. Neither of these dealings would be subject to ministerial control. The restrictive nature of these statutory prohibitions in irrigation areas is illustrated by the problem confronting the Coomealla Memorial Club Limited within the Coomealla irrigation area. The club has for some time sought to acquire an adjacent irrigation farm to expand its recreational facilities. However, due to its status as a corporation it has been prohibited from doing so.
Similarly, corporations involved in the horticulture production industry are also prevented from acquiring lands in these areas due to the existence of the statutory prohibition. The bill, by removing this prohibition and providing for derestriction, will enable corporations to own land in irrigation areas. In this regard the only way in which a corporation may acquire such land is if the land is, in the first instance, derestricted in accordance with the new amendments. Last, I might also point out to honourable members that, with the projected privatisation of irrigation areas in the near future, it is important that this bill be enacted if the full efficiencies which will flow from privatisation of irrigation areas are to be realised.
I turn now to the substantive provisions of the bill. The bill provides, through its amendments to the Crown Lands (Continued Tenures) Act, the Hay Irrigation Act and the Wentworth Irrigation Act, that the holder of land in an irrigation area may apply to the Minister for the issue of a certificate that the land can be transferred or otherwise dealt with without the Minister's consent; that is, the land may be derestricted. The fee for such an application will be an amount equivalent to 3 per cent of the land value. However, if that land does not exceed two hectares or if the land is declared to be non-farming land and is suitable for residential, commercial, industrial or business purposes, holders of such land will be able to continue to apply to the Minister to derestrict their land. This is the position under the present law and no derestriction fee is payable in these cases.
Schedule 2 to the bill amends the Crown Lands (Continued Tenures) Act by removing the prohibition on corporations or trustees owning land in irrigation areas, which similarly reflects the position that exists in the eastern and central division of the State. However, as outlined earlier, this will not serve to alter the Government's current policy, which will continue to protect certain restricted title land of a farming nature from being acquired by corporations and trustees. In conclusion, this bill will serve to progress land and water reforms in irrigation areas. I commend the bill to the House.
Debate adjourned on motion by the Hon. K. J. Enderbury.
That this bill be now read a second time.