29 March 2001 Media Statement

Solution to ensure equity in lessees' compensation

Finance Minister Michael Cullen tonight announced that the Government had reached agreement with Federated Farmers and the Maori reserved land leaseholders which will ensure fair treatment without need for legislation.

The deal was agreed at a meeting in Dr Cullen's office with Lyn Williams, spokesperson for the West Coast Lessees Association, the Association's lawyers, Chapman Tripp, PricewaterhouseCoopers partner, John Shewan, Alistair Polson of Federated Farmers and representatives of Te Puni Kokiri and the Crown Law Office.

"Ensuring taxation equity between those leaseholders who were compensated under the first formula and those who are about to argue their case before the Land Valuation Tribunal was always the Government's only objective in this issue and I am satisfied it has been achieved," Dr Cullen said.

Both parties - the Crown Law Office for the Government and the lawyers for the leaseholders - have agreed to specify in their submissions before the Tribunal that they expect the Tribunal in calculating compensation to take into account the impact of tax on cash flows.

It was agreed that a market value approach to compensation does incorporate the impact of tax on cash flows.

"What this means in effect is that both sets of leaseholders will be compensated on a net of tax basis.

"I am pleased that this will avoid the need for the Government to subject the House to urgency and to further hasty legislation of the type enacted by the previous government," Dr Cullen said.

ENDS

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