Mäori Affairs Minister, Hon Parekura Horomia said the Government has resolved to begin negotiations with the owners of the Mäori Reserved Lands to address the issue of past rental losses.

As part of the passage of the 1997 reforms to Mäori Reserved Land, Parliament resolved unanimously to address the question of the past rental losses to the owners of this land. “

"For many years the rents they could charge were restricted and 21 year rental review periods meant those rents declined quickly in value during a time of high inflation,” said Mr Horomia.

“I will be working with my colleagues the Minister of Finance and the Minister for Industry and Regional Development to develop options. We hope that a resolution to this long-standing issue can be achieved, said Mr Horomia.

“We have appointed Mr Ray Chappell, who has had a lengthy involvement with this issue, to lead the negotiations from the Government side. Negotiations are expected to begin shortly.

These negotiations are intended to complete the reform process by which the leases of Mäori reserved land are placed on a commercial basis for the first time.

The negotiations will deal with their rental losses suffered by the owner organisations that administer the reserved lands. These organisations include the Wakatu Incorporation, the Mawhera Incorporation, the Paraninihi ki Waitotara Incorporation and the Wellington and Palmerston North Tenths Trusts.

Backgrounder
The Mäori Reserved Lands

Extent and Location

The Mäori Reserved lands total approximately 26,000 hectares and are held in 2,087 perpetually renewable leases. The main concentrations are in Greymouth, Nelson, Motueka, Wellington, Palmerston North and southern Taranaki.

The reserves were created in a number of ways. In Taranaki, they are made up of land confiscated by the Crown and subsequently returned to Mäori ownership. Elsewhere, they were created following Crown purchases and a commitment, as part of those purchases, to establish reserves.

Administration and ownership

For much of their more than 120 year existence the reserved lands have been administered on behalf of their owners by the Public and Mäori Trustees. In 1977, in response to the concerns and wishes of owners, a number of owner organisations were established to carry out this task and to hold the titles to the lands.

The major owner organisations are: In Greymouth - the Mawhera Incorporation, in Nelson and Motueka - the Wakatu Incorporation, in Taranaki - the Paraninihi ki Waitotara Incorporation and in Palmerston North and Wellington - the Wellington and Palmerston North Tenths Trusts.

Provisions of perpetually renewable leases

The reserves are leased to a mixture of private individuals, companies and others. Until 1997, rents were restricted by law to 5% of the unimproved value for rural land and 4% of the unimproved value for urban land. Rents were reviewed only every 21 years.

Reform of lease conditions

The Mäori Reserved Land Amendment Act of 1997 provided for a transition to market rents beginning in 2001. It also moved the rent review period to seven years. The Act allowed these changes to be phased in over seven years beginning this year.

In addition, lessees were required to give the land-owners a right of first refusal to buy should they wish to sell or transfer the lease outside their immediate family. The latter proposal was intended to accommodate the desire of some of the owners of the reserved lands to gain full control of their land.

Compensation

The 1997 Act provided compensation to land-owners for the delay in the transition to market rents following the passage of the Act.

Lessees received compensation for the changes to their lease conditions, including the move to market rents and shorter rent review periods.

This compensation could be determined in two ways, through a formula contained in the Act or by a determination of the Land Valuation Tribunal. Those who chose the formula received their compensation in 1998. Those who chose the second option had their ‘test-cases’ heard by the Land Valuation Tribunal earlier this year. An appeal by the Crown against the decision of the Tribunal is to be heard in the High Court.

During the passage of the reform legislation Parliament also heard representations from the owners of the reserved lands about past rental losses. In response, Parliament unanimously agreed that past rental losses to the land-owners should be addressed by the Government.

ENDS

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