Chapter 4
Compensation arrangements to landholders, the appropriateness of the method
of calculation of asset value and viable alternatives
Introduction
4.1
This chapter considers the current compensation arrangements for landholders
resulting from the imposition of native vegetation and legislated greenhouse
gas abatement laws, the appropriateness of the method of calculation of asset
value and whether these arrangements are adequate. This chapter also considers environmental
stewardship arrangements and other incentive schemes and initiatives as
complementary to compensation or as viable alternatives.
4.2
Many landholders and their representatives who provided evidence during
this inquiry were in favour of compensation for loss of productivity and land
value that resulted from native vegetation legislation. Many held strong views
that such laws force them to bear the financial burden of public conservation
objectives. Indeed, the commonly held view was that landholders have otherwise
productive land 'locked up' for the public good and endure loss of productivity
and land value as a result whilst also having to bear the cost burden of
managing that unproductive land. Whilst some landholders argued for
compensation to be paid for loss of productivity and diminution of land value
suffered to date, there was common interest in environmental stewardship
initiatives into the future which would support landholders, financially and
otherwise, to meet publicly beneficial environmental objectives on their land.
Current compensation arrangements
4.3
In relation to compensation per se, the Productivity Commission noted in
2004 that compensation for the impacts of native vegetation regulations
remained the 'exception rather than the rule':
In South Australia, between 1985 and 1991, compensation was
offered to landholders whose clearing applications were rejected and who agreed
to set aside the land under a heritage agreement. A similar, if somewhat more
limited, scheme has operated in Western Australia.[1]
4.4
The compensation arrangements in South Australia were amended to remove
the compensation provisions. According to the Legal Services Commission of
South Australia, the previous compensation provisions 'had the effect of
increasing the number of applications and decreasing the resources of the
Environment Department'.[2]
Landholders may now receive financial assistance to help manage the land, a
rate rebate and fencing assistance to manage native vegetation on their
properties.[3]
4.5
In Queensland, the Government provided $150 million over five years through
a vegetation management structural adjustment package. The package was
introduced in 2004 to assist farm businesses affected by the introduction of
the new Vegetation Management Framework in 2004.[4]
The package consisted of $130 million for landholders, especially primary
producers, to exist the industry; $12 million over four year to be give out
under competitive tendering processes to maintain and preserve high value
non-remnant native vegetation and other areas that are not protected; and $8
million over four years to support best management practice.[5]
4.6
The New South Wales Government has developed the Native Vegetation
Assistance Package to help farmers who experience financial hardship as a
result of the Native Vegetation Act 2003. Nine sustainable farming
grants to farmers totalling $947 000 were provided. A further
$400 000 in sustainable farming grants remains available for private
native forest operators. Exit Assistance amounting to $17.6 million was delivered
by a revolving fund administered by the Nature Conservation Trust. Four
properties have been purchased. This scheme is available for all landholders
until 30 June 2012 (funds pending).[6]
4.7
In Western Australia, landholders who voluntarily enter into
conservation covenants receive some assistance and incentives.[7]
Ongoing conservation advice is available to landholders to assist them in their
conservation efforts, up to $500 is made available for the landholder to seek
independent legal advice at the time of entering into the covenant, some
funding is available for fencing and other management and landholders may
receive rate reductions.[8]
4.8
In Tasmania, where landholders are prevented from clearing threatened
native vegetation, the Nature Conservation Act 2002 sets out the
processes and criteria for compensation.[9]
The conservation compensation committee responsible to assess the claim for
compensation must consider the extent to which the duty of care that the
landowner is being required to exercise regarding the conservation of natural
and cultural values on the relevant land exceeds the duty of care required
under the Forest Practices Code on the date of the relevant conservation
determination.[10]
4.9
It was acknowledged in evidence that whilst section 51(xxxi) of the
Constitution binds the Commonwealth in relation to compensation, there are no
requirements for the states to legislate for compensation in similar
circumstances contained in the Commonwealth Constitution as this remains a
matter for state Parliaments and Constitutions. Notwithstanding this fact, Mr
Charles Armstrong, President, NSW Farmers' Association, articulated the
complexity of awarding compensation in NSW:
...state parliament has to pass legislation relating to each
and every case. There is a principle of compensation on just terms, but it
becomes an act of parliament. It requires an act of parliament in whatever
issue to actually carry that. The situation, of course, is that you are looking
at a multitude of individuals who are being affected by this process, and then
a determination of compensation and so on. We are not absolving the state
government from responsibilities, and the enactment of legislation to block the
loophole in section 51 relates also to the enactment of legislation for fair
and reasonable compensation.[11]
Adequacy of current compensation arrangements
4.10
Whilst there was recognition of the existence of funding initiatives at
both Commonwealth and state level, the commonly held view of landholders reflected
the findings of the Productivity Commission that compensation was generally not
forthcoming. Witnesses stated that in the jurisdictions where there was
compensation, that it was generally seen as inadequate for the perceived losses
borne by landholders. In particular, witnesses voiced the view that compensation
was not available for what they saw as a restriction of their property rights
which amounted to a 'taking' by the relevant state or territory government.
4.11
In Queensland, the committee heard that the government had provided
$150 million to compensate landholders. Mr Ron Bahnisch of Property Rights
Australia commented that the criteria of the Queensland Government's
compensation scheme was such that it was not all taken up.[12]
4.12
Mr John Cotter, Agforce Queensland, also commented that the level of
compensation in Queensland was inadequate, with many property owners significantly
disadvantaged by more than $100 000. Mr Cotter stated that 'in the long term,
the devaluing of that land and the loss of potential production of that land
even now, 10 years later, would have been a greater amount than anywhere near
$100,000'.[13]
4.13
One Western Australian landholder provided evidence of his experience of
seeking compensation. After seeking approval to clear approximately 40 per cent
of 1 000 acres to run 50 head of cattle, the landholder was forced to sell
farm machinery and all cattle associated yard and materials whilst waiting on
the decision from the respective department. The farmer was offered
compensation but stated:
The Department of Agriculture offered us $100,000 in 2007.
But the offer came with so many stipulations that it would have cost us
$145,000 to accept...So we declined the offer. We have been told that by refusing
that offer, we gave up all rights to pursue the case further. We have not
pursued it because our health was suffering, and we decided that was more
important that continuing to fight this headless monster.[14]
4.14
In relation to 'takings', for example, the Coalition for Agricultural
Productivity stated that:
Compensation arrangements are avoided in almost every case,
as most of the affected property avoids being classified as
"takings." The Government should have to pay just terms compensation
for blighting of property as well as taking.[15]
Calls to improve compensation arrangements
4.15
During the inquiry, landholders and their representatives argued that
adequate compensation was necessary as native vegetation laws had resulted in
harm in three main areas: diminution of land asset value; adverse impact on
productivity; and restriction on property rights. Landholders also argued that
compensation should be made available in recognition that they are being
required to manage land for the public good.
Compensation for loss of land value
and productivity
4.16
The committee has outlined the evidence provided in relation to loss of land
asset value in Chapter 3. In relation to loss of productivity, the NSW Farmers'
Association stated:
Farmers value both native vegetation and biodiversity and
voluntarily retain certain native vegetation in mosaic patterns on their land.
Where this retention goes beyond a reasonable duty of care, however, the
Association believes that farmers must be paid for the conservation service at
a rate that compensates for the lost value of production.[16]
4.17
Growcom held a similar view:
Growcom supports the provision of financial compensation to
landholders whose properties become subject to any newly introduced laws that
prohibit them from clearing vegetation, including regrowth, on areas that were
able to be cleared and used for growing crops previously. As removing areas
from production reduces the value of that property to any future buyer, we see
it as a matter of equity that landowners be compensated for any such government
policy.[17]
4.18
The Western Australian Farmers Federation (WAFarmers) supported compensation
by stating:
WAFarmers believes that there needs to be realistic provision
for equity adjustment (compensation) for the loss of potential and real
productive capacity on freehold land in the name of public good and to
encourage investment in securing and preserving areas of native vegetation, or
re-establishing native ecosystems.[18]
4.19
Whilst arguing for adequate compensation, Mr Armstrong of the National
Farmers' Federation put a figure on the loss in potential income as a result of
native vegetation legislation:
In New South Wales, no compensation was offered to farmers to
cover the lost income and land value of areas of land locked up and sterilised
from production. Again, the Australian Farm Institute did some work in this
regard, as did the Productivity Commission and ABARE, and the estimate is that
there is a $600 million per year loss in potential income as a result of these
laws. There are no arrangements in place to compensate farmers for that loss of
land value and existing rights resulting from native vegetation legislation or
other biodiversity conservation policy.[19]
Compensation for a change in
property rights
4.20
An argument strongly voiced by many submitters was that native
vegetation laws had restricted their property rights and therefore compensation
should be provided. Many submitters viewed that they owned the land but
governments were no longer allowing them to utilise it in the ways they wished
and in effect had 'stolen' it by stealth.[20]
Indeed, a common view was that landholders had effectively lost their rights of
ownership but had retained all the responsibility that ownership entailed and
therefore they should be compensated for the change in property rights.
4.21
Mr Robert and Mrs Sally Colley stated this view:
It is extremely frustrating to own something but be dictated
to as to how to use it. This land is owned by us but we can't do what we
want with it (even though we consider the request to clear the land was
reasonable and modest and that we can demonstrate good management and great
pastoral care and sensitivity over generations). Nor have we been compensated
for our loss. We have been forced to forego income, with no compensation or
acknowledgement or apology.[21]
4.22
Mr Ken Jones also articulated a view shared by many landholders before
this inquiry:
Native vegetation laws and legislated greenhouse gas
abatement measures, to varying degrees, impose restrictions and limit what were
prior legitimate commercial activities of private landholders.
At the same time private landholders are still required to
manage and maintain the land while being denied the opportunity for commercial
benefits from the expenditure of their time, money and other resources. e.g.
suppressing invasive weeds etc.[22]
4.23
Using the analogy of development flats, Mr Armstrong, the NSW Farmers'
Association, argued a similar case:
It is really not just country property; it is all property.
The problem is that most, if not all, enterprise in Australia has been based on
the notion of private ownership. People are not going to invest and continue to
invest in private ownership of property and run those properties as private
enterprises to the benefit of Australia as a whole if we continue to have this
uncertainty, where the rules are changed five minutes after you have purchased
the property. We have been using the example to simplify it even further than
the development flats—the case of someone who has just bought a three-bedroom
home, where they are very proud of their purchase and everything, and the
government or a compliance officer knocks on their door the next morning and
says, ‘Sorry, you’ve got to lock up the third bedroom.' That is exactly what is
happening, in a very simplistic way, on farms. It is a very complex issue.
There are plenty of examples where loss of value has occurred through both
threatened species and the Native Vegetation Conservation Act.[23]
4.24
AgForce Queensland provided evidence of what it argued was a shift in
the concept of land ownership, arguing that the current official attitude is
one which recognises ownership as 'akin to something more like stewardship'
which is reflected in the current policy discourse of 'public good on private
land':[24]
AgForce contends that while the exact rights of freehold
title must be at times subject to public scrutiny, serious and continual
erosion of these rights should be subject to significant debate and are best
achieved through a stewardship model. This is a basic right which ensures that
landholders are not continually forced to carry the burden of whatever public
good which the government of the day has decided on a political whim to change
their minds on.[25]
4.25
The view that common law rights of land ownership had been eroded was
held by p&e Law. Mr Lestar Manning commented 'it has got to the extent now
where you can buy a property and you cannot deal with it for the purpose for
which you bought it'.[26]
p&e Law noted that without a change in approach, potential impacts may
include increased loss of equity in property; lack of certainty which would
increasingly undermine investment confidence; declining local access to
suppliers and support services; reduced options in terms of succession and
young people leaving the rural sector.[27]
The respective outcomes may, according to p&e Law impact on cultural
heritage, food security, biosecurity, biodiversity and the capacity to manage
the environment.[28]
Provisions relating to acquisition
of property
4.26
The question of land title and acquisition of property in relation to
compensation was central to the inquiry. The common sentiment amongst landholders
and their representatives was articulated by p&e Law:
These common law interests in land have been taken away from
landholders without any just compensation under the guise of regulation on the
premise that no property has been transferred to government and therefore no
acquisition has occurred.[29]
4.27
The committee received evidence which held the view that there had been
no acquisition of land under the various native vegetation laws and therefor
compensation was not payable. Mr Tom Grosskopf put the position of the NSW
Government that generally there has been no acquisition of land and therefore
no compensation:
The approach in New South Wales has been that there is no
acquisition of property. We did have a structural adjustment package attached to
the Native Vegetation Act, where four farmers were assisted to exit their
properties, to the value of $17.6 million paid to farmers. In that case, there
was a clear demonstration that the properties had become unviable as a result
of an inability to clear. There was a hardship test and a set of financial
circumstances examined and explored by our Rural Assistance Authority and then
an offer at market value was offered to those properties. Those properties are
now going through a process of having management plans established and
conservation covenants put on them and then they will be revolved back into the
market. A property which was purchased for $1.2 million up on the North Coast
was resold, following conservation covenants being established on the property,
for exactly the same as the purchase price.[30]
4.28
The Australian Network of Environmental Defender's Offices (ANEDO)
questioned whether compensation is payable for the imposition of native
vegetation laws arguing that such a position is not legally tenable as:
It has long been accepted under the common law and through
High Court decisions that Government regulation of activities that can
occur on private property (such as whether land may be cleared or not) does not
constitute an acquisition of property and therefore no right to
compensation is activated.[31]
4.29
Drawing on an example of zoning laws in local plans, the ANEDO stated
that whilst a particular zoning may limit the development activities on a
parcel of land and may therefore affect land prices, this is 'not tantamount to
an acquisition of land as the zoning does not affect the property rights in the
land itself':
Therefore, a state government implementing native vegetation
laws to control or prohibit land clearing as a result of Government policy to regulate
and protect natural resources is clearly not an acquisition for which
compensation is payable.[32]
4.30
ANEDO noted that there was no legislation in any jurisdiction other than
the Northern Territory with provisions requiring compensation for the acquisition
of property or any lesser modification of any property right. Thus, such
jurisdictions can acquire on any terms they choose. ANEDO also highlighted that
whilst there is no acquisition of property involved in the imposition of native
vegetation laws, 'even if there was an acquisition, there is no right to
compensation under state constitutions'.[33]
4.31
However, drawing on the example of the Newcrest mining case, ANEDO
recognised that there are some circumstances where regulation of land may need
to provoke reconsideration of the longstanding legal principle that regulation
of property does not trigger compensation as it does not amount to acquisition:
In that case the right to mine under mining tenements was
taken away but not the mining tenements themselves. In reality, although it was
regulation, it amounted to sterilisation of those mining tenements, because
there was no other way to use that property, for example.[34]
4.32
In recognising the difficulties for landholders in relation to the
restrictions imposed on them by the native vegetation legislation, Ms Walmsley
of ANEDO held that:
We can understand the frustration, but this is where the
government and different organisations need to work with farmers to work out
different uses of the land, whether it is a private conservation or whether
there are payments for ecosystem services, so that the farmer can get income
from that land, even if it is not in the particular way that was originally
envisaged.[35]
4.33
Some landholders argued that restrictions on land use in many instances
which resulted in loss of land for production purposes constituted a form of acquisition.
The AFG continued:
For example, New South Wales has just terms laws but this
only applies when the property is acquired but not when the land use is
restricted. Restricting land use can, depending on the restrictions, be just
the same as a loss in area available for use, i.e. a loss due to acquisition.[36]
4.34
Mr Lestar Manning of p&e Law argued that the High Court had noted in
the past that if regulation goes as far as to sterilise the land, then it can
be tantamount to a taking of that land.[37]
He held that regardless of whether acquisition had taken place, however, property
rights should be recognised:
When a farmer buys a piece of land to farm which is vegetated
and then is told he cannot clear the land, that goes to the fundamental root of
that title. There is common law dealing with what is called the profit a
prendre, which is an ability typically to take something from the land rather
than to keep something on the land. It is a legal mechanism which is available
to be used and has been used in Queensland through the Forestry Act to provide
for carbon sequestrated in trees. Those basic property rights are affected by
the regulation of land. I am saying that, to treat the farmers and rural
communities fairly, there needs to be a recognition that, irrespective of
whether or not there is an acquisition in that strict legal sense, what needs
to occur is that it has to be dealt with as a property right, which then would be
dealt with under acquisition of land act provisions in each state.[38]
4.35
Mr Manning concluded:
There is an injustice; the state vegetation-clearing laws in
Queensland have imposed restrictions on rural communities. In fact, one can see
even in some speeches to the legislation in the state parliament that the laws
are quite clearly designed to impact only on rural, Indigenous or agricultural
pursuits. That is discriminatory.[39]
4.36
ANEDO highlighted public policy reasons along with the legal position as
to why compensation should not be provided for the imposition of native
vegetation laws. These include the possibility that a climate is created
whereby governments are reluctant to regulate property for fear of financial
repercussions leading potentially to a stagnation of environmentally beneficial
action. Other possible ramifications include complex and costly litigation over
what particular regulations require compensation and the attribution of rights
to compensation could, according to ANEDO, lead to environmental degradation as
landholders could use their land in anyway they see fit.[40]
Compensation in relation to maintenance
of a public good
4.37
Many landowners were vocal on the need for compensation for what they
saw as maintaining a public good for the benefit of the community as a whole
but at their expense. It was noted that landholders were still required to pay
rates, to undertake weed control and other routine management activities
without compensation.[41]
Mr Wade Bidstrup
commented:
Surely if this land is locked up for the public good then the
government should pay the rates, maintain the fences and ensure that weeds and
feral animals are controlled, not to mention compensate the landholder fairly
for the loss of production attributable to that land and/or compensate the
landholder to the market value of the land. If the government is not prepared
to do that than it should be prepared to pay the landholder to maintain the
land, given that for all intents and purposes he/she no longer owns it given
that they have little say in how it is operated.[42]
4.38
Both the National Farmers' Federation and the NSW Farmers' Association
commented on this issue. The NSW Farmers' Association argued that the 'flawed'
landscape conservation investment model results in a situation where regulation
is used to force private investment for the public good, upon a small part of
the community, mainly farmers. The cost shift reflects the lack of a mechanism
to fund what is desired by the public as a whole. The NSW Farmers' Association
concluded that:
This fact is masked by populist debates that focus on
land-clearing laws, rather than highlighting the larger problem of funding for
community aspirations, and the fairness or feasibility of using regulation to
force some to pay (often unwillingly) whilst the rest of the community stand by.[43]
4.39
Mrs D Warm, National Farmers' Federation, commented:
...if we do want to achieve certain environmental outcomes for
the public good then the public have to contribute to maintaining those
outcomes; and if they do not wish to, then obviously part of that role has to
be programs and compensatory measures. So we have identified a range of
solutions to ensure that, if those public outcomes are sought, there are
mechanisms whereby the farmer is compensated or provided with opportunities to
assist. However, there needs to be balance, and that balance needs to ensure
that we maintain the productivity outcomes we need for farming in Australia,
that we have food and fibre available for domestic and international
consumption and use and so that we can continue to maintain very strong, viable
regional communities in this country.[44]
4.40
Mr Claude Cassegrain also argued for compensation:
Inter alia, the State native vegetation laws effectively
transferred the control over the flora and fauna from us to the State allegedly
for the good of society generally but without compensation for us.[45]
4.41
The argument was also put to the committee that farmers were
contributing to the reduction of Australia's greenhouse gas production through
the retention of trees and should be compensated as they are forgoing potential
income in doing so.[46]
The appropriateness of the method of calculation of asset value in the
determination of compensation arrangements
4.42
The AFG took the view that compensation arrangements should be developed
by the Commonwealth and state governments in consultation with landholders for
activation when 'there is a decline in a landholders' asset value or available
productive use as a direct result of legislation and include robust
socio-economic impact analysis'.[47]
4.43
The National Farmers' Federation argued that
...when it comes to compensation we are looking at market based
mechanisms. It is impossible for a government to come in, regulate and then
say, 'We’re going to give you this amount because we think that this is the
amount that is just, or on just terms.' That needs to be arrived at through a
collaborative approach using, as we have recommended for a market based
mechanism, something like the environmental stewardship program to come to
realise an agreed amount that is acceptable to both parties. This has broader
ramifications.[48]
4.44
Mr John Butcher commented on compensation arrangements and stated that a
universal compensation rate would not be appropriate as this would not
distribute compensation in a fair manner. He went on to argue that the method
of calculation must take into account each individual case with landholders
being required to apply for and justify the level of compensation sought. Compensation
should take into account the lost productive capacity and be paid on the length
of time that the landholder was affected. Landholders should also be
compensated for the future upkeep of the affected land and should not have to
pay rates for that area affected, unless they can be allowed to make some use
of it.[49]
The need for reform
4.45
A substantial number of submissions before the inquiry came from persons
directly affected by the native vegetation legislation, namely landholders.
Many argued that the legislation dealt them a double blow, maintaining that
productivity had fallen and land under the native vegetation legislation had
declined in value whilst the financial burden for maintaining land subjected to
native vegetation restrictions remained squarely with them. The NSW Farmers'
Association put it another way:
The flawed landscape conservation investment model results in
a situation where regulation is used to force private investment for the public
good, upon a small part of the community...Regulation is covertly being used to
shift the costs to some people because collectively we have not created a
mechanism to fund what is desired by the public as a whole.[50]
4.46
Indeed, many landholders argued that whilst compensation for diminution
of land asset value and productivity should be forthcoming, emphasis needed to
be placed on reforming the current system to enable landholders to meet public
conservation objectives on their land into the future without bearing an
unreasonable financial burden for doing so.
4.47
AgForce Queensland argued that in order to manage their natural resources,
landholders needed certainty to give them confidence to invest in sustainable
management practices and then financiers the confidence to invest in such
investment. It added that:
During the last decade particularly, landholders resource
security or property rights, has increasingly come under significant threat
from Federal and State Government policies. What has become difficult to
resolve are the increasingly strident calls for private landholders to forgo
their commercial aspirations in favour of public benefits for which there is no
acknowledgement, let alone financial assistance, structural adjustment or
compensation.[51]
4.48
The impact on confidence in the market was highlighted by p&e Law
which called for a national scheme to rectify the 'unequitable burden on rural
communities' in relation to native vegetation laws, greenhouse gas abatement
and climate change:
This scheme must recognise the common law right of land
owners (beneficial title) to the trees, vegetation and soil in which carbon is
temporally sequestrated.
If it does not recognise common-law right the sovereign risk
(later government legislation taking away rights without acquisition) will
deter confidence in any market created.
If it does not recognise common law right there will be limited
capacity to enable landowners to be equitably compensated for the carbon
temporaly sequestrated in the trees, vegetation and soil of their land as a
result of regulation and prohibition of clearing native vegetation.[52]
4.49
The NSW Farmers' Association warned that 'forced investment by
landowners in things that give them no economic return must reach limits of
practicality and effectiveness'.[53]
It held that whilst compensation was required where the costs of public goods
have been transferred onto farmers, the priority for reforms should rest with
the establishment of laws and planning systems that enable sustainable
development in regional Australia:
Primarily it is about the investment of public and private
capital in sustaining the future of our continent and our community. The
current 'business model' for conservation on private land – based on punitive
regulation and billion dollar incentive schemes such as the Caring for Country
Program – is demonstrably wasteful, socially destructive and counterproductive.
As numerous studies have found, it does not work, and cannot be expected to
work.[54]
4.50
Mr Armstrong of the National Farmers' Federation highlighted the need
for policy reform alongside compensation:
We implore you to recommend the provision of just terms
compensation in all cases where private landholders are required by law to
provide public conservation services. This just terms compensation must
complement policy reform capable of restoring balance and economic intelligence
to the policy framework affecting farmland and natural resources. Our members
need laws and planning systems that enable sustainable development in regional
Australia and that support farming communities in designing their own future.[55]
4.51
The principle that landholders be financially compensated for managing
public conservation objectives on their land was supported by the Productivity
Commission which held that publicly demanded conservation should be paid for:
Over and above agreed landholder responsibilities, additional
conservation apparently demanded by society (for example, to achieve
biodiversity, threatened species and greenhouse objectives), should be
purchased from landholders where intervention is deemed cost-effective.[56]
4.52
Many landholders before this inquiry supported this view including Mr
Geoff Hewitt who said:
...the costs of this [vegetation management] to the affected
landholders is real and significant. It is entirely unacceptable that this cost
is imposed by Governments in order to achieve community wide benefits without
the wider community sharing the cost. It must be remembered that veg management
practices were not just tolerated by past Goverments, in many cases they were
required under the terms of State Government Leases.[57]
4.53
The NSW Farmers' Association argued that rather than engage in expensive
structural adjustment to deliver biodiversity conservation undertakings,
governments elected to force farmers, through native vegetation legislation, to
conserve native vegetation and thereby establish 'proxy national parks on private
land'.[58]
The association's President, Mr Armstrong continued:
In relation to biodiversity policy and native vegetation, we
have demonstrated in our submission that the current biodiversity policy
applying to Australian farmers is designed to create proxy national parks on
private land at no cost to the public purse—and, in so doing, offset increases
in fossil fuel emissions from coal fired power stations, which have increased
more than 50 per cent since 1990. With regard to forestry, the regional forest
agreement process was used to convert a significant proportion of the crown
forest estate to national park. The program was underpinned by a structural
adjustment program, with several hundreds of millions of dollars of
compensation provided to timber mills and forestry workers, including for
retraining and exit schemes. In contrast, when delivering promises to protect
native vegetation on private farms, governments took an entirely different
approach to that taken to forestry.[59]
4.54
The National Farmers' Federation stated that farmers currently provide,
'either voluntarily or by legislation, a range of environmental outcomes on
behalf of the entire community yet they bear up to 100% of the cost with little
public recognition' and that:[60]
In the case of conservation of native vegetation, landholders
may face identifiable costs in terms of opportunity cost of production on the
land foregone and the ongoing maintenance costs of managing the land to retain
its conservation values.
As a consequence landholders are under ever increasing
pressure to meet community expectations for the preservation of environmental
values. However, at the same time there is little made available for the
landholder in terms of recompense for loss of property rights, productive land
or future development potential.[61]
Environmental stewardship
initiatives and other mechanisms
4.55
The concept of an environmental stewardship arrangement whereby
landholders were supported both financially and by way of other resources to
manage and protect native vegetation on behalf of the Australian community was
strongly supported in evidence before this inquiry. Mr Denzel Clarke, as one
case in point, suggested that landholders be paid to manage native vegetation
on their land as an alternative to compensation:
If the State Federal Governments believe native vegetation is
more valuable than productive grazing land or farming land they should prove it
and place a value on native vegetation and an annual earning yield. The
commercial market says native vegetation has no value. Governments should pay a
yearly rental of 10% of the average land value to the property owner to manage
the protection of the native vegetation.[62]
4.56
Many stakeholders argued that establishing or expanding environmental
stewardship arrangements was a viable way forward for both landholders and
wider community. Mr Angus Atkinson, who argued in favour of an environmental
stewardship approach, drew on the example of a pilot stewardship program called
the WEST 2000 Plus's Enterprise Based Conservation EBC established under a
joint Commonwealth and NSW government funded program to assist landholders in
the Western Division to highlight the effectiveness of stewardship programs:
The EBC program paid landholders for managing parts of their
property for conservation. As a result over 70,000 hectares was managed per
year for less than $140,000. This program clearly showed that landholders do
not need compensation but that a well designed Government program can deliver
better environmental outcomes than ineffective and expensive legislation.[63]
4.57
The Cobar Vegetation Management Committee argued in favour of what it
called a 'native vegetation management levy' which would operate like the
Medicare levy and would 'compensate individual landholders for their inputs,
lost production and reduced land asset value'.[64]
4.58
However, ANEDO held the view that incentives which encouraged
landholders to conserve and protect the high conservation value of their land
should be pursued and supported in favour of compensation for the imposition of
native vegetation laws which it considered inconsistent with legal principles.[65]
4.59
WAFarmers, which has previously called for compensation for restrictions
on farmers' property, noted the counter-argument that compensation would lead
to a transfer of resources from the taxpayer which would not deliver a
measurable improvement in agricultural productivity, environmental outcomes or
social welfare.[66]
WAFarmers took the view that as current land clearing restrictions are not
delivering on these aspirations, alternative arrangements could encompass
'market-based incentives, taxation based or through the allocation of public
funds, or some combination of all of these'.
4.60
ANEDO supported the establishment of a comprehensive legislative scheme to
promote incentive mechanisms and facilitate payments for ecosystem services and
in drawing on the example of structural adjustment packages in the fishing and
timber industries, stated:
In addition, in certain circumstances, structural adjustment
schemes may be appropriate as an acknowledgement that although there is no
right to compensation, certain landholders and businesses will suffer economic
and social hardship from environmental regulation.[67]
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