CHANGES to the Land Administration Act (LAA) slated for later this year, including the addition of a diversification lease, have been designed to give pastoralists the opportunity to get involved in the growing renewables market.
The diversification lease is a new form of leasehold which will provide more flexible uses of Crown land, to include carbon farming, hydrogen, wind and solar markets, tourism, Aboriginal land management and cultural practices, grazing and livestock and horticulture.
Speaking at the Pastoralists and Graziers' Association of WA (PGA) annual conference last month, Pastoral Lands Board (PLB) chairman Tim Shackleton said the LAA amendments were the most significant reforms in decades for the management of pastoral lands.
With the diversification lease not designed to replace pastoral leases, except where the pastoralist agrees to relinquish the lease, Mr Shackleton encouraged pastoralists to embrace and take advantage of the new changes to the LAA, which are due to be introduced into parliament by the end of this year.
Part of the LAA amendments include pastoralists being given the ability to transfer existing permits to the buyer when they sell their lease, as opposed to the current system where the new owner must undertake their own diversification permit process to continue the established diversified activity.
Under the new reforms, the PLB will also have the authority to cancel, suspend, renew or amend a diversification permit.
"This will be especially valuable for proposed amendments to existing permits which can currently only be enacted following a fresh application process - even for the most minor changes," Mr Shackleton said.
The amendments also provide the ability for pastoral leases to be extended to 15 years, subject to compliance.
This is a significant change for pastoralists who are considering undertaking carbon projects, as a minimum commitment of 25 years is required in order to apply for support from the Clean Energy Regulator Emissions Reduction Fund.
"It will also help with securing bank debt and third party investment - so we think it is an absolute ripper of an improvement," Mr Shackleton said.
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While the PLB was unsuccessful in advocating for an automatic right of renewal on pastoral leases, he was hopeful that the 50-year right of renewal was not "off the table".
Under the current regulations, the terms and conditions of each pastoral lease are individually determined, but as part of the administrative changes to the LAA, there will also be a standard range of lease terms and conditions prescribed in the new regulations.
With pastoral rent methodology also recognised by the PLB as an issue causing angst among pastoralists, a working group was formed, including representatives from the PGA, to make recommendations to the government for changes to the rent methodology, with those changes accepted.
"The new methodology, which is based on CPI, will deliver a more predictable, less volatile rent outcome for pastoralists and this will, in turn, assist in business planning and budgeting," Mr Shackleton said.
"The starting point will be the lesser of the current rent or an average of your rent between 1999 and 2000.
"Market based reviews will be undertaken by the valuer general every 10 years as opposed to the current five-year cycle - and the first review will be on July 1, 2029.
"I think that is a big step in the right direction - you add that to the 50-year lease term and you are starting to see value in these reforms."
The new pastoral rent methodology is due to come into effect from July 1, 2024.
Questions from the floor to the PLB
QUESTION: How much diversification under an existing pastoral lease will make it null and void?
ANSWER: For a diversification lease to be issued over what is an existing pastoral lease, the pastoralist would have to surrender that portion of their pastoral lease.
Before doing that, the minister will ask the PLB whether the remainder of the lease is still viable as a pastoral operation, and if the board says no, there's not the numbers on the remainder of the pastoralist lease, the minister will not approve that portion to be taken out of the pastoral lease.
That number will be different depending on where you are in the State.
For example, whether you are close to the highway, what sort of country you might be looking at surrendering - and it's the call of the board to make that judgement.
Q: You put in an application for a diversification lease - does that guarantee that after you've surrendered your current lease you are going to get that?
A: We anticipate that people who want to transition to a diversification lease will want to enter into an option to lease with the government while they're tailoring the necessary approvals, such as environmental approval, negotiation of an indigenous land use agreement and so on.
They have certainty as long as they can tick all of those boxes, then they will be able to move to the diversification lease.
Surrendering of the pastoral lease won't happen until that option has been exercised by the person who wants the diversification lease who might be the pastoralist - they won't lose the pastoralist lease and not get the diversification lease.
Q: What happens if you take out a diversification lease, and it's not working, and then you want your pastoral lease back?
A: You can ask for the lease to be surrendered if you don't want to continue with the diversified uses.
Under the LAA, before pastoral leases can be granted they have to go through a competitive process.
The minister would likely consider an application by the previous pastoralist as part of that process, but it is not guaranteed that you would get your pastoral lease back.
At the end of a diversification lease, the land will return to unallocated Crown land.
We anticipate a lot of the diversification uses will be quite long-term.
because of the necessary investment into infrastructure and effort involved.
