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2. Pastoral Leases
The High Court in its Wik decision confirmed that native title may, continue to exist on land subject to a pastoral lease. However, where there is a conflict between the rights of native title holders and those of the pastoralist, the pastoralist's rights prevail.
Since it was handed down on 23 December 1996, the National Farmers Federation, members of the National Party and others have condemned the decision and urged the Government to legislate to extinguish native title on pastoral leases.
A lot of this campaign is, however; based on misinformation and scare mongering, and may mask another long-running agenda: to have such leaseholds upgraded to freehold or to have the range of activities allowable on a pastoral lease expanded. If this agenda were achieved it would constitute a windfall to only a few Australians at the expense of native titleholders and the broader public - the people of Australia.
A distinction must be drawn between farming and pastoralism. The NFF's ad campaign blurred this distinction. The vast majority of Australian farmers hold freehold land and are unaffected by the Wik decision.
What is a pastoral lease?
A pastoral lease has always been a limited form of property right. Land under a pastoral lease remains Crown land i.e. land owned collectively by the people of Australia.
A pastoral lease gives the lease-holder the right to use the land for pastoral purposes, including raising livestock and developing the infrastructure necessary for pastoralism - fences, yards, bores, accommodation, etc.
Pastoral leases are governed by the relevant State Government statutes. Lease terms and conditions vary greatly from one State to another. In other words the rights of the pastoralist are set out in various Land Acts. Specific conditions and prohibitions are also often spelt out in individual leases.
In most States leasehold regimes are consistent. In Queensland, however, there may be as many as 70 forms of pastoral lease to which different rights and conditions attach.
What they are not
As indicated above, pastoral leases do not give pastoralists full ownership rights. The pastoralist does not own the land, but pays rent to the Crown. At the expiry of the lease, the lease reverts to the Crown.
How they evolved
The system of leasehold tenure of pastoral land is unique to Australia and New Zealand and evolved last century to control the activities of squatters and to protect the rights of Indigenous peoples. By granting pastoral leases, governments retained both flexibility and control over the vast tracts of land used for pastoral purposes.
As Justice Toohey wrote in the Wik judgement the evolution of this form of land tenure 'reflects the desire of the pastoralist for some form of security of title and clear intention of the Crown that the pastoralist should not acquire the freehold of large areas of land, the future use of which could not be readily foreseen'.
How much land is involved and where?
Pastoral leases cover much of Australia's rangelands - the arid and semi-arid areas and the tropical savannas - about 40 per cent of the continent.
Rangeland pastoralism is a low-intensity land use and individual pastoral enterprises generally occupy very large areas of land. For example, the Holroyd River lease in the Wik case covered approximately 2830 sq. kms and its carrying capacity was one beast for every 60 acres.
Who owns pastoral leases?
Although 40 per cent of Australia is covered by such leases there are relatively few producers. Pastoral leaseholders are not necessarily among the struggling farmers suggested in the NFF advertisements. Some of Australia's wealthiest people and corporations have major pastoral holdings, including Kerry Packer. Overseas interests also have a big stake. The Sultan of Brunei has interests in over 10,000 sq. kms in the Northern Territory.
In the Kimberley, Aboriginal people are major stakeholders in the industry, holding 26 leases. Thirty-four leases are held by non-Aboriginal owner-occupiers, and 37 by absentee landlords or the State Government.
Has the value of pastoral leases been affected?
Banks have advised that the Wik decision will not affect the value of pastoral leases or cause difficulties for pastoralists in borrowing honey. This is because financial institutions loan money on the basis of the value of the stock and equipment (a 'stock mortgage') - not on the value of the land.1
The Australian Institute of Valuers and Land Economists has expressed concern at the 'over-reaction' to the Wik decision. The Institute's view is that 'lenders [and their valuers and advisers] should recognise that little has changed, and almost certainly the property rights of pastoral lessees are no less secure than previously'.2
Pastoral lessees undoubtedly face long-term problems - such as relatively low productivity, unreliable climates and land degradation due to overgrazing in fragile environment. These factors mean that many operations are marginal, but these are long standing problems which have nothing to do with the Wik decision.
NFF agenda
On 7 January (approximately two weeks after the Wik decision was handed down) David Russell, president of the Queensland National Party advocated, as a solution to 'uncertainty', the conversion of pastoral leases to freehold.
It appears that the NFF is using the Wik decision as a means of achieving the upgrade of leases - either by converting them to freehold or removing some of the current lease conditions to allow- multi-purpose use. It has provided them with a strategic opportunity to achieve a long-held aim. Behind their calls for certainty and validation is a campaign to achieve a windfall at the expense of the rest of us, particularly native title holders. One commentator has called it the 'second age of squatting'.
And, according to the Wik judgement, the more rights leaseholders have, the fewer rights remain for native title holders. Any upgrade of pastoral leases would amount to back-door extinguishment of native title.
1. At a conference in Canberra in June 1996, the Australian Bankers Association's legal adviser Ian Gilbert said he had been unable to identify any incidents of 'concern over native title as an issue in so far as a bank and i t s lending and security position is concerned', because 'invariably a bank-will look to the stock that is on the land rather than the land itself as its primary source of security'.
2. Press Release, February 1997, The Australian Institute of Valuers and land Economists
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