In brief
The Queensland Government plans a major reform of the state land system, to streamline processes, reduce regulation and improve service delivery. Partner John Beckinsale reports on the possible reforms, which are outlined in a recently released discussion paper.
How does it affect you?
- Submissions on the Queensland Government's discussion paper, Queensland state land – Strengthening our economic future, can be made to the Department of Natural Resources and Mines until 5pm on 31 August 2014.
- Parties with interests in state land should monitor the progress of the reforms, because if the reform objectives are ultimately reflected in legislative changes, the following changes could be implemented, generally to the advantage of state land interest holders:
- Leasehold interests may become easier to convert to freehold land.
- Leaseholders may have more secure land tenure.
- Leaseholders may have more flexibility to authorise use of their land.
- The processes for dealings under the Land Act 1994 may be streamlined, with less opportunity for State Government intervention.
- Local governments may be able to apply the same types of conditions on a reconfiguration of state leasehold as they would on freehold land, such as infrastructure charges or a requirement for buffer zones.
- Parties who make significant commercial use of community purpose reserves, local government roads or stock routes should monitor the progress of the reforms, because if the reform objectives are ultimately reflected in legislative changes, the following changes could be implemented:
- Local governments may have increased responsibility for such reserves, roads and stock routes, and, in particular, may be permitted to charge third parties appropriate market rates for use of such reserves, roads or stock routes (particularly where commercial uses are involved).
- Local governments may be given greater autonomy to make decisions in respect of such reserves, roads and stock routes.
Background
In May, we reported on new legislation implementing a range of reforms providing greater security of tenure for certain rural leaseholders. In a continuation and expansion of this agenda, the Queensland Government has released a discussion paper, 'Queensland state land – Strengthening our economic future,' which the Government says will begin a major reform of Queensland's state land system, with the aim to modernise and consolidate legislation, streamline government processes, reduce red tape and regulation, and improve service delivery.
What are the key proposals?
Strengthening security of land tenure for business and residential leaseholders
The Queensland Government wants to encourage business and residential leaseholders of state land to convert to freehold land tenure, on the basis that this will result in fewer regulatory conditions, improved security of land tenure, and long-term financial benefits for the landholder.
The discussion paper notes that there has been minimal conversion to freehold in recent years, even though the process for such conversion is not considered a major impediment, and the long-term financial benefits of conversion are seen as material.
The Government is therefore seeking feedback from leaseholders as to whether there are impediments to conversion to freehold that the Government could assist in removing.
It is important to note that, before any conversion to freehold can occur, the leaseholder must have first dealt with any native title issues that may be relevant (including payment of any relevant costs or compensations) as a result of the application of the Commonwealth Native Title Act 1993. One of the reform objectives referred to in the discussion paper is the development of a better approach to native title negotiations, and the possibility of incentives that enhance how native title consents are obtained.
Where conversion to freehold is not considered possible, the discussion paper recognises that there are still ways to improve security of tenure for leaseholders, including:
- reducing the complexity of the current lease renewal process; and
- providing leaseholders with an option to extend their lease.
The Government has already made changes to the Land Act 1994 that go some way towards assisting with streamlining renewals. In particular, the concept of rolling term lease extensions now applies to leases used for agricultural, grazing or pastoral purposes where the leased land is 100 ha or more.
Although these changes are not referred to in the discussion paper, it is possible that future Government reforms may include adopting these types of processes for other types of leases.
Enabling leaseholders to authorise the use of land by third parties
The Government's view is that a leaseholder of state land is not entitled to grant a licence to a third party to use the leased area. The leaseholder can only grant a sublease in accordance with the express processes for subleasing set out in the Land Act 1994.
Despite this view, it is not uncommon for leaseholders to purport to grant licences over their leased areas, as licences are a convenient form of agreement allowing a third party to access a particular land area, where the exclusive use rights that flow from a sublease are not appropriate.
The State Government has itself recognised the use of licences as an important part of operating a business conducted from land held under a State lease, as such licences are expressly recognised as being valid in relation to certain strategic port land held under State leases.
The discussion paper asks whether leaseholders of State land should have more flexible arrangements to authorise the use of their land by third parties, including being expressly allowed to grant licences.
It would be desirable for this issue to be clarified by legislation to ensure that the legislation reflects current business practice.
Implementing a greater role for local governments
Local governments currently have responsibility for day-to-day maintenance and management of community purpose reserves and local government controlled roads, with Queensland Government oversight and restrictions. The discussion paper suggests that this is an unnecessary duplication, and raises the possibility of reducing the Queensland Government's role in relation to community purpose reserves and local government controlled roads.
Local governments can currently only charge cost-recovery fees to third parties for the use of community purpose reserves and local roads. The discussion paper raises the possibility of a change in law so that local governments could charge third parties 'reasonable market rates' for the use of a reserve or road (particularly where commercial uses are involved).
The discussion paper notes that the Government proposes amending existing legislation to ensure that where a freehold land subdivision results in land being set aside for community infrastructure, such land will remain as freehold land, held by the local government on trust, rather than the land becoming state owned land which is then held by the local government as a community purpose reserve.
Stock routes
A Bill to reform the management of stock routes was introduced into Parliament in 2011. It was intended to address shortcomings in the stock route network, such as cost shortfalls and unauthorised network use; however, this Bill lapsed in 2012. The discussion paper notes that the Government considers the Bill's policy objectives are still sound, but seeks comments on what other reforms should be included in new stock route legislation. The discussion paper suggests that any new legislation may provide greater autonomy for local governments, and may allow local governments to set 'appropriate market-based fees' for the use of stock routes.
Streamlining legislation
The discussion paper notes that the current legislative and administration arrangements for state land in Queensland are complex.
Currently, various government departments authorise the same types of activity on state land through different legislation, resulting in differing fees, terms and conditions, and processes. The Government proposes to remove duplication and provide more consistency where the same type of use or activity is allowed on state land.
There are currently multiple Acts used by different government departments to administer the acquisition of land for a range of public works and purposes. The Government plans to simplify and streamline the legislation, implementing a framework that recognises the specific requirements of a the relevant authorities which may seek to acquire land and which, where possible, amalgamates relevant provisions across different Acts. The Government also proposes to provide all relevant authorities with the ability to acquire all land tenure types, irrespective of whether the land is freehold or state land.
A state leaseholder can presently apply to have their land reconfigured under the Land Act 1994, with approval granted by the Queensland Government. This can result in a conflict with local government schemes. It is proposed that local governments should be able to apply the same types of conditions on a reconfiguration of state leasehold as they would on freehold land, such as imposing infrastructure charges or requiring buffer zones.
Other possible reforms
The discussion paper also seeks comments about other opportunities for reform that may simplify the current management and use of state land, and gives the following examples of possible simplifications:
- The amendment of section 322 of the Land Act 1994, to remove the inconsistency of requiring ministerial approval for the transfer of a sublease, even though such approval was not a requirement to the grant of the sublease itself.
- The introduction of a self-assessment process or certification process for transferring leases under the Land Act 1994.
Conclusion
There is no certainty that all, or any, of the reforms raised in the discussion paper will necessarily be implemented, as the reform process for these matters is only just starting. If the reforms are pursued, then there will obviously be significantly more detail involved, and further consequences to be considered, once the proposed legislative changes are released.
However, at this early stage, it appears that the discussion paper raises a number of sensible reforms that will hopefully be implemented in appropriate future legislative changes.