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Issue #1647      July 16, 2014

Would you lease your town?

GUNBALANYA: The Northern Land Council (NLC) has serious concerns about plans by the federal government to negotiate a 99-year township lease at Gunbalanya. Federal Indigenous Affairs Minister Nigel Scullion has said a lease to the Commonwealth, through the Office of Township Leasing, would open up economic opportunity and home ownership for Aboriginal people.

Schoolchildren from Gunbalanya wait for a school assembly. (Photo: Sam Mooy)

The lease would be negotiated under section 19A of the Aboriginal Land Rights Act, an amendment enacted by the Howard government in 2006. But the NLC’s Chief Executive Officer, Joe Morrison, is concerned by suggestions that a s19A lease is the only way to achieve positive development and rental outcomes which accord recognition of traditional ownership.

“It is self evident that this is not the case,” says Morrison.

“The same positive outcomes are also occurring under s19 leases which have always been available under the Land Rights Act.”

The difference between s19 and s19A leases is fundamental.

Section 19 leases are approved by the NLC’s full council (or, by the Minister if they are of high value or long duration) with the prior, informed consent of traditional owners. Multitudes of s19 leases have been executed over housing developments, private businesses and government facilities in the NLC’s region.

Importantly, the leases are held by the Aboriginal Land Trust, and traditional owners retain control over their lands. Section 19A township leases are held by a Commonwealth public servant, the Executive Director of Township Leasing. Decisions on subleases and development will be made by the Executive Director, not the traditional owners.

“This is the case notwithstanding that the Executive Director will consult with the traditional owners,” Morrison said.

“Regrettably, the way the Commonwealth has presented its proposal has tended to pass over this by incorrectly portraying the Executive Director as the traditional owners’ friend or agent and the equivalent of a Land Council.

And what happens should disputes arise? Morrison points out that the Executive Director is appointed by the Minister; “And where disputes arise he will perform his functions from that perspective,” he said.

An immediate attraction of a township lease at Gunbalanya is that backdated rent will be paid for the 40-year s19 SIHIP lease for community housing, which was granted in 2009 for a peppercorn rent.

At the NLC’s insistence, all SIHIP leases in its region provide for backdated rent if a s19A lease is negotiated.

But that deal might not necessarily be realised. Although the Commonwealth has indicated it would pay backdated rent, the Territory has given no such commitment. Nor has the Commonwealth committed to picking up the tab if the Territory doesn’t.

The NLC’s position is that written commitments about backdated rent must be obtained before the Commonwealth’s lease proposal could progress.

The NLC has also questioned financial costs which would arise from a township lease arrangement with the Commonwealth.

Whereas a land council can’t recover its administrative costs from lease monies, the Executive Director of Township Leasing who would hold a section 19A lease over Gunbalanya would recoup his operating expenses from sublease rentals, after the first five years.

Morrison says the Executive Director’s expenses are likely to be significant.

They would include costs of administrating and complying with the lease, all legal obligations, the costs of preparing land for subleases (including negotiations, drafting, etc) and the cost of managing subleases.

One significant cost would be insuring the Executive Director for loss, destruction or damage ($20 million minimum), public liability ($100 minimum) and workers compensation.

“This is an extraordinary and unjustifiable expense to impose on traditional owners,” Morrison said. The NLC has said it would not be prepared to execute a township lease for Gunbalanya if traditional owners had to foot the Executive Director’s operating expenses.

The complexity of a township lease arrangement and the legal requirement for traditional owners to understand the significant and long-term diminution of their rights are a worry to the NLC.

“Some traditional owners may not properly appreciate that the legal effect of a township lease is that they give up their power to decide what happens on their land for 99 years to 2113 and a foreshadowed renewal for another 99 years to 2212 – a period spanning many generations,” Morrison said.

Land Rights News

Next article – Normalisation: What does it mean?

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