This discussion was previously posted on the PRA site and deals with compensation, that should be paid to landholders, for loss of production due to Government imposed restrictions such as the Vegetation Management Act. 

Compensation should include the loss of market value of the land as well as annualised value of the loss of production $’s from that land over a reasonable term say 10 years as well as the devaluation of any capital infrastructure that was previously required to support the production from that land. ie: water improvements, fencing, stock yards, employee quarters.

Eg: yards may have been constructed to handle 500 head but now only required to handle 300 head; fencing and waters were constructed to serve the land and are no longer required; the property may not longer need to employ as many workers.

Apparently , All of the above and more, has already been decided by the High Court in an 1989  decision called “Hungerfords v Walker [1989] HCA 8; (1989) 171 CLR 125 (9 February 1989)” where the opening sentence by MASON C.J. AND WILSON J. reads as follows – “This appeal raises the important question whether, at common law, a court, when awarding damages for breach of contract or negligence, can include in its award damages, assessed by reference to appropriate interest rates, for the loss of the use of money which the plaintif paid away and lost as a direct consequence of the defendant's breach of contract or negligence.  The answer was in the affirmative and following this decision the phrase “Relief is sort at Hungerford & Walker”. (Read decision - HERE)”

I realise that what we are discussing here has already transpired and is a result of restrictive legislation enacted some 13 years ago. What would now be suitable compensation for partial restriction could be an ongoing matter.

I would rather see the community/government purchase the whole of the land that it affects, either partially or wholly, with vegetation restrictions. Of course that has not happened.

With that in mind, compensation for all things past should be calculated as we have discussed previously, ie full market price of the land taken out of production and compensation for the reduction in value of the balance not purchased plus any moneys paid prior for capital infrastructure that is no longer required and loss of production. Any thing less is theft.
 

Humans are part of the environment, not competitors. We also know that so is wheat, barley, sorghum etc plus livestock such as sheep and cattle. (All God's creatures)

Food production is not a dirty business, it is essential and compromises have to be made in terms of the environment to produce it, just as they are when concrete is poured in our cities. A factory, is a factory, is a factory and does not cater at all to the environment.

Landholders can do their very best for environmental bio diversity and in preventing land degradation and soil loss but they should not be obliged to go further than that. If the community wants to lock up land, they should purchase it - full stop.

So, what is “just terms” compensation for all things past?

Simply calculate a sale price at the date the restrictive act came into effect and work forwards from there. The application of commercial interest rates since that date on the sale price, and added to the sale price, should come up with appropriate compensation.

Any other methods of calculation for loss of income and reference to drought impact etc would make the formulae too hard for the government to calculate and most landholders would be spending a lot of time appealing etc.

Another factor to consider is that over the past 10 years there has also been an "opportunity cost" for capital gains that have not accrued due to the restrictions. (Land subject to Vegetation Management Act restrictions may have even devalued and some may have not realised their potential gain in value, whereas fully developed land, not affected by restrictions may have achieved even greater capital gains since the restrictions were imposed.)

Conclusion

It would appear that fair and just terms compensation as discussed above may be hard to realise given that fact that most state governments are insolvent (or should be) and that the Federal Government has already run up such a large deficit that has to be paid back. The governments will also rely on the fact that there have been some previous negotiations, whether inclusive or non inclusive of landholders, that may have included some state farm and national farmer organisations where figures have been suggested and possibly acknowledged that will give precedent o setting compensation at a level that is in reality much less than fair and just.

In this circumstance it would seem that the best resolution is to repeal the vegetation management laws and return the previous production rights to the landholders.

Compensation can then be assessed only on the losses suffered due to the laws since the date they were enacted to date of repeal only.

This would certainly be a much lesser sum, and impost on Governments, than having to pay for community benefit on productive land into the future.