A farmer owns a $9 million property until the NSW government, in part at the urging of the Commonwealth, restricts land clearing, after which it is worth $2 million. Unfair? Not according to the Federal Court, which has just told land owner Peter Spencer to drop dead
Last week saw the latest, possibly the final, chapter in the progressive abolition of legal protection of rights for property owners against government takings. The Federal Court laid down its judgement in the appeal by landowner Peter Spencer. This is an issue previously covered here, here and here.
In a nutshell, Peter Spencer (above) was a NSW farmer who saw his land reduced in value from $9 million to $2 million by the regulatory actions of the NSW government, which progressively quarantined his property from productive usages. These measures were ostensibly taken to preserve native vegetation and other environmental attributes. Mr Spencer kicked up a fuss and the NSW government offered to buy him out for the $2 million it was worth following its regulatory actions but Mr Spencer rejected that offer, which the judge in the original case thought was generous!
Though the government’s actions were unquestionably “takings” of Mr Spencer’s property rights, his advice was that there was no chance of redress under state law. The Land Acquisition (Just Terms Compensation) Act 1991 No 22 is simply a bit of window dressing. The Act might talk about “an acquisition of land or of any interest in land” but compensation is only payable if the property is taken for economic purposes. These do not include noble, other-worldly purposes such as protecting some or other frog, preserving some supposed native place of interest, still less for saving the world from a global conflagration through the return of carbon dioxide to the atmosphere whence it came.
Mr Spencer’s strategy was to seek compensation from the Commonwealth, which has provisions against uncompensated takings of property in the Constitution under Article 51 (XXIII), saying property can’t be taken without offering “just terms” to its owners. He sought to do so on the grounds that the actions by the NSW Government were taken at the behest of the Commonwealth which sought to prevent land clearing in order to suppress the emissions of greenhouse gases. This allowed Australia to meet the terms of the 1997 Kyoto Protocol (which was only ratified with Kevin Rudd in 2007, but which the Coalition Government had signed and were seeking to meet).
Under the 1997 Kyoto Protocol, Australia agreed to limit its emissions to an eight per cent increase by 2012. Land-clearing restrictions reduced Australian emissions by 110 million tonnes of carbon dioxide equivalent (about a fifth of total emissions), without which Australian emissions in 2012 would have seen a 21% increase.
Of course, such a reduction was worthless in reality except in giving bragging rights to the Foreign Affairs Department and its minister. It allowed Australia to claim that we abide by our international commitments – something we heard again from Minister Frydenberg last night on Q&A in using the Paris Climate Change Treaty as justification for the latest attempts to reduce emissions by forcing uneconomic, high-cost renewable energy into the electricity system. That commitment to the Paris Climate Change Treaty was made by Prime Minister Turnbull, flanked by his ministers for foreign affairs and energy, the day after Donald Trump’s presidential victory rendered the Paris Agreement all but null and void.
With regard to the Kyoto Protocol, some other governments (notably Japan and Canada) failed to meet their own commitments and collected some international opprobrium as a result. The Canadian government had been urged to follow the Australian example of preventing land clearing to meet its obligations but determined that such measures would be unconscionable. The Canadian (conservative) government had a less cavalier approach to reducing the value of farmland than is evident in Australia — so much so they would take the unusual step of accepting international criticism rather than harm their constituents for no possible benefit.
Needless to say, the actions of Australian governments in sterilising productive land from use is at variance with an oft-stated goal of the countless government future strategy documents that proclaim how agriculture will be showing considerable expansion to meet the needs of the flourishing developing economies to our north. Such a lack of coordination regarding the various puff-pieces that governments issue comes as no surprise.
In seeking to use the Commonwealth Constitution as a route to “just terms” compensation, Mr Spencer presented evidence showing that Premiers Beattie and Carr had proudly proclaimed how their actions in preventing land clearances had enabled the meeting of the Kyoto commitments. He also maintained that Dr David Kemp, as the Commonwealth Environment Minister, withheld money from NSW until it became more aggressive in stopping the land clearing that was essential if the Kyoto commitments were to be met. Dr Kemp acknowledged he had communicated such matters to the NSW Government.
The original federal court decision, upheld by the appeals court, was that the takings by the NSW government were not related to the Commonwealth’s wishes and the judge noted how such (uncompensated) takings had been underway since at least 1972.
The case applies widely across Australia, with the Nationals’ Barnaby Joyce suggesting the expropriation of farmers for the purposes of carbon sequestration alone had cost them $200 billion. This figure (which was not contested in the Parliament) was arrived at by comparing land values where regulation prevented productive use, to values of land that was unaffected.
So there we have it. Although benefitting in accolades from the domestic and international community for meeting its Kyoto commitments, the Commonwealth was found not to have been sufficiently collusive with the property seizures of a state government for it to be held liable for compensation.
But the wider issue is the apparent untrammelled right of state governments to seize private property through regulatory measures without compensation. Individual property rights, the protection of which was a fundamental role of the government, was seen since John Locke and before to be crucial to modern civilisation. Nobody, until the onset of socialist parties would have envisaged that democratic constitutions would have allowed this. Now the highest courts of law justify it and we pay a penalty in terms of liberty and economic wellbeing. Alan Moran is the author of Climate Change: Policies and Treaties in the Trump Era