Putting a price on the foreshore

By Patrick Crewdson, Jonathan Milne

The Government is considering whether or not to put a dollar value on the foreshore and seabed.

The task is likely to test Treasury’s best minds, with almost 14,000km of publicly-owned coastline to account for and coastal property prices climbing by the day.

The Office of the Auditor-General recommended that Treasury decide how the foreshore and seabed should appear in financial statements.

Acting Prime Minister Michael Cullen acknowledged that the problem of valuing the land, of which the Government claimed legal ownership controversially last year, had proved "quite difficult".

But Maori Party co-leader Tariana Turia, who quit the Labour Party over the foreshore and seabed issue, said the accounting question proved the Government wanted ownership of the foreshore and seabed to extract resources.

One source close to the Government’s thinking said values would be needed to allow the Crown to tender out the use of parts of the seabed, for example, for oyster farming.

But Dr Cullen insisted there were two alternatives: either to assign a dollar value to the coastline and seabed, or to essentially assess it as priceless, and not place a value on it.

National Party deputy leader Gerry Brownlee said he strongly believed the Government should declare the foreshore and seabed priceless.

"If a dollar value were put on it, then I think that would completely convince not only Maori but everybody that the birthright of every New Zealander would be subject to someone coming up with the right price."

Treasury is seeking to resolve the issue in time to include an answer in the Crown Financial Statements at the end of June.

Giving the foreshore and seabed a financial value would increase the value of assets, revenue and net worth in fiscal forecasts but would not affect the Government’s cash flow.

One possibility is to assess the value of the foreshore and seabed by comparing it with valued adjacent properties, while a less orthodox approach could be to follow the lead of online auction site Trademe.co.nz, where the foreshore and seabed was put up for sale last October.

It reached more than $900 trillion before bidding closed.

- HERALD ON SUNDAY

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