Summary

20.1     This chapter builds on the discussion in Chapter 18 about the nature of property rights. It is about the common law protection of real property rights and considers particular areas of concern about Commonwealth laws affecting the rights of landholders. The main focus is on interferences with the right to use land, although there is also a limited discussion of the right to exclude others from the land.

20.2     Property rights find some protection from statutory interference in s 51(xxxi) of the Australian Constitution, through the principle of legality at common law, and in international law. Section 51(xxxi) provides that any ‘acquisition’ of property must be on ‘just terms’. An ‘acquisition’ of property is the most extreme form of ‘interference’ with real property rights. ‘Interference’, as used in the Terms of Reference, has a broader meaning than ‘acquisition’ as the term has been interpreted by the High Court with respect to s 51(xxxi).

20.3     Laws interfering with real property rights include the Lands Acquisition Act 1989 (Cth), environmental laws, native title laws and criminal laws. Of these laws, environmental laws raised the most controversy and debate among stakeholders. Concerns were expressed that environmental laws may reduce the commercial uses to which property can be applied.

20.4     State and territory governments are primarily responsible for the management of native vegetation and biodiversity, and states have legislative power in relation to internal waters. Most of these jurisdictions do not have an equivalent provision to s 51(xxxi) of the Australian Constitution, which has given rise to complaint. State environmental laws are not the concern of this Inquiry; however, from the landholders’ perspective the complexity of the ‘interference’ with property rights can only be understood in the light of both state and Commonwealth laws.

20.5     Concerns have been expressed about potential Commonwealth involvement in state ‘interferences’ with property rights because the Commonwealth may financially assist states with respect to natural resources management.^[1] Further, the Commonwealth has significant policy responsibility for water management in the Murray-Darling Basin.^[2] This Inquiry heard complaint about both the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) and the Water Act 2007 (Cth).

20.6     Justifications for interference with property rights from an environmental perspective include that environmental laws are necessary to implement international agreements, are in the public interest and that safeguards exist. Notably both the EPBC Act and the Water Act contain express provisions precluding the Commonwealth from acquiring property without providing compensation on just terms.^[3] In the European context, a proportionality test has been used to determine whether interferences with real property rights caused by environmental laws are justified.

20.7     The EPBC Act interferes with the right to use land—but only to a limited extent. Whether the Act interferes with a farmer’s ability to clear land is contested. The Act is constrained in its application. It does not interfere with the existing use of the land. Rather, it requires approval to change the existing use of the land where the proposed action has, or is likely to have, a ‘significant’ impact on a matter of national environmental significance. In most cases development proposals are approved, subject to conditions. Very few proposals have been refused. An independent review of the EPBC Act was completed in late 2009 and the next scheduled review is to be completed by 2019. The next scheduled review could reassess whether the interferences are proportionate and explore a range of compensatory mechanisms.

20.8     With respect to water, the common law recognised riparian rights: the proprietor of land abutting on water was entitled to certain rights in relation to that water as well as extensive rights in relation to groundwater. However, state and territory legislation has long provided that the primary right of access to water is vested in the Crown. The Water Act does not interfere in a negative way with the water entitlements in the Murray-Darling Basin that have been established under state and territory statutes. These water entitlements, that have been unbundled from land, may constitute a form of personal property. The Commonwealth has pursued consensual arrangements with the holders of water entitlements in order to deliver the desired policy outcomes with respect to water in the Murray-Darling Basin. Arguably the security and value of the water entitlements arising from state and territory law has been enhanced by the Water Act and non-legislative mechanisms such as water buy-backs. An independent review of the Water Act was completed in late 2014. It may be appropriate for the Water Act to be reviewed periodically as is the case with the EPBC Act.^[4]