If you counted up how much money NZ Lotto gives out to lottery winners and compared it to the amount those gamblers paid for their tickets, you'd conclude that Lotto were an unsustainable rort on the public. The government's practically giving away highly valuable assets, given the low low prices charged.
I attended Ann Brower's talk at this year's NZAE meetings on high country tenure review. The sessions are normally Chatham House rules, but I note that Chris Hutching reported on her paper in this week's NBR.
Ann and her coauthor show that high country estates that were sold to their lessees, and were then on-sold, increased a lot in value in the interim. Hutching cites Brower as reporting that 371,000 hectares were sold into freehold, with 73,685 hectares then on-sold. Some sections were on-sold for several hundred times' their initial valuation - and that that is especially true for sections overlooking lakes that became developments.
Now the problem here is twofold. First, you'll always run into trouble caused by selection bias in this kind of study. The sections where the leaseholder struck a fabulous bargain get on-sold with their values then included in the study; the sections where the Crown did far better are less likely to turnover in the short to medium term, so their lower prices don't get recorded.
But more importantly, in my view, is that the Crown was kinda selling lottery tickets. If you get freehold tenure over a section with lake views, you'll make a killing on it if you can get resource consent to develop it. But if somebody decides that those killer lake views make it an outstanding national landscape, well, you have a very beautiful section that maybe can't be used for anything.
And that's why I'm a bit worried about counting up the value of the winning lotto tickets.
It's perfectly plausible that the Crown messed up in its negotiations and charged below-market rates in some cases. It's also perfectly plausible that the Crown should be selling some of those leaseholds at below-market rates to reflect the sweat-equity contributed by the leaseholders over generations - though that's more debatable. But I doubt we can draw generalised conclusions about the process from the 20% of the land that was turned over shortly after tenure review. The other 80% might be relevant too.