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Watching Brief – October 2015

Home Insights Watching Brief – October 2015

Matter of opinion

Lochinver Station decision: there are broader issues with the overseas investment regime

The recent decision by the Government to decline the Lochinver Station purchase demonstrates that, three years on from the Crafar farms controversy, overseas investment decisions remain highly political. The Lochinver decision was always going to register on the political radar given it involved a large farm and the same applicant that bought Crafar farms (a subsidiary of Shanghai Pengxin Group Co Ltd). Adding to this was Labour’s position prior to the last election that it would block the sale if it were in power. It is in this context that the relevant Ministers (Upton and Bennett) overturned the Overseas Investment Office (OIO) recommendation to approve the sale.

Under the regulatory framework, overseas investment decisions ultimately come down to judgment, allowing considerable room for the Government to take the least politically risky path. The High Court in the Crafar farms case overturned the Government’s decision because, in the Court’s view, the wrong counterfactual test was applied. Following Crafar farms, it is necessary to contrast the position “with and without” the proposed investment rather than “before and after”. This means an applicant must show benefits that are over and above those an alternative New Zealand purchaser would bring.   

However, provided some additional benefit is demonstrated, a high degree of discretion can still be exercised by Ministers when making a decision. This is because the economic benefit decision largely rests on 21 factors that can be considered of high, low or no relevance, and then given different weighting. Taking account of these 21 factors, the Ministers must finally decide whether the investment, overall, will bring economic benefits that are “substantive and identifiable”; words that escape precise definition. Indeed, in the Crafar farms case, once the correct counterfactual test was applied, the sale to the applicant was approved.

For Lochinver, the OIO recommendation to the Minister was to approve the investment, noting that the various factors were “finely balanced”. Given this, the decision to ultimately reject the sale was well within the regulatory framework described above. As the Ministers noted in their reasons for the decision, the key difference between their view and that of the OIO came down to the different weight the Ministers gave to the various factors. In the end, they were not satisfied that “the overall benefits to New Zealand will be or are likely to be substantial”. Given the political environment, and the fact the issue was finally balanced, the decision to take a cautionary approach comes as no surprise.

Perhaps what is more notable and concerning about the Lochinver decision is that it took 14 months from the time of the application to the time a final decision was made. In addition, as the vendor argued, it is less than clear why this application failed where other applications, with arguably similar or lesser benefits, were approved. Both these issues – delay and consistency – have the potential to negatively impact on New Zealand's international reputation and ability to attract the overseas investment needed to support and grow our economy. 

The LINZ is currently consulting on increasing fees with a view to improving time frames for processing applications. However, this may have limited effect without broader consideration of how to improve the efficiency of the current administrative system (perhaps short form processes for low risk investments or repeat investors?) and better clarity and guidance on the weighing of factors (reducing uncertainty for potential applicants). The overseas investment regime may be viewed as a political hot potato, but the Government should not shy away from ensuring the regime protects New Zealand’s sensitive assets without unnecessarily risking the investment that New Zealand needs.

In the news

TPP – what happens next

The Trans Pacific Partnership Agreement (TPP) was signed off today after eight years of negotiation. Now all 12 state parties must go through their respective processes in order to ratify the TPP. While some countries require a majority vote from elected representatives, in New Zealand only Cabinet approval is required. However, the Cabinet Manual outlines a process that must be followed for multilateral treaties or major bilateral treaties of significance, which includes public consultation. The required steps are:

  • The treaty is submitted to Cabinet for approval;
  • Following Cabinet approval, the treaty must be presented to the House of Representatives accompanied by a national interest analysis (which must also be approved by Cabinet);
  • This national analysis must address:
    • the reasons for New Zealand taking the binding treaty action;
    • the implications for New Zealand of taking the binding treaty action; and
    • the means of implementing the treaty action domestically.
  • Once presented to the House, the treaty is referred to a Select Committee (the Foreign Affairs, Defence and Trade Committee); and
  • The Select Committee may seek public submissions (for the TPP this is likely). Additionally the House may wish to give further consideration, for example, by way of debate.

The Government must refrain from taking any action until the Select Committee has reported, or 15 sitting days have lapsed, whichever is the sooner (although the Select Committee can ask for more time). For example, changes in legislation to give effect to the treaty should not be introduced into the House until after the time for the Select Committee to report has expired. However, departments can initiate the legislative process before that time, including issuing a drafting instruction to the Parliamentary Counsel Office.

Although the Government must respond to any Select Committee recommendations within 90 days of the Select Committee report, it is not bound by those recommendations, and there is no requirement to defer taking binding treaty action prior to that formal response.

The Select Committee process, and national interest analysis, will enable New Zealanders to now have sight of, and comment on, the content of the TPP. Given the ratification process will take some time across the various countries there is no immediate urgency and it is expected sufficient time will be allowed for full submissions to be made and for consideration and debate in the House. 

Will this process make any difference? 

The answer is not substantively. There is no ability now to change the contents or terms of the TPP. The Cabinet decision is to either approve or reject the TPP. As the decision is made by Cabinet only, it is clear the TPP will be ratified. However, the process provides the Government with an important opportunity to ensure New Zealanders are informed and behind its decision, where failure to do so may play out at the next election.

A summary of the TPP is available here.


Auditor-General rejects swamp kauri inquiry

Auditor-General Lyn Provost has refused to launch an inquiry into the swamp kauri industry, despite agreeing with claims by conservation groups that systems intended to prevent illegal timber extraction were open to abuse.

It is illegal under the Forests Act 1989 to export unprocessed timber. However, the Northland Environmental Protection Society along with the Far North branch of Forest and Bird laid a complaint with the Auditor-General that the Ministry for Primary Industries (MPI) and Customs were turning a blind eye to that prohibition. The complainants alleged that unprocessed kauri logs, planks and slabs were being exported, and that timber was being disguised as carvings or table tops to get around the export rules.

Ms Provost found that it was clear that some exporters had been “testing” the level of modification required before swamp kauri could be exported. However, she concluded that interpretation of legislation, and specifically, in this case, what constitutes a “finished product”, is a matter for the courts. Regardless, no findings were made that timber was being exported illegally.

She agreed, however, that the system used until recently for verifying the source of swamp kauri had been ineffective. Statements intended to prove logs had been extracted legally were issued on a “high-trust system” with minimal inspections. 

The Auditor-General also found that there is uncertainty in regards to who is responsible for oversight of the rules. MPI believed protecting the environment was the regional council's job, but because extraction of swamp kauri from non-indigenous sites was a permitted activity under the Regional Plan, no regional council approval was needed. The result was that extraction was conducted with little central or local government oversight.

New rules brought in by MPI in July were expected to reduce that risk. Under the new rules, the relevant council has to be informed any time an operator wants to extract swamp kauri, and MPI would attempt to visit every site as part of its approval process.

The Auditor-General's response to the request for inquiry can be found here.


Commerce Commission releases Consumer Issues Report 2015

The New Zealand Commerce Commission (Commission) has released a report titled “Consumer Issues Report 2015” (Consumer Report), which identifies what the Commission considers to be current issues and emerging risks that have the potential to affect New Zealand markets or consumers. The Consumer Report is only the second of its kind (the first report was produced in 2014), and is a collation of information from a wide range of sources, including the Commission’s own data and information from government and community agencies.  

The Consumer Report identifies 93 current issues and emerging risks to consumers and markets. Those identified as having the greatest potential impact to consumers included: lenders charging unreasonable fees; the mobile trader business model; participation in industry associations enabling anticompetitive conduct; and misrepresentation of country of origin labelling.

Key trends arising from the Consumer Report include:

  • online trading generates 33 per cent of Fair Trading complaints, twice the level generated by purchases made in physical stores;
  • 25 per cent of Fair Trading complaints were related to just 24 traders;
  • motor vehicle credit contracts generate 30 per cent of credit complaints;
  • finance companies are the most complained about lenders, followed by mobile traders; and
  • industry associations featured frequently in cartel cases.

The Consumer Report will inform the Commission's business plan for the coming year. Identifying areas of high risk to consumers allows the Commission to prioritise and target its resources in the hopes of making a maximum impact.

Commission Chairman, Dr Mark Berry, commented that the Commission hopes to add additional agencies as contributors to the 2016 Consumer Report.

The full Consumer Report can be accessed here.


Commerce Commission releases draft decision on first fast track amendments for customised price path

The Commission has published draft amendments that are intended to provide more flexibility for gas and electricity distributors when applying for a customised price-quality path (CPP). The draft decision is part of the fast track process for CPPs, which forms part of the Commission's wider input methodologies review. 

Electricity distributors and gas pipeline businesses are subject to price-quality regulation. The revenues these suppliers can earn, or the maximum average prices they can charge, is limited by default price-quality paths. However, after the default path is set, they can apply to the Commission for a CPP that is specific to their circumstances.

The draft changes announced are intended to streamline the application process for a CPP and make it more cost-effective. Under the draft decision suppliers can apply to be exempt from some information requirements, or can have the existing requirements tailored to better suit their circumstances. For example, the proposed requirements which may be available to modification or exemption in preparation of a CPP proposal include: consumer consultation; verification; audit; and directors’ certification.

The draft decision also provides the opportunity for suppliers to apply to use alternative methodologies in some cases where it would have an equivalent effect to what is specified in the input methodologies. It is proposed that alternative methodologies can relate to:

  • cost allocation and asset valuation;
  • treatment of taxation; or
  • estimate of the term credit spread differential allowance.

The Commission considers that introducing a process to provide for alternative methodologies would provide a more flexible approach to determining a CPP.

These proposed changes relate to the CPP matters in Limb 1 of the Commission's fast track review. Limb 1 looks at the changes required affecting the preparation, assessment and determination of CPP applications. Limb 2 will consider changes necessary in regards to the alignment of the weighted average cost of capital for CPPs with the prevailing weighted average cost of capital for default price-quality paths.

The Commission's final decision on Limb 1 is due by 9 November 2015. A copy of the Commission's draft decision can be accessed here.


Productivity Commission releases final report on social services

The New Zealand Productivity Commission released its final report “More effective social services” on 15 September 2015 (Report). The Report was commissioned by the Government in June 2014 to examine ways of improving outcomes for New Zealanders as a result of services resourced by the New Zealand state sector. The Productivity Commission’s investigation into social services focused on the institutional arrangements and contracting mechanisms that can improve outcomes, rather than commenting on specific policies.

The Report presents the Productivity Commission's findings from its 14 month investigation and makes a total of 61 recommendations for consideration. Key findings of the Report include:

  • The social services system is doing a good job for many people, most of the time, but there is room for improvement at the systemic level. For example, the system frequently treats people who require social services as passive recipients of services rather than active participants in improving their own lives;
  • The system performs differently for different types of clients: The Productivity Commission separated client characteristics into four broad groups, distinguished on the basis of the complexity of a client's needs (ie do they need a single service delivered by a specialist agency or a package of services from many sources?). The purpose of this was to demonstrate that different groups require different responses from the system; and
  • Clients with complex needs, who cannot navigate the system to coordinate services, experience consistently poor results across health, education, welfare dependency and crime, which in turn can create a cycle of disadvantage that persists across generations.

A key theme arising from the Report's recommendations is the need for control over decisions to move from central decision-makers to clients. The social services system works well when people with the right information, incentive, capability and authority make decisions about service delivery. Other key recommendations of the Report include: 

  • improving commissioning and contracting: a wider range of service delivery models should be considered for commissions. The Government should appoint a lead agency to promote better commissioning of social services, and commissioning organisations should take on more responsibility for guiding service implementation and providing stewardship (however, the Government should retain overall responsibility for system stewardship); and
  • building a system that learns, innovates and makes smart investments: the system must have clear goals, strong incentives and the flexibility to test new ideas.

A formal Government response to the Report will likely not be until next year, however, early comments from the Minister of Finance and the Minister of State Services indicate general support of the Report's analysis of the weaknesses of the current system and the need for improvement. The Report recommends that Government establish a small Ministerial Committee for Social Services Reform to lead the Government’s reform of the social services system.

A copy of the full Report can be found here.


Reserve Bank updates registered bank disclosure requirements

The Reserve Bank of New Zealand (Reserve Bank) has updated the bank disclosure Orders in Council to remove the public disclosure requirement for solo bank financial statements (local OIC and branch OIC). From 30 September 2015, banks are no longer required to include, in their full year disclosure statements, separate financial statements for the stand-alone bank in addition to group financial statements.

The amendments follow a consultation by the Reserve Bank in February 2015, which found that the removal of solo annual financial statements was the preferred option by industry participants.

The amendments also make minor changes to the Reserve Bank’s handbook document B7. The revised handbook and updated Orders in Council can be found here.


Rules Reduction Taskforce reports on loopy rules

Minister for Local Government, Hon Paula Bennett, has welcomed the release of the “Loopy Rules Report” by the Rules Reduction Taskforce (Taskforce). 

The Taskforce, co-chaired by Jacqui Dean and Michael Barrett, was established in October 2014 to inquire into ineffective or unduly cumbersome property regulations and local rules submitted to the Taskforce by members of the public. The Taskforce held 50 public meetings around New Zealand and received almost 2000 submissions. 

The Loopy Rules Report identifies a number of individual “quick fix” opportunities for central and local government to correct misinterpretations or unintended consequences of local government rules, as well as identifying larger “top ten fixes” determined by the Taskforce to be necessary to improve efficiency and reduce red tape including:

  • Establishing an end-to-end relationship management approach for consent applications between councils for the purpose of making it easier to obtain resource consents. The approach would require councils to publically report on their performance in meeting statutory timelines, and introduce a quicker and more flexible process for changing plans as part of the Resource Management Act 1991 reform process;
  • Requiring departments to adopt a stakeholder engagement approach to developing local government policies and regulations by signalling policy changes in advance, similar to the approach adopted by the Ministry of Transport. The approach would also require Cabinet paper guidelines to be amended to require consultation with the Minister of Local Government on appropriate issues; and
  • Implementing progressive consents into the Building Act framework to enable building work to begin sooner. This could occur by promoting the use of the building consent exemptions under Schedule 1 of the Building Act 2004, and speeding up the development of risk based consenting

    The Government’s response to the Loopy Rules Report is expected to be rolled out over the coming months, and will be posted on the Taskforce’s website here.

    A copy of the full Loopy Rules Report can be found here.

Progress of legislation

New Bills

Building (Pools) Amendment Bill
Type of Bill: Government
Member in Charge: Hon Dr Nick Smith
This Bill seeks to repeal the Fencing of Swimming Pools Act 1987, and amend the Building Act 2004, to reduce duplication and compliance costs, and ease the regulatory burden on both pool owners and territorial authorities. The Bill would deem the use of child resistant covers on spa pools as sufficient safety protection, replace the current offence provisions in the principal Act with graduated enforcement regime that includes prosecutable offences, clarify that home swimming pools are to be inspected five-yearly by councils, and require pool and spa retailers and manufacturers to inform purchasers about the obligations associated with home pool operation under the Building Act and Building Code. The amendments intend to reduce compliance costs by $17 million whilst maintaining child safety around residential pools. 

Climate Change (Divestment from Fossil Fuels) Bill
Type of Bill: Members
Member in Charge: Dr Russell Norman
This Bill would introduce a prohibition on money held in public funds being investing in the mining or production of fossil fuels. The Bill would also require that managers of public funds dispose of any investments that the fund currently has in the mining or production of fossil fuels. Clause 5 of the Bill defines a "public fund" as: monies held in a Crown or Departmental Bank Account; received by ACC; the New Zealand Superannuation Fund; the Government Superannuation Fund; funds of the Lotteries Commission; or funds of the Public Trust.

Environment Canterbury (Transitional Governance Arrangements) Bill
Type of Bill: Government
Member in Charge: Hon Dr Nick Smith
This Bill intends to establish a mixed-model governance structure for the Canterbury Regional Council (Environment Canterbury) in a transition period during the 2016-2019 local government term. The Bill provides that the transitional governing body of Environment Canterbury would comprise of seven elected members, as described in section 5 of the Local Electoral Act 2001, and that no fewer than three, but no more than six, members be appointed by the responsible Minister. Further, the Bill would require the Minister to appoint members who complement the knowledge and expertise of the elected members so that, collectively, the transitional body has appropriate expertise in freshwater management, local authority governance, tikanga Māori, and the Canterbury region. In doing so, the Bill is said to facilitate a return to a standard, fully elected, regional council to represent the Canterbury region from the local government elections in 2019.

Home and Community Support (Payment for Travel Between Clients) Settlement Bill
Type of Bill: Government
Member in Charge: Hon Dr Jonathan Coleman
This Bill seeks to implement a settlement agreement reached between the Crown, District Health Boards, providers of Home and Community-Based Care Services (HCS) and certain unions. The agreement stems from a claim by HCS employees to the Employment Relations Authority that travel between clients receiving HCS is "work" for the purposes of the Minimum Wage Act 1983. Clause 12 of the Bill would require HCS employers to pay HCS employees for the time spent travelling between clients from 1 July 2015 using a predetermined sum. Further, clauses 14 and 15 of the Bill would provide a number of methodologies for determining the quantum of this remuneration following the end of a transition period of graduated implementation set to end on 1 March 2016. 

International Finance Agreements Amendments Bill
Type of Bill: Government
Member in Charge: Hon Bill English
This Bill looks to make a number of definitional amendments to the International Finance Act 1961 to enable New Zealand to become a member of the Asian Infrastructure Investment Bank (AIIB) and implement the resulting obligations arising under the AIIB Articles of Agreement. The AIIB is a newly created multilateral investment bank designed to address reputed deficiencies in infrastructure investment across Asia. The proposed amendments to the principal Act intend to allow New Zealand to contribute to strong and sustained regional growth, consolidate its economic and political relationships in Asia, and participate in an institution that aims to advance regional economic co-operation and integration.

New Zealand Flag Referendums Amendments Bill
Type of Bill: Government
Member in Charge: Hon Bill English
This Bill was introduced under urgency, and has since passed into law. The Act is discussed in the Acts Assented section below.

Social Security (Pathway to Work) Amendment Bill
Type of Bill: Members
Member in Charge: Carmel Sepuloni
This Bill seeks to amend the Social Security Act 1964 by replacing the definition of "Income Test" in section 3 of the principal Act to increase the amount those on certain benefits can earn before benefits are reduced by abatement rates. This Bill would raise the threshold of how much persons can earn before abatement rate thresholds are triggered. Specifically: raising the Jobseeker Support benefit from $80 per week to $150 per week; and raising the threshold for those on the Sole Parent and Support Living payments from $100 per week to $150 per week. The amendments in this Bill look to correct the existing threshold rates which disincentivise engagement in part time-work.

Te Atiawa Claims Settlement Bill
Type of Bill: Government
Member in Charge: Hon Chris Finlayson
This Bill would give effect to the deed of settlement between Te Atiawa and the Crown signed on 9 August 2014, and provide for the final settlement of historical Treaty of Waitangi claims of Te Atiawa. The Bill would provide an apology to the Taranaki based iwi, and a range of commercial and cultural redress including provisions for Te Atiawa to contribute three iwi members for appointment on both the policy and planning, and regulatory committees of the Taranaki Regional Council.

Telecommunications Interception Capability and Security) Amendment Bill
Type of Bill: Members
Member in Charge: Clare Curran
This Bill seeks to amend the Telecommunications (Interception Capability and Security) Act 2013 by inserting a new section 35A into the principal Act. This section would require the responsible Minister to establish a Technical Advisory Board to provide analysis and recommendations on any matter referred to the Minister requiring an exercise of discretion or prescribing an additional area of specified security interest. This Bill is said to correct an omission in the principal Act which resulted in a lack of oversight and checks and balances in the exercise of powers granted to Ministers.

Wellington Town Belt Bill
Type of Bill: Local
Member in Charge: Grant Robertson
This Bill intends to consolidate into a single statute the Wellington Town Belt Trust Deed and parts of relevant statutes and planning instruments which apply to the Town Belt. In particular, clauses 12 and 13 of the Bill would record the powers and restrictions incumbent upon on the Wellington City Council (Council) when dealing with the Town Belt. In doing so, the Bill is said to provide a transparent statutory basis for Council trusteeship and management of the Town Belt, and to enable the addition of lands to the Town Belt previously lost by the Council since 1840 but since regained.


Bills awaiting first reading

Affordable Healthcare Bill
Agricultural Compounds and Veterinary Medicines Amendment Bill
Climate Change (Divestment from Fossil Fuels) Bill
Education (Charter Schools Curriculum) Amendment Bill
Electricity Industry (Small-Scale Renewable Distributed Generation) Amendment Bill
Environment Canterbury (Transitional Governance Arrangements) Bill
Home and Community Support (Payment for Travel Between Clients) Settlement Bill
Keep Kiwibank Bill
Land Transport (Safer Alcohol Limits for Driving) Amendment Bill
Legislation Amendment Bill
New Zealand Superannuation and Retirement Income (Pro Rata Entitlement) Amendment Bill
Ngā Rohe Moana o Ngā Hapū o Ngāti Porou Bill
Official Information (Parliamentary Under-Secretaries) Amendment Bill
Remuneration Authority Amendment Bill
Social Security (Pathway to Work) Amendment Bill
Social Workers Registration (Mandatory Registration) Amendment Bill
SuperGold Health Check Bill
Taxation (Transformation: First Phase Simplification and Other Measures) Bill
Te Atiawa Claims Settlement Bill
Telecommunications (Interception Capability and Security) Amendment Bill


Bills defeated

New Zealand Superannuation and Retirement Income (Pro Rata Entitlement) Amendment Bill
Member in Charge: Denis O'Rourke
60 in favour: Labour 32; Green Party 14; New Zealand First 12; Māori Party 2.
61 against: National 59; ACT New Zealand 1; United Future 1.


Bills before Select Committee

Submissions open

Bill

Select Committee

Closing date for Submissions

Building (Pools) Amendment Bill

Local Government and Environment

5 November

Child Protection (Child Sex Offender Register) Bill

Social Services

28 October

Employment Standards Legislation Bill

Transport and Industrial Relations

6 October

Financial Assistance for Live Organ Donors Bill

Health

7 October

Health Practitioners (Replacement of Statutory References to Medical Practitioners) Bill

Health

7 October

Māori Purposes Bill

 Māori Affairs

29 October

Parental Leave and Employment Protection (Six Months’ Paid Leave and Work Contact Hours) Amendment Bill

Government Administration

6 November

Subordinate Legislation Confirmation Bill

Regulations Review

Not called

Wellington Town Belt Bill

Local Government and Environment

29 October


Submissions closed

Bill

Select Committee

Report Due (2016)

Christian Churches New Zealand Property Trust Board Empowering Bill

Government Administration

12 February

Electronic Monitoring of Offenders Legislation Bill

Law and Order

4 December (2015)

Environmental Protection Authority (Protection of Environment) Amendment Bill

Local Government and Environment

22 January

Evidence Amendment Bill

Justice and Electoral

2 January

Hineuru Claims Settlement Bill

Māori Affairs

11 February

International Finance Agreements Amendments Bill

Foreign Affairs, Defence and Trade

22 October

Local Government (Auckland Council) Amendment Bill (No 3)

Local Government and Environment

24 December (2015)

Māori Language (Te Reo Māori) Bill

Māori Affairs

24 December (2015)

Minimum Wage (Contractor Remuneration) Amendment Bill

Transport and Industrial Relations

12 February

Ngāruahine Claims Settlement Bill

Māori Affairs

11 February

Public Collections and Solicitations (Disclosure of Payment) Bill

Social Services

12 February

Social Housing Reform (Transaction Mandate) Bill

Social Services

18 February

Social Security (Extension of Young Persons Services and Remedial Matters) Amendment Bill

Social Services

23 January

Support for Children in Hardship Bill

Social Services

3 November (2015)

Taxation (Bright-line Test for Residential Land) Bill

Finance and Expenditure

22 October (2015)

Bills awaiting second reading

Bills that have recently been reported back to the House from a Select Committee are in bold and the Select Committee reports on these Bills are linked.

Building (Earthquake-prone Buildings) Amendment Bill (as reported by the Local Government and Environment Committee)
Coroners Amendment Bill
Defence Amendment Bill
Drug and Alcohol Testing of Community-based Offenders and Bailees Legislation Bill (as reported by the Law and Order Committee)
Housing Corporation Amendment Bill
Land Transport (Admissibility of Evidential Breath Tests) Amendment Bill
New Zealand Business Number Bill (as reported by the Commerce Committee)
Policing (Cost Recovery) Amendment Bill
Public Health Bill
Radiation Safety Bill
Register of Pecuniary Interests of Judges Bill
Regulatory Standards Bill
Smoke-free Environments (Tobacco Plain Packaging) Amendment Bill
Spending Cap (People's Veto) Bill
Taxation (Annual Rates for 2015-16, Research and Development, and Remedial Matters) Bill (as reported by the Finance and Expenditure Committee)
Taxation (Income-sharing Tax Credit) Bill


Bills awaiting third reading

Commerce (Cartels and Other Matters) Amendment Bill
Construction Contracts Amendment Bill
Gambling Amendment Bill (No 3)
Harmful Digital Communications Bill
Health (Protection) Amendment Bill
Human Rights Amendment Bill
Insolvency Practitioners Bill
Judicature Modernisation Bill
Natural Health and Supplementary Products Bill (formerly the Natural Health Products Bill)
New Zealand Superannuation and Retirement Income Amendment Bill
Organised Crime and Anti-corruption Amendment Bill
Passports Amendment Bill (No 2) Bill
Radio New Zealand Amendment Bill
Standards and Accreditation Bill
Taxation (New Zealand Superannuation and Retirement Income) Bill (formerly part of the New Zealand Superannuation and Retirement Income Amendment Bill)
Waitangi National Trust Board Amendment Bill
Weathertight Homes Resolution Services Amendment Bill


Acts assented

Accident Compensation (Financial Responsibility and Transparency) Amendment Act 2015
This Act amends the Accident Compensation Act 2001 to introduce certain principles of financial responsibility to guide the setting of residual levies. In particular, the Act requires that the Minister, when making recommendations setting levies, must have regard to: the principle that levies derived for each account should meet the lifetime cost of claims in relation to injuries that occur in a particular year; that account deficits should be corrected by setting appropriate levies in the subsequent year(s); and that large changes in levies should be avoided. The Act also requires that the Minister issue a funding policy statement within 12 months of the Act coming into force on 24 September 2015, addressing a number of matters including: target levels for account funding; an approach to managing deviations; and limits in levy changes.

Environmental Reporting Act 2015
This Act establishes a new framework for environmental reporting that requires the Secretary for the Environment and the Government Statistician to report to the responsible Minister and the House, on one of five environmental “domains” every six months. The Act also requires that the Secretary and Government Statistician provide a “synthesis” report, giving an overall picture of New Zealand's environment, once every three years. The Act provides that these reports are to be compiled independently of any Minister of the Crown, and that the Parliamentary Commissioner for the Environment may, in his or her discretion, report on any of reports released under the Act, or the process that produced it.

Land Transfer Amendment Act 2015 (formerly part of the Taxation (Land Information and Offshore Persons Information) Bill
This Act amends the Land Transfer Act 1952 to insert sections 156A and 156J into the principal Act to require vendors and purchasers of land to provide a tax statement to the Inland Revenue Department (IRD). The tax statement must include whether the vendor and purchaser are New Zealand citizens, their IRD numbers, and where they are treated as a tax resident. If the vendor or purchaser is not a New Zealand tax resident, certain information about their overseas tax liability must also be provided to the IRD. This Act, along with the Tax Administration Amendment Act 2015 intends to improve compliance with the requirements of the Income Tax Act 2007.  

New Zealand Flag Referendums Amendment Act 2015
This Act amends the New Zealand Flag Referendums Act 2015 to increase the number of alternative flag designs voted upon in the first flag referendum, established by the principal Act, from four to five. This Act also makes a number of consequential amendments to the New Zealand Flag Referendums (First Flag Referendum) Order 2015. These amendments are to enable the design commonly known as “Red Peak” to be added to the first referendum paper, alongside the four proposed designs previously selected by the Flag Consideration Panel. 

Reserves and Other Lands Disposal Act 2015
This Act makes a number of technical changes to the status of certain land titles and parcels of land, as well as to previous Reserves and Other Lands Disposal Acts. The technical changes affect 16 locations around New Zealand, including the Auckland Art Gallery, Taieri Airport land, and Kahurangi National Park. 

Sale and Supply of Alcohol (Rugby World Cup 2015 Extended Trading Hours) Amendment Act 2015
This Act extends the licensing hours of premises covered by the Sale and Supply of Alcohol Act 2012 to permit premises to remain open for all games of the 2015 Rugby World Cup. The Act inserts additional conditions into current licences so that if a Rugby World Cup game starts within two hours of the end of the standard closing hours of a premises, those hours are extended until 30 minutes after the end of that game. The Act also amends current licence conditions so that if a game starts more than two hours after the end of the standard hours of a premises, those hours are extended to enable the premises to open one hour before the start of the game, and remain open for the sale of alcohol 30 minutes after the conclusion of the game. To qualify for the extended hours, the Act requires the relevant premises to comply with certain conditions including providing the relevant licensing committee and Police with at least seven days notice of its intent to open and to provide the details of an appropriate noise management plan to manage effects of the extended hours on the locality.

Tax Administration Amendment Act 2015 (formerly part of the Taxation (Land Information and Offshore Persons Information) Bill
This Act amends the Tax Administration Act 1994 by inserting section 24BA into the principal Act which prohibits the Commissioner from allocating a tax file number in response to an offshore person’s request for a tax file number, unless the Commissioner first receives a current bank account number for that person. This Act, along with the Land Transfer Amendment Act 2015, intends to improve compliance with the requirements of the Income Tax Act 2007.  

Tariff (Free Trade Agreement between New Zealand and the Republic of Korea) Amendment Act 2015
This Act gives effect to the Free Trade Agreement between New Zealand and the Republic of Korea signed on 23 March 2015 by making a number of technical amendments to the Tariff Act 1988. The Act applies preferential tariff rates under the Free Trade Agreement and provides provisional transitional measures to be applied as required on Korean imports.

Te Kawerau ā Maki Claims Settlement Act 2015
This Act gives effect to the settlement deed entered into between the Crown and Te Kawerau ā Maki on 22 February 2014 for the final settlement of historical Treaty of Waitangi claims of Te Kawerau ā Maki. The Act provides an apology to the Waitakare based iwi and range of cultural and commercial redress.

The following Acts were formerly part of the Health and Safety Reform Bill, and each respectively makes a number of technical amendments to the principal Act. The new Acts are:

  • Accident Compensation Amendment Act 2015
    Employment Relations Amendment Act 2015;
  • Hazardous Substances and New Organisms Amendment Act 2015
  • Health and Safety at Work Act 2015; and
  • WorkSafe New Zealand Amendment Act 2015

The following Acts were formerly part of the Te Hiku Claims Settlement Bill. Each gives effect to the various settlement deeds entered into between the Crown and the relevant iwi, and provides for the final settlement of historical Treaty of Waitangi claims of that iwi, or makes the necessary statutory amendments to implement that deed (whilst preserving the position of those iwi in the region who have not yet reached a settlement with the Crown). The new Acts are:

  • Ngāti Kuri Claims Settlement Act 2015;
  • Ngāti Kahu Accumulated Rentals Trust Act 2015;
  • Ngāi Takoto Claims Settlement Act 2015;
  • Reserves and Other Lands Disposal Act 1977 Amendment Act;
  • Te Aupouri Claims Settlement Act 2015; and
  • Te Rarawa Claims Settlement Act 2015

Legislative instruments

Accident Compensation (Effective Date for Repeal of Residual Levies Provisions) Notice 2015
Climate Change (Forestry Sector) Amendment Regulations 2015
Climate Change (Liquid Fossil Fuels) Amendment Regulations 2015
Climate Change (Stationary Energy and Industrial Processes) Amendment Regulations 2015
Climate Change (Synthetic Greenhouse Gas Levies) Amendment Regulations 2015
Climate Change (Unique Emissions Factors) Amendment Regulations 2015
Climate Change (Waste) Amendment Regulations 2015
Companies (Maximum Priority Amount) Order 2015
Copyright (Infringing File Sharing and Cellular Mobile Networks) Order 2015
Education (2016 School Staffing) Amendment Order 2015
Electronic Identity Verification Amendment Regulations (No 2) 2015
Exclusive Economic Zone and Continental Shelf (Environmental Effects) Amendment Act 2013 Commencement Order 2015
Exclusive Economic Zone and Continental Shelf (Environmental Effects – Burial at Sea) Regulations 2015
Exclusive Economic Zone and Continental Shelf (Environmental Effects – Discharge and Dumping) Regulations 2015
Financial Markets Conduct (DIMS Providers – Reporting on Percentage-based Charges)
Exemption Notice 2015
Fisheries (Declaration of Mataitai Reserve) Notice 1998 Amendment Notice 2015
Fisheries (Notification of Tāngata Tiaki/Kaitiaki for Area/Rohe Moana of Waihōpai Rūnaka) Notice 2015
Fisheries (Notification of Tāngata Tiaki/Kaitiaki for Mātaitai Reserve at Mataura River) Notice 2015
Fisheries (Total Allowable Catch, Total Allowable Commercial Catch, and Deemed Value Rates) Notice 2015
Fisheries (Total Allowable Catch, Total Allowable Commercial Catch, and Deemed Value Rates) Amendment Notice 2015
Health Practitioners (Protected Quality Assurance Activity – University of Otago SAMM Kids Audit) Notice 2015
Immigration (Carriers' Information Obligations) Amendment Regulations 2015
Immigration (Refugee and Protection Status Processing) Amendment Regulations 2015
Immigration (Visa, Entry Permission, and Related Matters) Amendment Regulations (No 2) 2015
Income Tax (Fringe Benefit Tax, Interest on Loans) Amendment Regulations 2015
Insolvency (Maximum Priority Amount) Order 2015                
Legal Services (Quality Assurance) Amendment Regulations 2015
Land Transfer (Land Information and Offshore Persons Information) Exemption Regulations 2015
Lotto Amendment Rules 2015
Marine Protection (Offences) Amendment Regulations 2015
New Zealand Flag Referendums (First Flag Referendum) Order 2015
New Zealand Flag Referendums (Second Flag Referendum) Order 2015

In the week ahead

What’s coming up in the House

When the House resumes on Tuesday 13 October the Government will look to progress the Environment Canterbury (Transitional Governance Arrangements) Bill, the Taxation (Transformation: First Phase Simplification and Other Measures) Bill and the Home and Community Support (Payment for Travel Between Clients) Settlement Bill. 

In committee

Recent Committee meetings

Select Committees met over the last two weeks.

The Finance and Expenditure Committee considered the Taxation (Bright-line Test for Residential Land) Bill and Office of the Auditor-General Annual Plan for the year 2015/16.

The Local Government and Environment Committee considered the Environmental Protection Authority (Protection of Environment) Amendment Bill.

The Law and Order Committee was briefed on the New Zealand Public Interest Project (NZPIP). NZPIP, founded by a volunteer team consisting of prominent lawyers, academics, investigators and forensic scientists, assesses cases of possible wrongful convictions in New Zealand and works on cases that are in the public interest that are not taken up elsewhere (ie such as test cases or class actions).

The Primary Production Committee was briefed on intensive dairy farming systems by Dr Bruce Thorrold (DairyNZ Ltd) and Dr Mark Shepherd (AgResearch Ltd). The presenters submitted that Pastoral 21 is a collaborative venture between DairyNZ, Fonterra, Dairy Companies Association of New Zealand, Beef + Lamb NZ and the Ministry of Business, Innovation and Employment. The purpose of Pastoral 21 is “to provide accessible systems-level solutions for profitably increasing pastoral production while reducing farms’ nutrient losses to water”. The venture seeks to achieve this purpose by developing:

  • proven next generation dairy systems to increase profitability from production and reduce nitrogen and phosphorous losses to water;
  • innovative options for redesigning the diverse range of mixed livestock systems on hill country, to significantly lift their productivity and profitability; and
  • next generation ideas that enable the quantum leap of reversing the current relationship between production gains and water quality impacts

A copy of the briefing paper can be found here. The supplementary presentation to the briefing paper can be found here.

The Regulations Review Committee was briefed on the Investigation into the Canterbury District Order Plan.

The Transport and Industrial Relations Committee considered the Minimum Wage (Contractor Remuneration) Amendment Bill, and was briefed by Crest Clean Commercial Cleaning Ltd on the introduction of Cleaning Industry Training Standards.

In trade

Tariff concessions

The following applications for tariff concessions have been made in the past two weeks:

Applicant

Proposed tariff concession

Tariff item

Closing date for objections (2015)

BOC Limited
Auckland

Face shields, designed for safety, with or without respiratory protection; including parts and components, imported together with face shields or separately, excluding parts for general use

39.17)
39.26)
42.02)
42.05)
65.06)
73.18)
84.14)
84.21)
84.81)
85.04)

13 October

Parts and components, of welding masks and helmets of 39.26 and 65.06, excluding parts for general use

39.17)
39.26)
42.02)
42.05)
65.06)
73.18)
84.14)
84.21)
84.81)
85.04)

13 October

D M Standen Limited
Auckland

Stranded wire, cables, cordage, ropes, plaited bands, slings and the like of iron steel wire

7312.10)
7312.90)

13 October

Fletcher Steel Limited
Auckland

Steel formwork, control joints and elements; of a kind used in the construction of concrete floors, walls and ceilings

73.26

13 October

Leaderbrand Produce Limited Auckland

Printed retort pouches suited for use in the packaging of foodstuffs, for own use in manufacture by Leaderbrand Produce Limited

3923.29.15

13 October

Iplex Pipeline (NZ) Limited
Palmerston North

Pressure pipe composite seal, comprising synthetic rubber seal with an integrated plastic reinforcement

4016.93.00

13 October

Lee Arthur Holdings Limited Christchurch

Woven fabrics containing wool:

  • 45% wool, 55% polyester; 370/390 Lmtr – 4,000m²
  • 45% wool, 55% polyester; 370/390 g/m² – 3,000m²
  • 60% wool, 40% polyester; 250/275 Lmtr – 3,000m²

5111.20.08)
5515.13.29)

20 October

In consultation

New

Who

What

By when (2015)

Department of Conservation

Request for visitor experience proposals at Stony Batter Historic Reserve

7 October

Recreational, community, and cultural values associated with Whakaipo Bay to inform Whakaipo Bay Management Plan 

16 October

Application by Matthew Foy for a marine mammal watching permit in Kaikoura to operate commercial tours

20 October

Intention to grant concession to Waipu Cove Surf Life Saving Club

28 October

Intention to grant concession to Hutt City Council for Bracken Street Conservation Area

4 November

Intention to grant concession to Otago Regional Council for river flow monitoring site in the Wilkin River Marginal Strip

4 November

Intention to grant concession to Otago Rural Fire Authority for Otago Rural Fire Centre

4 November

Intention to grant five year concession to Roel Wijland for a right to occupy the St Bathans Gold Office

11 November

Intention to grant concession to Deerstalkers Association for Mid Greenstone Hut and Upper Caples Hut

13 November

Intention to grant concession to Aoraki/Mt Cook Guiding Company

24 November

Electricity Authority

Proposed generation fault ride through standards for all generating plants to be added to the Electricity Code

6 October

Environmental Protection Authority

Reassessment of substances containing carbaryl, chlorpyrifos, and diazinon used as active ingredients in veterinary medicines or in substances used as non-plant protection insecticides

6 October

Application for the release of the moth plant rust fungus Puccinia araujiae to help control the weed, moth plant (Araujia hortorum)

7 October

Financial Markets Authority

Proposed Financial Markets Conduct Act 2013 exemption for offers made through authorised financial advisors providing personalised discretionary investment management services

8 October

Proposed Financial Markets Conduct Act 2013 exemption for employee share purchase schemes

15 October

Consultation paper on whether charities raising funds through debt securities should be subject to standard Financial Markets Conduct Act 2013 obligations

5 November

Proposed Financial Markets Conduct Act 2013 designation and exemption for companies used to manage costs in real property communal facilities

6 November

Food Standards Australia New Zealand

Application seeking permission to voluntarily add vitamins and minerals to nut-and-seed based beverages

16 October

Proposal to correct technical and formatting errors in the revised Food Standards Code

23 October

Application to permit a corn line MON87403 that is genetically modified to a higher yield

28 October

Application seeking permission to use a Salmonella bacteriophage for use as a fresh meat and poultry processing aid

6 November

Call for submissions on corn line MZHG0JG that is genetically modified to be tolerant to certain herbicides

6 November

Inland Revenue Department

Official issues paper Closely Held Company Taxation Issues seeking feedback on proposals to strengthen the closely held company tax rules

16 October

Official issues paper Loss Grouping and Imputation Credits seeking feedback on the tax consequences of loss grouping and the implications for credits

27 October

Official issues paper GST-Current Issues containing options to improve the way certain GST-related rules work in practice

30 October

Ministry of Business, Innovation and Employment

Review of the Telecommunications Act 2001

27 October

Review of aspects of the Engine Fuel Specifications Regulations 2011

30 October

Ministry of Health

Guide to the Commissioning Framework for Mental Health and Addiction 2015

30 October

Ministry for the Environment

Draft guide to attributes in Appendix 2 of the National Policy Statement for Freshwater Management 2014

30 October

Ministry for Primary Industries

Draft import health standard for seeds for sowing, and changes to the protocol for testing for the presence of genetically modified seed

8 October

2016 New Zealand Total Diet Study assessing population dietary exposure to certain chemicals from a range of typical foods

12 October

Proposed amendments to the import health standard and guidance for vehicles, machinery and tyes

6 November

New Zealand Transport Agency

Guidelines to assist traffic signal owners, design consultants, and suppliers

26 October

Pharmac

Proposal to list a range of Interventional cardiology products in Part III of Section H of the Pharmaceutical Schedule

9 October

Funding arrangements to improve access to medicines and devices in primary care

2 November

Reserve Bank

Review of the outsourcing policy for registered banks

4 December

Standards New Zealand - Joint standards

Electromagnetic compatibility:

  • Emission requirements
  • Part 2: Requirements for household appliances, electric tools and similar apparatus –  Immunity – Product family standard
  • Part 6.7: Generic standards – Immunity requirements for equipment intended to perform functions in a safety-related system in industrial locations

7 October

Sound and television broadcast receivers and associated equipment:

  • Radio disturbance characteristics – Limits and methods of measurement

7 October

Specification for radio disturbance and immunity measuring apparatus and methods:

  • Part 1.5: Radio disturbance and immunity measuring apparatus – Antenna calibration sites and reference test sites for 5 MHz to 18GHz

7 October

Requirements for calibration sites used to perform antenna calibrations according to AS/NZS CISPR 16.16 and reference test sites used according to AS/NZS CISPR16.1.4

7 October

Explosive atmospheres:

  • Part 7: Equipment protection by increased safety ‘e’
  • Part 18: Equipment protection by encapsulation ‘m’
  • Part 28: Protection of equipment and transmission systems using optical radiation
  • Part 30.2: Electrical resistance trace heating – Application guide for design, installation and maintenance

8 October

Medical electrical equipment:

  • Part 2.28: Particular requirements for the basic safety and essential performance of X-ray tube assemblies for medical diagnosis
  • Part 2.29: Particular requirements for the basic safety and essential performance of radiotherapy simulators
  • Part 2.31: Particular requirements for the basic safety and essential performance of external cardiac pacemakers with internal power source

13 October

Explosive atmospheres:

  • Part 39: Intrinsically safe systems with electronically controlled spark duration limitation
  • Part 40: Requirements for process sealing between flammable process fluids and electrical systems

21 October

Amplitude modulated equipment for use in the aeronautical radio service in the frequency range 118 MHz to 137 MHz

21 October

Maritime survivor locating systems:

  • Part 4: Maritime low power personal locating devices employing Automatic Identification System

21 October

Structural design requirements for utility service poles

26 October

Radiofrequency fields:

  • Part 2: Principles and methods of measurement and computation – 3 KHz to 300 GHz

29 October

Conformity assessment – Requirements for bodies providing audit and certification of management systems:

  • Part 1: Requirements

30 October

Hot-dip galvanized coatings on threaded fasteners (ISO metric coarse thread series)

11 November

Methods of testing bitumen and related road making products:

  • Method 8: Determination of matter insoluble in toluene

17 November

WorkSafe NZ

Hazardous Substances and New Organisms Code of Practice amendments

2 October

Current

Who

What

By when (2015)

Commerce Commission

Transpower TPM operational review initial consultation paper

Ongoing

Department of Conservation

Abel Tasman Foreshore Scenic Reserve Management Plan partial review

12 October

Intention to grant concession to Ruapehu Alpine Lifts Ltd for a licence to occupy Whakapapa Ski Area

21 October

Changes in status of New Zealand bat, bird, reptile and frog taxa to inform a revision of the lists for these groups in the New Zealand Threat Classification System

31 October

Review of wildlife, research and collection authorisations undertaken on public conservation land

Ongoing

Ministry for Primary Industries

Draft import health standard for importing animal fibre

18 October

Standards New Zealand
- Joint standards

 

 

Gas Installations:

  • Part 1 – Gas installations
  • Part 2: LP Gas installations in caravans and boats for non-propulsive purposes

19 October

Approval and test specification – Electrical safety requirements and test methods for residual current devices

21 October

Luminaries Part 2.1: particular requirements – fixed general purpose luminaries

21 October


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