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Watching Brief – February 2015

Home Insights Watching Brief – February 2015

Matter of opinion

2015 – The Year of RMA Reform

Tony Abbott’s travails across the ditch have only highlighted John Key's ongoing popularity, consummate political skills and general command of the political scene. This is again reflected in the handling of the SKYCITY imbroglio, where initial missteps – including the warning of an “eyesore” – were rapidly shut down. As an aside, in an innovative new approach in the political landscape, Labour’s on-line petition against a SKYCITY pay-out is an interesting development. The number of signatories was not insignificant. Perhaps, more importantly, the format and message could be readily and widely shared across the online community. A similar petition against the state house sale programme is currently circulating. It may be too early to call whether this mechanism will provide Labour with an effective, and much needed, means of connecting with its support base.

Looking further ahead, the big ticket reform item on National’s ‘to do’ list this year is the next phase RMA reforms. Amendment of the RMA has historically been viewed by the National Party as a “fix it” for a range of ills, most recently housing affordability in Auckland. While there can be no doubt the reforms will introduce significant change, the problem for National is whether they can produce the much trumpeted results. The RMA is but one aspect, and arguably a small one at that, in the complex market dynamics that are leading to Auckland's housing problems. In so closely linking much needed RMA reform with the housing supply issues in Auckland, the Government risks creating a hostage to fortune.

Details of the proposed RMA changes (which will emerge over the next few months) are sketchy at present but are most likely to focus on process together with a greater emphasis on economic development than previously. While many of the changes could improve the current operation of the RMA, they may well not result in tangible positive change in outcomes in the short to medium term. There will likely be a significant lead in time as new processes and requirements are bedded in, understood and tested, bringing initial additional cost. In addition, some of the changes will have minimal impact on overall outcomes in terms of time and efficiency. For example, the removal of appeal rights only results in additional processes at the front end. This has already been observed in Auckland (the Unitary Plan process) and Christchurch, where alternative processes, without appeals, have been rolled out. These processes have proved complex and time consuming in different ways and, if anything, have shut out the general public.

A greater focus on economic development in the RMA will be welcomed by many but, again, will not necessarily result in significant tangible change. Relevantly, economic development was highlighted in legislation establishing the Environmental Protection Authority as guardian of the exclusive economic zone. Yet two out of two new mining permits have been turned down. This is a stark reminder that environmental protection remains a core objective of this type of legislation and the effect of activities will inevitably be viewed on occasions as too adverse or uncertain.

The RMA is a complex beast and amendment, while signalled as a panacea against red tape among other things, was never going to be simply that. However, all should applaud the PM’s application of some of his political capital in this major piece of our legal infrastructure.

In the news

MPI publishes food recall guidance document

The Ministry for Primary Industries (MPI) has published a food recall guidance document for the food and beverage industry, setting out the required procedures for identifying and removing unsafe food from the food chain as a result of a food safety issue. Such food safety issues might include packaging defects, preservation failures, production problems, contaminated ingredients, sabotage or inadequate labelling.

To assist food businesses to plan ahead, and to have a written system in place to manage recalls, the guidance material outlines:

  • the roles of the regulatory authorities and the food industry during a recall;
  • the risk assessment process;
  • the elements of a product recall plan;
  • the actions to take when food must be removed from the market; and
  • MPI’s standards for product recall notices and guidelines for media communication

All manufacturers, wholesalers and importers of food products are required to have a written system in place. However, not all food businesses within the food sector (ie restaurants, cafes, caterers and takeaways) will be required to develop food recall plans. These businesses may nevertheless be involved in another business’s recall, requiring the removal and return of recalled stock to the manufacturer to ensure that it is not used for human consumption. For businesses developing a written food recall plan, the guidelines assist in detailing the requisite features.


MPI consults on proposed food safety regulations

The Ministry for Primary Industries (MPI) has launched a public consultation on its proposal for new food safety regulations under the Food Act 2014 (Act). The proposal provides food industry participants with a snapshot of the standards to which they are likely to be held in future and the manner in which they will need to demonstrate their compliance.

The Act’s new regime operates like a sliding scale, with food businesses that pose higher risks from a food safety perspective being subject to more stringent food safety requirements and checks than lower risk businesses. For instance:

  • Higher risk businesses (such as manufacturers of baby foods, dairy products, meats and ready-to-eat meals) will need to operate under a written, registered and regularly verified Food Control Plan (FCP). FCPs identify business’ potential food safety risks and the steps that will be taken to manage them; and
  • Businesses that produce or sell low to medium risk foods (such as non-alcoholic beverages, confectionery, fruits or vegetables) will need to operate under one of three levels of National Programme (NP) and follow the requirements for producing safe food that will be specified in the regulations. However, they will not be required to register a fully-documented risk management plan

MPI’s proposed regulations create the detailed systems and processes required to support the new regime at a practical level, and clarify a number of pressing questions relating to registration, verification, food safety and suitability, cost recovery, residues, importers’ obligations, infringement offences and transitional arrangements. A more detailed discussion is provided in the following Russell McVeagh Food Law Update, available here.

MPI has run 12 public consultation meetings across the country, at which it sought to explain the proposal and answer attendees' questions. MPI has asked interested parties to file comments on the proposal via its electronic Submission Form by:

  • 5pm on 20 February (for comments on MPI's cost recovery proposal); and
  • 5pm on 31 March (for all other proposals)

Following consultation, MPI will assess all submissions, follow-up with interested parties and make any necessary changes to the proposal. MPI will carry out further consultation on discrete aspects of the regulations in mid to late 2015, with the final regulations coming into effect by 1 March 2016.

MPI’s Proposals for regulations under the Food Act 2014 is available here.


Auditor-General publishes report on MPI

The Auditor-General’s report, “Ministry for Primary Industries: Managing the Primary Growth Partnership” was presented to the House of Representatives on 11 February 2015. The Primary Growth Partnership (PGP) is an initiative launched by the Government in 2009 to increase the sustainability and economic growth of the primary and food industries by creating partnerships between government and industry participants. The report follows a request by the Primary Production Committee (a select committee of Parliament) for the Office of the Auditor-General to launch an inquiry into the PGP, following the Committee’s concerns around the transparency and accountability of the partnerships. 

Key recommendations for the Ministry for Primary Industries include:

  • improving current documentation of Investment Advisory Panel discussions and decisions. This should create an “easy-to-follow” trail of how PGP criteria have been considered by the Ministry and the Investment Advisory Panel in informing decision-making;
  • ensuring that the Ministry’s current work results in reliable tracking and evaluation of the long-term outcomes and economic benefits that PGP programmes and the PGP portfolio achieve; and
  • using a consistent and easily understood format to publicly report the progress and achievements of PGP programmes and the PGP portfolio.

The report predicts that it is “too soon” to observe the economic benefits of PGP programmes for primary industries, estimating that it will take another five to ten years to see results. A copy of the full report can be found here.


FSANZ consulting on additives in beer

Food Standards Australia New Zealand (FSANZ) has published a consultation paper proposing to permit use of citric and lactic acids as food additives in beer. The Food Standards Code (Code) currently permits citric and lactic acids to be added to wine, fruit and vegetable wines, spirits, and various other foods, but not beer. 

The purpose of adding these food acids in beer production is to reduce the pH for lower strength and flavoured beers. Such acidity adjustment can improve the flavour profile of these types of beer.

FSANZ completed a risk assessment late last year and has concluded that adding citric and lactic acid to beer and related products is technologically justified and safe. Citric and lactic acids are already permitted additives for beer and related food categories in the food regulations of other (eg USA, Canada and Europe), as well as in the Codex Alimentarius General Standard for Food Additives (GSFA). By permitting these additives in beer, the Code would therefore be consistent with international regulations and trading partners.

FSANZ has prepared a draft variation to permit the food additives citric and lactic acids to be added to beer and related products and is now seeking submissions from stakeholders in the form of a public consultation process.

In assessing this food regulatory measure, FSANZ has had regard to a number of matters, which interested parties should be prepared to consider addressing in their submissions. For example:

  • a cost benefit analysis;
  • the protection of public health and safety;
  • the provision of adequate information relating to food to enable consumers to make informed choices;
  • the prevention of misleading and deceptive conduct;
  • a risk analysis to be based on scientific evidence;
  • consistency between domestic and international food standards;
  • the desirability of an efficient and internationally competitive food industry; and
  • the promotion of fair trading in food

FSANZ’s consultation document can be found here. The deadline for submissions is 27 February.


FMA issues guidance and principles on corporate governance

The Financial Markets Authority (FMA) has published a revised version of the handbook: Corporate Governance in New Zealand – Principles and Guidelines.

Following a consultation process in November 2014, the FMA received 28 written submissions from a variety of market participants including professional bodies, fund managers, corporate, auditors, proxy voting firms and risk management specialists. These submissions have now been considered and incorporated into the revised version. As some submitters supported a broader review and a further refinement of the principles and guidelines, the FMA has integrated some substantive and technical changes into the guidelines as a result.

The FMA’s principal role is to regulate capital markets and financial services in New Zealand. To this extent it considers that good corporate governance plays a vital role in contributing to markets that are fair, efficient and transparent. The FMA’s revised handbook sets out examples of the types of corporate governance structures and processes that will help entities comply with each principle. Whether these guidelines are suitable for a particular entity or not will depend on a number of factors, for instance, the entity’s size, activities and ownership structure.

The revised principles for corporate governance include:

  • Ethical standards – Directors should set high standards of ethical behaviour, model this behaviour and hold management accountable for delivering these standards throughout the organisation;
  • Board composition and performance – to ensure an effective board there should be a balance of independence, skills, knowledge, experience and perspectives;
  • Board committees – the board should use committees where this will enhance its effectiveness in key areas, while still retaining board responsibility;
  • Reporting and disclosure – the board should demand integrity in financial reporting and in the timeliness and balance of corporate disclosures;
  • Remuneration – the remuneration of directors and executives should be transparent, fair and reasonable;
  • Risk management – Directors should have a sound understanding of the key risks faced by the business, and should regularly verify there are appropriate processes to identify and manage these;
  • Auditors – the board should ensure the quality and independence of the external audit process;
  • Shareholder relations – the board should foster constructive relationships with shareholders that encourage them to engage with the entity; and
  • Stakeholder interests – the board should respect the interests of stakeholders, taking into account the entity’s ownership type and its fundamental purpose.

As opposed to taking a prescriptive approach (requiring boards to ‘comply or explain why not’) the handbook recommends that boards should strive to provide sufficient meaningful information to show how they meet the nine high-level principles, effectively enabling a certain level of flexibility in reporting.

A copy of the FMA’s revised handbook and guidelines can be found here.


FMA issues guidance on effective disclosure

The Financial Markets Authority (FMA) has released an updated guidance note on effective disclosure, which incorporates changes to reflect the Financial Markets Conduct Act 2013 (FMC Act), as well as changes to both the FMA’s internal approach and market practice in preparing disclosure documents.

The guidance note relates to the issuing of securities under the Securities Act 1978, as provided for in the transitional provisions of the FMC Act. It seeks to summarise the FMA’s intended approach to its review of prospectuses and investment statements for compliance with the law.

The FMC Act, which is now in effect, contains transitional provisions which provide for certain offers of securities to be made under the old Securities Act 1978 until 30 November 2016.

The guidance note focuses on new offers made under the Securities Act 1978 during the transitional period allowed by the FMC Act, as well as providing further guidance applicable only to offers of securities under the FMC Act.

The guidance note addresses the following aspects of effective disclosure:

  • The legal requirements of disclosure – a Product Disclosure Statement (PDS) must be “clear, concise and effective”, and must contain the information prescribed by regulations;
  • Advice for being “clear, concise and effective” – this is largely common sense advice, and includes recommendations to write with an active voice, employ diagrams and charts, and to use short sentences;
  • Approach to “key information” – a PDS under the FMC Act may contain a “key information summary”. The FMA considers this to be a useful tool for achieving the clarity, brevity and effectiveness required of a PDS, and sets out the factors to consider including in the key information summary, such as offer terms, benefits, principal risks, and fees and costs;
  • Material information – a PDS is not required to contain all information material to the offer. Any material information not contained in the PDS must be contained in the register entry. The guidance seeks to assist offerors in determining which information is “material” to an offer; and
  • Financial information – the guidance suggests that financial information (which includes information relating to past and future performance, audited and unaudited data, in whatever format) must be presented in a way which is clear, effective, concise, and not misleading

The guidance note can be found here.


Commerce Commission’s final decision on telecommunications liability allocation

The Commerce Commission (Commission) has released its final decision setting out the amounts that various telecommunications providers in New Zealand will pay toward the 2013/2014 Telecommunications Development Levy (TDL).

The TDL was established by an amendment to the Telecommunications Act 2001 in 2011. It is set at $50 million per year (approximately 1% of telecommunications service revenue), and is paid by telecommunications companies earning over $10 million per year. A telecommunications provider is one which operates a component of a public telecommunications network (fixed or wireless).

The TDL is used by the Government to provide funding for telecommunications services in the public interest that would otherwise not be available or affordable. These include various aspects of telecommunications infrastructure, such as services for the deaf and hearing impaired, rural broadband, and improvements to the 111 emergency service.

One of the Commission’s statutory functions under the Telecommunications Act 2001 is to prepare an annual TDL liability allocation determination. This process involves the publishing of documents to help Qualifying Liable Persons (QLPs) comply with the TDL requirements, for example by providing templates to assist with the provision of required information.

The Commission released a draft liability allocation determination on 12 November 2014, which required that almost 90% of the contributions will be paid by Spark, Chorus and Vodafone.

While the Commission’s final report makes certain minor adjustments to individual payment levels, it is broadly consistent with the draft liability allocation, and continues to require around 90% of the total $50 million to be contributed by the three largest telecommunications providers.

The final report, along with the Commission’s draft determination and submissions received by the Commission over the course of its deliberations, can be found here.


Regulations Review Committee inquiry into parliamentary response to emergencies

The Regulations Review Committee (RRC) is conducting an Inquiry into Parliament’s legislative response to future national emergencies. 

The nature of emergencies is that they often require a rapid and effective response from public agencies. In order to provide such a response, it may be necessary for the Government to exercise wider legislative or regulatory powers than are necessary when there is no emergency. The purpose of this inquiry is to establish the most appropriate legislative model for enabling and facilitating response to and recovery from national emergencies. 

The RRC is a constitutional committee rather than a policy committee. It focuses on whether the use of delegated legislation to implement a policy is in accordance with good constitutional practice, and does not focus on the merits of the policy itself. While the emergency powers exercised following the Canterbury earthquakes (including the passing and application of the Canterbury Earthquake Response and Recovery Act 2010) will inform the Inquiry, it is not intended to examine any substantive issues arising from those events. The Inquiry’s terms of reference include establishing guiding principles for the expiry of recovery legislation, and the legitimacy of actions taken under recovery legislation once the authority to act has expired.

The RRC is empowered to make recommendations only – any amendments to regulations or primary legislation will be a matter for the Government or Parliament respectively. The Government must however consider the recommendations and make a written response to them within 60 days of RRC’s report being presented to Parliament.

Submissions to the RRC are due by 1 March.


LGNZ consults on funding for local governments

Local Government New Zealand (LGNZ) has released a consultation paper on funding for local government. This consultation is intended to be a response to demographic and economic and infrastructure challenges facing councils, and aims to resolve issues with how councils deal with these challenges.    

LGNZ is governed by a National Council, made up of 15 elected members from throughout New Zealand. These members represent the national interests of councils and aim to lead best practice in the local government sector.

The funding consultation paper is part of a two stage process. The first step is to stimulate discussion about various funding opportunities and constraints in New Zealand. The second stage will incorporate responses and ideas to produce a final paper that proposes a strategy and a long-term, sustainable funding model. The consultation paper has been commissioned by local government utilising a multi-sector “Working Group”, and has not arisen as part of a central government process. The paper took shape over six Working Group meetings between July and December 2014.

The paper identifies the key pressures on councils around New Zealand as:

  • changing demographic and economic growth;
  • increasing community and central government expectations; and
  • increasing impacts from natural hazards and environmental challenges

The funding challenge is not seen to be limited to operational costs, as there are also significant pressures on long-term capital expenditure. This is particularly relevant to Auckland Council, where spending is anticipated to be in the range of $10-15 billion in the next 30 years. A further issue is that councils on average raise 8.3% of all public revenue, while spending approximately 10.5% of all public expenditure.

The paper proposes a new “principles-based partnership” model with central government. This model would create new obligations on central and local government. For example, where central government decisions have cost implications for local governments, it would have to:

  • consult local government;
  • include costs and benefits for local councils in its cost benefit analyses; and
  • provide co-funding for implementation when policy generates national as well as local benefits

LGNZ hopes that this model will result in better regulation and cooperation, and will reduce costs created by standards and regulations that are deemed inappropriate or are too inflexible in practice.

The full report can be accessed here. Submissions close on 27 March.


Ombudsman reports on Treaty settlements and the OIA

The Chief Ombudsman recently released an opinion relating to the ongoing refusal of the Office of Treaty Settlements (OTS) to provide documents under the Official Information Act 1982 (OIA) relating to Treaty settlement negotiations with Whanganui Iwi.

In 2009 a requestor had sought from OTS copies of any Crown correspondence with Whanganui Iwi regarding water co-management or proposals for water co-management. The Whanganui Iwi Treaty claims are some of the longest-standing in New Zealand (some claims going back 140 years), and encompass issues relating to the Whanganui River, loss of land, and other cultural and economic matters. 

Between 2009 and 2014, OTS (part of the Ministry of Justice) withheld the information sought, citing section 9(2)(j) of the OIA. This provision states that a government agency has good reason for withholding official information if the withholding of that information is necessary to enable the Crown to carry on negotiations without prejudice or disadvantage (and there is not a greater public interest in making the information available).

The Chief Ombudsman supported the reasons given by OTS for refusing to disclose the information. She stated that despite the age of some of the documents (going back to 2004), there was a real risk that the Crown’s ability to finalise negotiations would be prejudiced or disadvantaged by the documents’ release. Further, the public interest did not outweigh the reasons for withholding, because releasing the documents would adversely affect the relationship of trust between the Crown and the Whanganui Iwi and would thereby undermine negotiations.

This opinion has been seen to be an important clarification for OTS and stakeholders in the Treaty settlement process. Indeed OTS receives many requests under the OIA relating to some of the most controversial and politically charged matters facing the Government.

The Chief Ombudsman’s opinion can be found here.


New Fair Insurance Code

The Insurance Council of New Zealand (ICNZ) has announced it will voluntarily be adopting a new Fair Insurance Code. This Code will seek to impose new standards on ICNZ when it deals with small to medium sized enterprises and services consumers. The Code aims to set a high benchmark for self-regulation in order to gain the public’s trust and confidence.

ICNZ’s Chief Executive Tim Grafton has stated that the standards will include minimum timeframes for responding to claims and keeping parties informed about the progress of the claim. Although servicing consumer claims are a focus of the Code, a higher standard of service will be imposed for all dealings. Other keys changes include insurers committing to act reasonably when an insured party fails to disclose relevant information, and training staff and agents about the Code to ensure they are aware of their responsibilities.

Sanctions will be imposed for significant breaches, with a view to increasing accountability. These sanctions will range from a fine to expulsion from ICNZ. The breaches will also be announced publicly, with the aim of introducing another level of accountability. The Code also introduces the creation of a Code Compliance Committee, which is intended to investigate potential significant breaches. The majority of the Code Compliance Committee is set to be industry experts. The Code is also designed to cope with events similar to the Christchurch earthquake, by taking emergency situations into account and requiring insurers to prioritise the vulnerable.

ICNZ has stated it is aware that these changes demand significant system changes, and has imposed an implementation date of 16 January 2016 to allow for modifications to be made and tested.

The new Fair Insurance Code can be accessed here.

Progress of legislation

New Bills

Appropriation (2013/14 Confirmation and Validation) Bill
This Bill, introduced on 18 February 2014, seeks to confirm the Public Finance (Transfers Between Outputs) Order 2014, which was made under section 26A of the Public Finance Act 1989. The Public Finance (Transfers Between Outputs) Order 2014 directs amounts appropriated for an output expense appropriation in a Vote to be transferred to another output expense appropriation in that Vote. The output expense transfers authorised under this Order include transfers for Vote Arts, Culture and Heritage; Vote Defence; Vote Defence Force; Vote Health; Vote Police; Vote Primary Industries; and Vote Social Development.


Bills awaiting first reading

Coroners Amendment Bill
Drug and Alcohol Testing of Community-based Offenders and Bailees Legislation Bill
Education (Breakfast and Lunch Programmes in Schools) Amendment Bill
Education (Food in Schools) Amendment Bill
Electoral (Adjustment of Thresholds) Amendment Bill
Electronic Data Safety Bill
Gambling Amendment Bill (No 2)
Healthy Homes Guarantee Bill
Land Transport (Safer Alcohol Limits for Driving) Amendment Bill
Legislation Amendment Bill
Local Government (Auckland Council) Amendment Bill (No 3)
Ngā Rohe Moana o Ngā Hapū o Ngāti Porou Bill
Overseas Investment (Owning our Own Rural Land) Amendment Bill
Radiation Safety Bill
SuperGold Health Check Bill
Underground Coal Mining Safety Bill


Bills before Select Committee

Submissions open

There are currently no Bills open for submission.


Submissions closed

Bill

Select Committee

Report Due (2015)

Arts Centre of Christchurch Trust Bill

Local Government and Environment

30 March

Building (Earthquake-prone Buildings) Amendment Bill

Local Government and Environment

30 March

Christchurch City Council (Rates Validation) Bill

Local Government and Environment

30 March

Environmental Reporting Bill

Local Government and Environment

30 March

Hawke's Bay Regional Planning Committee Bill

Māori Affairs

4 May

Health (Protection) Amendment Bill

Health

6 May

Health and Safety Reform Bill

Transport and Industrial Relations

30 March

Manukau City Council (Regulation of Prostitution in Specified Places) Bill

Local Government and Environment

30 March (interim report here)

Māori Language (Te Reo Māori) Bill

Māori Affairs

30 March

Organised Crime and Anti-corruption Legislation Bill

Law and Order

4 May

Policing (Cost Recovery) Amendment Bill

Law and Order

4 May

Regulatory Standards Bill

Commerce

30 March

Social Assistance (Portability to Cook Islands, Niue, and Tokelau) Bill

Social Services

4 May

Standards and Accreditation Bill

Commerce

31 March

Taxation (KiwiSaver HomeStart and Remedial Matters) Bill

Finance and Expenditure

28 April

Te Hiku Claims Settlement Bill

Maori Affairs

4 May

Te Kawerau ā Maki Claims Settlement Bill

Maori Affairs

4 May

Waitangi National Trust Board Amendment Bill

Māori Affairs

30 March

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.

Defence Amendment Bill
Harmful Digital Communications Bill
Housing Corporation Amendment Bill
Human Rights Amendment Bill
Judicature Modernisation Bill
Land Transport (Admissibility of Evidential Breath Tests) Amendment Bill
New Zealand Superannuation and Retirement Income Amendment Bill
Objectionable Publications and Indecency Legislation Bill
Public Health Bill
Radio New Zealand Amendment Bill
Register of Pecuniary Interests of Judges Bill
Reserves and Other Lands Disposal Bill
Smoke-free Environments (Tobacco Plain Packaging) Amendment Bill
Social Security Amendment Bill (No 3)
Social Security (Clothing Allowances for Orphans and Unsupported Children) Amendment Bill
Spending Cap (People’s Veto) Bill
Statutes Amendment Bill (No 4)
Taxation (Income-sharing Tax Credit) Bill


Bills awaiting third reading

Animal Welfare Amendment Bill
Commerce (Cartels and Other Matters) Amendment Bill
Construction Contracts Amendment Bill
Education Amendment Bill (No 2)
Energy (Fuels, Levies, and References) Amendment Bill
Gambling Amendment Bill (No 3)
Immigration Amendment Bill (No 2)
Insolvency Practitioners Bill
Natural Health and Supplementary Products Bill (formerly the Natural Health Products Bill)
Parental Leave and Employment Protection (Six Months Paid Leave) Amendment Bill
Parole Amendment Bill


Acts awaiting assent

Countering Terrorist Fighters Legislation Bill


Acts assented

Education Amendment Act 2015
This Act amends the Education Act 1989, particularly in relation to professional regulation of the education profession. The Act revamps the regulatory framework governing tertiary institutions, private training establishments, the enrolment of international students and the New Zealand Qualifications Authority. The Act also inserts Parts 31 and 32 into the principal Act that deal with Teacher registration (including new restrictions on the appointment and employment of teaching staff) and the establishment of the Education Council of Aotearoa New Zealand (replacing the New Zealand Teachers’ Council). The majority of the Act will come into force on 12 February 2015, with all remaining provisions commencing no later than 1 September 2016.


Legislative instruments

Big Wednesday Amendment Rules 2014
Biosecurity (Readiness and Response – Kiwifruit Levy) Order 2015
Bullseye Amendment Rules 2014
Corrections (Fenton Street (Rotorua) Police Jail) Notice 2014
Employment Relations Authority Amendment Regulations 2015
Fisheries (High Seas Fishing Notifications – Commission for the Conservation of Antarctic Marine Living Resources) Amendment Notice (No 2) 2014
Employment Relations (Prescribed Matters) Amendment Regulations 2015
Fisheries (High Seas Fishing Notifications – Commission for the Conservation of Southern Bluefin Tuna) Amendment Notice (No 2) 2014
Fisheries (High Seas Fishing Notifications: Western and Central Pacific Fisheries Commission) Amendment Notice 2015
Fisheries (Notification of Tangata Tiaki/Kaitiaki for Moeraki Mātaitai Reserve) Notice 2014
Fisheries (Notification of Te Ngāi Tūāhuriri Rūnanga Tangata Tiaki/Kaitiaki) Notice 2014
Fisheries (Notification of Waihōpai Rūnaka Tangata Tiaki/Kaitiaki) Notice 2014
Governor-General (Salary) Determination (No 2) 2014
Health Practitioners (Protected Quality Assurance Activity – Compass Health) Notice 2015
Health Practitioners (Quality Assurance Activity – Pegasus Health (Charitable) Limited) Notice 2015
Health Practitioners (Quality Assurance Activity – Records Review Study) Notice 2015
Housing Accords and Special Housing Areas (Auckland – New January 2015 Areas) Order 2015
Housing Accords and Special Housing Areas (Tauranga City) Order 2015
Judicial Salaries and Allowances Determination 2015
Keno Amendment Rules 2014
Land Transport (Breath Tests) Notice 2015
Land Transport (Certificates of Compliance for Evidential Breath-Testing Device (Dräger 7510NZ)) Notice 2015
Land Transport (Certificates of Compliance for Evidential Breath-Testing Device (Dräger 9510NZ)) Amendment Notice 2015
Land Transport (Certificates of Compliance for Evidential Breath-Testing Device (Intoxilyzer 5000)) Revocation Notice 2015
Land Transport (Certificates of Compliance for Evidential Breath-Testing Device (Seres)) Revocation Notice 2015
Local Government Elected Members (2014/15) (Certain Local Authorities) Determination 2014 Amendment Determination 2014  
Lotto Amendment Rules 2014
Medicines Amendment Regulations 2015
Non-bank Deposit Takers (Declared-out Entities) Regulations 2015
Securities Act (Banks’ Regulatory Capital) Exemption Amendment Notice 2014
Takeovers Code (Trustees of Family Trusts) Exemption Amendment Notice 2015

In the week ahead

What’s coming up in the House

The House began its first sitting week for 2015 on 10 February. It will sit again on 17 February for another two weeks before a week-long recess in the beginning of March. The Parliamentary Calendar and the House’s Sitting Programme can be found here.

For the week of 17 February the Government is looking to progress the Debate on the Prime Minister’s Statement and a number of pieces of legislation on the Order Paper including the Gambling Amendment Bill (No 2), the Parole Amendment Bill, and the Energy (Fuels, Levies and References) Amendment Bill.

In committee

Recent Committee meetings

Select committees resumed business on 9 February.  

The Finance and Expenditure Committee considered the Taxation (KiwiSaver HomeStart and Remedial Matters) Bill, was briefed by the Treasury on the Government's financial cycle, and considered the Budget Policy Statement for 2015. 

The Foreign Affairs, Defence and Trade Committee examined a number of international treaties. These included the 2003 Protocol to the Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1992 and the First Protocol to amend the Agreement establishing the ASEAN-Australia-New Zealand Free Trade Area. It was also briefed on the implications under international law of the use of unmanned aerial vehicles and other robotic devices in military operations.

The Regulations Review Committee continued its investigations into the scrutiny of regulations and into regulation-making powers in bills.

Call for submissions on the Inquiry into the 2014 general election
Public submissions are now being invited on the Inquiry into the 2014 general election. By convention, after every general election, a select committee inquiry is conducted into the legal and administrative aspects of that election. The Inquiry will be conducted by the Justice and Electoral Committee, chaired by National Party member, Hon Jacqui Dean. The closing date for submissions is 31 March 2015. Further information on making a submission can be found here.

Speeches of note

RBNZ Governor speaks at Canterbury Employers Chamber of Commerce

On 4 February the Reserve Bank Governor delivered a speech on the outlook for the New Zealand economy to the Canterbury Employers’ Chamber of Commerce in Christchurch.

In summary, the Governor stated that the New Zealand economy is performing well in many respects and the prospects are good for continued steady growth, falling employment, and low inflation. However, the risks and uncertainties around the global economy were becoming more complex, and this presented considerable challenges for New Zealand enterprises and the Reserve Bank.

The Governor’s key points can be summarised as follows:

Official cash rate
The official cash rate (OCR), currently at 3.5%, was likely to stay at this percentage for some time. A period of OCR stability was the most prudent option in the current economic situation, and it would take quite a change in economic conditions to trigger a lower rate. In any event, retail banks were taking advantage of lower global rates by offering cheaper loans.

Economic risks and uncertainties
The Reserve Bank expected above-average economic growth in New Zealand’s trading partners this year. However, there were more risks and uncertainties as growth rates diverge between countries, central banks continue significant quantitative easing, and consumer price inflation falls into negative territory in several countries. Financial markets have had to respond to several developments, including the Swiss National Bank abandoning its exchange rate cap, interest rate cuts by several central banks, and uncertainty following the Greek election.

The main risks and uncertainties related to the Chinese economy, and four key prices – dairy prices, oil prices, house prices, and the exchange rate.

Dairy industry
An expected $6 million drop in dairy farm incomes would be cushioned through income swings, including last year’s record pay-out. Spending could slow more sharply in 2016. A further risk to farm incomes stemmed from dry weather in several of New Zealand’s dairy regions.

Oil prices
Oil prices had fallen 58% since the end of June 2014. If the main driver of the fall in oil prices was weakening global demand, New Zealand’s export incomes could expect to continue to be weak.

House prices
The Reserve Bank’s concern about house price inflation was based on the risk it poses to financial stability and the broader economy. Its focus was mainly on the Auckland and Christchurch markets, where housing shortages were greatest, and where market pressures were the most intense.

Inflation
Annual CPI inflation was expected to be below the Reserve Bank’s target band, and could become negative for a period during 2015, as the direct and indirect impacts of falling oil prices feed through the economy. The Bank expected inflation to move gradually back towards the middle of the 1 to 3% target band.

The Governor concluded that the drivers of growth look sustainable, particularly in light of the increase in productive capacity that had occurred in recent years. Monetary policy remained in a strong position to continue supporting ongoing low inflationary growth in the New Zealand economy.

The full speech can be found here.

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 (2014)

Alpine Export NZ Limited

Pouch, stand up type, resealable, with de-metallised see through window, containing the following layers: polyethylene terephthalate (PET), and printed linear low density polyethylene (LLDPE), for the period 1 January 2015 to 31 December 2015

3923.21.15

3 March

In consultation

New

Who

What

By when (2014)

Commerce Commission

Unbundled Copper Local Loop and Unbundled Bitstream Access services final pricing principle

20 February

Backdating the final prices that Chorus charges for its local copper lines and broadband service

20 February

Department of Conservation

Ruahine land revocation proposal

3 March

Intention to grant a lease concession to Great Barrier Island Community Health Trust

18 March

Proposal to dispose of conservation land at Waimunga

30 March

Electricity Authority

Proposed amendment to the HHR (non-half hour to half hour) switching process for AMI switch event meter readings

24 February

Review of participant audit regime

3 March

Environmental Protection Authority

Classification system, labelling, safety data sheets and packaging

20 February

Application for the fungicide Prolectus

25 February

Application to release privet lace bug as a biological control agent for the weed privet

4 March

Financial Markets Authority

Proposed additional standard conditions for Authorised Financial Advisers

27 February

Food Standards Australia New Zealand

Citric and lactic acids as food additives in beer; voluntarily addition of vitamin D to breakfast cereals; use of two new enzymes (A1098 – Chymotrypsin & A1099 – Trypsin) to produce protein ingredients for food and beverages; proposed approach to the next phase of a review of microbiological limits in the Food Standards Code

27 February

Voluntary fortification of breakfast cereal with Vitamin D – Technological and nutition risk assessment

27 February

Inland Revenue Department

Income tax – depreciation rate for gas detectors

13 March

Draft provisional depreciation determination: Hydroelectric powerhouses

20 March

Draft operational statement: GST and the costs of sale associated with mortgagee sales

27 March

Medsafe

draft Uniform Recall Procedure for Medicines and Medical Devices (Recall Code)

27 February

Ministry of Justice

draft report on New Zealand’s performance under the International Covenant on Civil and Political Rights

19 February

Ministry for Primary Industries

Proposed Revisions to the Cost Recovery Regimes for Biosecurity and Food Safety

20 February

Proposals for regulations under the Food Act 2014

20 February (cost recovery proposals)

31 March (remaining proposals)

Draft Import Health Standard for Fresh Zucchini and Scallopini (Cucurbita pepo) from the Kingdom of Tonga

26 February

Proposed new Animal Products Specifications for Laboratories Notice for the Dairy, LAS and ELP laboratory programmes.

27 February

Maori Commercial Aquaculture Settlement; methodology report; peer review report

Ongoing

NZ Transport Agency / Auckland Transport

State Highway Safe Network Activity Manual

27 February

Improving transport connections in the Onehunga – Penrose area and reliability of bus services between Mangere, Otahuhu and Sylvia Park

Ongoing

PHARMAC

Proposal to list a range of wound care products supplied by ConvaTec (New Zealand) Limited

20 February

Proposal to list various respiratory aerosol inhalers supplied by Rex Medical Ltd

2 March

Regulations Review Committee (Parliament)

Inquiry into Parliament’s legislative response to future national emergencies

1 March

Standards New Zealand – Joint Standards

Freight containers Part 4: General purpose containers (ISO 1496-1:2013, MOD)

20 February

Lighting for roads and public spaces: Part 1.1: Vehicular traffic (Category V) lighting – Performance and design requirements; and
Part 3.1: Pedestrian area (Category P) lighting – Performance and design requirements

20 February

Maritime survivor locating systems (MSLS) Part 3: Maritime survivor locating devices (MSLD) – Operating on 156.575 MHz and/or 161.975 MHz/162.025 MHz (RTCM 11901.1:2012, MOD

20 February

Neutral links with tunnel terminals for the connection of copper conductors  – Requirements for brass neutral links with ratings up to and including 125 A

20 February

Plywood – Structural Part 0: Specifications

20 February

Safety of machinery Part 3612: Conveyors – Chain conveyors and unit handling conveyors

20 February

Methods for sampling and analysis of ambient air:
Method 9.6: Determination of suspended particulate matter – PM10 high volume sampler with size selective inlet – Gravimetric method (Revision of AS/NZS 3580.9.6:2003); and
 Method 12.1: Determination of light scattering – Integrating nephelometer method (Revision of AS/NZS 3580.12.1:2001

23 March

Amendment 2 to AS/NZS 3111:2009 Approval and test specification – Miniature overcurrent circuit-breakers

27 March

Methods for sampling and analysis of ambient air Method 9.3: Determination of suspended particulate matter – Total suspended particulate matter (TSP) – High volume sampler gravimetric method (Revision of AS/NZS 3580.9.3:2003)

27 March

Plastic monobloc chairs – Determination of strength and durability, stability, UV and weathering, and ignitability (Revision of AS/NZS 3813:1998)

27 March

Analogue speech (angle modulated) equipment operating in land mobile and fixed services bands in the frequency range 29.7 MHz to 1 GHz (Revision of AS/NZS 4295:2004)

27 March

Coaxial cable and optical fibre systems for the RF distribution of digital television, radio and in-house analog television signals in single and multiple dwelling installations (Revision of AS/NZS 1367:2007)

3 April

Freight containers:
Part 2: Terminology (ISO 830:1999, MOD) (Revision of AS/NZS 3711.2:1993);
Part 3: Corner fittings (ISO 1161:1984, MOD) (Revision of AS/NZS 3711.3:1993)

13 April

Approval and test specification – Plugs and socketoutlets for stationary appliances (Revision of AS/NZS 3131:2001)

15 April

The Treasury

Suggestions for two new inquiry topics that could be undertaken by the New Zealand Productivity Commission in 2015

27 February

Current

Who

What

By when (2014)

Commerce Commission

Transpower TPM operational review initial consultation paper

Ongoing

Department of Conservation

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

Ongoing

Ruahine land revocation proposal; DOC’s submission to the Minister of Conservation; Smedley exchange block ecological survey; Eological effects on DOC managed land

3 March 2015

Environmental Protection Authority

Application from Zelam Ltd for release of the biopesticide Blossom Protect

17 February 2015

Classification system, labelling, safety data sheets and packaging

20 February 2015

Proposals for four Environmental Protection Authority Notices – as part of implementation of new amendments to Hazardous Substances and New Organisms Act 1996

20 February 2015

Financial Markets Authority

Business Growth Agenda

Ongoing

Ministry of Business, Innovation and Employment

Submissions on property regulations and local rules that are irrelevant or unnecessary

Ongoing

Productivity Commission

Inquiry into the way local authorities regulate to make land available for housing

Ongoing


This publication is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice. If you require any advice or further information on the subject matter of this newsletter, please contact the partner/solicitor in the firm who normally advises you, or alternatively contact one of the partners listed below.

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