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Watching Brief – June 2016

Home Insights Watching Brief – June 2016

Matter of opinion

Does a Memorandum Understanding Make?

Only a week since the Government’s workmanlike budget and Labour and the Greens have reclaimed headlines with the announcement of their formal Memorandum of Understanding (MoU). This arrangement, while stated as formal, is not contemplated by any constitutional conventions or legal requirements. Nevertheless it represents a significant gear shift in our political landscape, this being the first time two major parties have openly sought to work together leading up to (as opposed to in the wake of) an election.

While born out of necessity, the move signals a maturing of our MMP system and a further step away from our previous two-party system. Similar approaches are relatively commonplace in Europe and are well understood by their voting public. If successful here, it could lead to a more modern and sophisticated political environment, where differences in party policies can work alongside a set of common objectives.

The question is whether it will work in New Zealand’s political context. The move is not surprising, recognising the reality that Labour can’t be a government without the Greens. But the risks of taking a joint approach now are considerable nevertheless.

On the plus side, the MoU will allow Labour to focus on social issues (where Labour is viewed as less extreme) and the Greens to focus on the environment in the build up to an election – both are areas where National has key vulnerabilities. It also moves to combat National’s tactics at the last election which painted a Labour Green (and Dotcom, NZ First) coalition as a government of crazies. By working together now, Labour and the Greens can demonstrate that they are a credible government in waiting.

The MoU also reflects the reality that Winston Peters is more likely to support National at the next election if National is the party with the highest number of votes – which they will be. Winston Peters has previously asserted that the party with the most seats should try to form the Government and that he would support the party with the most seats (as if citing a constitutional convention – it’s not). Further, at this stage in his career, Winston will be considering legacy and reputation and a full career circle ‘returning home’ would be a fitting coda. National are the most natural fit in this regard. In addition, there is his historic antipathy towards the Greens and confirmation this week that he would refuse to play “third fiddle”.

Accordingly, while Winston can be predictably unpredictable – or more likely the reverse – claims that he will be a king maker are overstated. Labour would be unwise to rely on NZ First’s support in the next election. Building an alternative government with the Greens is the realistic proposition – but will it help to present a joint platform in advance?

In terms of risks, the MoU will mean nothing if it fails to grow the votes of both Labour and the Greens away from, primarily, National and NZ First. At an electorate level, election coordination – a key plank of the MoU – is likely to result in candidates stepping aside to enhance the prospects of another party’s candidate. The impact of this strategic voting shouldn’t be underestimated – its effect has been proven time and again in Epsom. Moreover, Peter Dunne would have been out last election if a simple directive had been given to Green voters to vote for the Labour candidate in his constituency.

However, it is the all-important party vote that needs to be grown, and overall, this is where the new strategy could fail. Some in Labour are conscious that while the Greens have taken great strides in recent years – mostly due to the hard work of Russell Norman – in becoming more mainstream in their economic approach, a significant proportion of the electorate still see little appeal in the Green party. As much is reflected in the Greens’ pitch at the last election to only gain 15 per cent of the vote (which they failed to do). This reticence was evident the day after the MoU was announced, with Damien O’Connor – probably Labour’s most conservative MP – refusing to fully endorse the agreement, citing his West Coast constituents’ reliance on mining. The result, some fear, is that conservative Labour voters could be driven to NZ First or National.

In terms of attracting soft National and NZ First voters, closer collaboration with the Greens may again be off-putting.

For the Greens, the close association with Labour may compromise its attempts to engage young voters and those less likely to vote, known as the ‘missing million’. These campaigns could be compromised by a new perception that the Greens are ‘part of the system’, rather than the happy outsiders that they have been in the past. While New Zealand’s anti-establishment fever has not hit the level captured by Sanders, the Greens have formerly positioned themselves well as the establishment alternative.

There is, therefore, a risk of mutual taint in this agreement – for Labour and the Greens. Winston Peters could be the key beneficiary.

With no parallel universe to judge, we will never know if the MoU is the right move for both parties. But given current polling, the case for taking an alternative approach is arguably compelling. Success may depend, in part, on whether more New Zealanders are driven to vote on social inequity and climate change issues. National has struggled to respond to the recent media focus on homelessness. In relation to the latter, scientists are referring to a ‘climate emergency’ following unprecedented global temperature increases for seven months running, and by the biggest margins over the last three. These issues have not been game changers in the past, but could grow in importance over the next year in terms of public awareness and concern.


In politics

Customs and Excise Act Review – a quiet cog that keeps the economy ticking

Customs Minister Nicky Wagner has announced a series of proposals aimed at making the Customs and Excise Act 1966 (Act) more efficient and simpler for businesses that import and export. It is a good example of Government action that can have a significant impact on businesses yet falls under the radar – in many respects a far greater impact than the headline-hogging soundbites often pushed by politicians.

In particular, the beer and spirits industries will welcome the decision to address a 20-year-old alcohol policy which only gave wineries the freedom to store wine in off-site storage areas for as long as they need to without paying tax. Previously, when beer or spirits were removed from a manufacturing site they immediately incurred excise tax, unless it was stored in a customs controlled area. This meant that breweries and spirits producers had to pay tax upfront before selling goods, which impeded cashflow. The Act will now be expanded to mean all alcohol products can benefit from the off-site storage regime.

Information sharing is another proposal that has the potential to significantly impact some industries. Where Customs requests on-going disclosure of information from a private corporation, the proposals outline that Customs may enter into an arrangement if it considers this to be the most effective way to share information. Such arrangements must include a description of the information being disclosed, the purpose of the information, specific requirements for storage and possible subsequent disposal, and prescribe who may access the information. The strict criteria around information sharing should result in fewer costly and disruptive requests being made to businesses.

During consultation on Customs’ 2015 discussion paper, business stakeholders expressed a preference that information not be disclosed without the consent of the provider of that information. In response, Cabinet has proposed that Customs must consult with the Privacy Commissioner and any organisation that will be affected by the proposed disclosure. The Cabinet paper sends a clear signal to Customs not to do so where a business has strong concerns about disclosure, as this would ‘risk damaging the trust and confidence’ in Customs.

While these amendments are hardly seen to be vote-winners or solutions to Auckland’s housing crisis, they are important to the mechanics of our import and export industries. Minister Wagner expects to introduce a Bill to Parliament later this year.


In the news

Government announces programme to boost electric vehicle uptake

On 5 May, the Transport Minister, Hon Simon Bridges, announced a package of incentives to increase the uptake of Electric Vehicles (EVs) in New Zealand. The package aims to develop the EV market, with a target of doubling the number of in New Zealand each year to reach 64,000 by 2021. This figure represents two percent of New Zealand’s current light vehicle fleet.

The incentives are designed to overcome current barriers relating to EV uptake including: the limited selection of EV models available; a lack of charging stations; and limited awareness surrounding EVs, which have led to a slower than anticipated uptake of EVs.

The package includes:

  • extending the current road user charge exemption on light EVs until EVs make up two percent of New Zealand’s light vehicle fleet (the value of the exemption to a typical vehicle owner is approximately $600 per year);
  • introducing a new exemption for heavy EVs until two percent of the heavy EV fleet is electric, or 31 December 2025, whichever is reached first;
  • an MBIE-led coordination of activities to support the development and roll-out of public charging infrastructure;
  • an EV promotion campaign run by the Energy Efficiency and Conservation Authority;
  • a contestable fund of up to $6m per year for EV promotion, accessible by businesses, non-profit organisations, individuals, and local governments;
  • a review of tax depreciation rates and the method of calculating fringe benefit tax, to ensure that EVs are not unfairly disadvantaged. Additionally, a review of ACC levies for plug-in hybrid vehicles has been requested; and
  • establishing an Electric Vehicles Leadership Group that will span businesses and local and central government.

The incentives apply to battery electric vehicles (BEVs) or plug-in hybrid electric vehicles (PHEVs), rather than hybrids such as the Toyota Prius and Honda Civic. These cars are not considered electric vehicles, as they are not charged by plugging in to a power point. The package is part of the Government's program that seeks to reduce greenhouse gas emissions from the transport sector.

The Minister’s announcement can be found here. Further information, including the complete package, is available here.


Law Commission President announced

On 18 May, the Justice Minister, Hon Amy Adams, announced that the Hon Douglas White QC has been appointed as the next President of the Law Commission.

Hon Douglas White started his career as a corporate litigator before joining the independent bar in 1986 and was made a Queen’s Counsel in 1988. As a barrister, he continued to specialise in civil disputes, and also conducted inquiries on behalf of the State Services Commissioner. Between 1990 and 1999 he was Pro-Chancellor and Chancellor of Victoria University, and was recently appointed a Judge of the Cook Islands Court of Appeal.

The Law Commission is an independent crown entity established under the Law Commission Act 1985 to systematically review, reform, and develop the law in New Zealand. As its President, Hon Douglas White will lead the Commission in investigating and reporting to Government Ministers on improvements to specific areas of law, and inform the public and encourage debate on legal issues.

Sir Grant Hammond, the previous President, has stepped down after spending six years in the role. Hon Douglas White has been a part-time Commissioner since February and his appointment takes effect immediately.

The Minister’s announcement is here.


New State Services Commissioner appointed

On 3 May, the Prime Minister announced that Peter Hughes has been appointed as the new State Services Commissioner for a five year term beginning in early July. The Commissioner is appointed under the State Sector Act 1988 (Act) by the Governor-General on the recommendation of the Prime Minister.

The State Services Commission has a variety of roles in the administration of the public sector including oversight of the implementation of key legislation, such as the Crown Entities Act 2004, and is responsible for ensuring that the State Sector system maintains appropriate standards of transparency and neutrality, meets good employer obligations, and generally behaves in a civic-minded and efficient way. As State Services Commissioner, Mr Hughes is required by section 6 of the Act to provide leadership and oversight of the Commission, and is responsible for:

  • appointing, employing and reviewing the performance of Public Service chief executives;
  • reviewing the performance of government agencies;
  • reviewing and recommending improvements to the State Sector system; and
  • exercising such other functions with respect to the administration of the Public Service as the Prime Minister directs.

Mr Hughes previously held positions in a number of government departments, including roles as Chief Executive of the Health Funding Authority, Secretary for Internal Affairs, Chief Executive and Secretary of Education, and Chief Executive of the Ministry of Social Development – a position he held for 10 years. Mr Hughes has also held teaching positions at Victoria University. Mr Hughes was made a companion of the New Zealand Order of Merit in 2012 for services to the State and was voted Wellingtonian of the Year in the Government category at an awards ceremony in 2013.

Mr Hughes replaces Ian Rennie, who has held the position since 2008, and whose term ends in June.

The Prime Minister’s full announcement is here.  


Reserve Bank reviews its publication of submissions

The Reserve Bank (Bank) is to reconsider its approach to the publication of submissions, following the release of a consultation paper on the Bank’s Review of Default Option for Publication of Submissions.

Under its current practice, the Bank does not routinely publish individual submissions it receives in response to public consultations. Instead, summaries of responses received in submissions are published once a final policy decision is reached. However, the consultation paper proposes making routine publication of submissions the Bank’s default option, which would bring the Bank into line with other government entities, such as the Ministry of Business, Innovation, and Employment (MBIE) and the Financial Markets Authority (FMA), who publish all submissions received during consultation, except where subject to confidentiality.

The Bank’s current approach is largely dictated by legislative constraints, specifically: section 105 of the Reserve Bank of New Zealand Act 1989; sections 136-137 of the Insurance (Prudential Supervision) Act 2010, and section 54 of the Non-Bank Deposit Takers Act 2013, which make disclosure of submissions by default an offence.

Under this regime, individual submissions may only be published where a valid exception applies, including where the submitter gives their consent; the information is non-attributable; publication is for the purposes of the functions and powers of the Reserve Bank; publication is to overseas authorities with similar functions to the Reserve Bank, or to a person with a ‘proper interest’. Submissions may also be released in response to an Official Information Act 1982 (OIA) request, unless one of the exemptions set out in the OIA applies.

The consultation paper follows feedback the Bank received in its Regulatory Stocktake suggesting that the Bank should change its approach to the publication of submissions. As set out in the paper, the Bank is now consulting on two options for moving forward: to continue with its current practice, or to seek explicit consent from submitters whether the Bank may publish all or part of the submission.

The Bank is currently accepting submissions on the issue and proposed options, a summary of which will be released with the Bank’s policy decision on the consultation, in accordance with its current default option. The consultation period runs until 4 August 2016.

The Bank’s consultation paper, submission form, and information on how to submit on the review can be found here.


Revision Bill set to consolidate contractual and commercial legislation

The first bill on the Government’s three-year Revision Bill programme has been introduced. The Contract and Commercial Law Bill (Commercial Bill), which has been prepared under subpart 3 of Part 2 of the Legislation Act 2012, will consolidate, in a modern form, the following acts:

  • Carriage of Goods Act 1979;
  • Contracts (Privity) Act 1982;
  • Contractual Mistakes Act 1977;
  • Contractual Remedies Act 1979;
  • Electronic Transactions Act 2002;
  • Frustrated Contracts Act 1944;
  • Illegal Contracts Act 1970;
  • Mercantile Law Act 1908 (other than Part 5);
  • Minors’ Contracts Act 1969;
  • Sale of Goods Act 1908; and
  • Sales of Goods (United Nations Convention) Act 1994.

These largely older statutes are (in parts) expressed in outdated language and contain a number of provisions which have been repealed. The Commercial Bill will specifically address these aspects with the goal of making the acts more accessible and thereby reducing the regulatory costs for businesses and users. The Commercial Bill is separated into six parts and includes core sections covering contracts legislation, sale of goods, electronic transactions and other commercial matters (including carriage of goods and mercantile agents).

A number of minor amendments will also be included in the Commercial Bill to clarify Parliament’s intent and reconcile inconsistencies that were identified when it was being prepared. Except for these changes, the effect of the law will not change – a certificate to this effect was issued under the Legislation Act on 2 May 2016 and was signed by a retired High Court Judge, the President of the Law Commission, the Solicitor General and the Chief Parliamentary Counsel.

As a Revision Bill, the Commercial Bill will go through the House under a new streamlined process set out in Standing Order 271 designed to ensure the Government’s time is not unduly occupied while ensuring Revision Bills are properly scrutinised. Under this process, the Commercial Bill will be read for a first time without debate, before being referred to the Justice and Electoral Committee for consideration. Following the Committee’s report there is an opportunity for debate at the second reading (and, in limited circumstances, if and when a Committee of the Whole House is resolved), before going to a third reading without debate.

A copy of the bill can be found here.


Treasury publishes Major Projects Performance Report

On 1 June, Treasury released its Major Projects Performance Report (Report) for the period November 2015 – February 2016, months earlier than initially signalled. While previous reports of this kind have been released as much as four months after their consideration by Cabinet, Finance Minister, Hon Bill English, explained that the Report’s early release was designed to enable the public to see the projects’ progress in real time.

The Report is the third in the series and provides an update on the Government's 43 largest projects. It outlines how ‘on track’ the projects are to deliver their planned benefits on time and within budget. The projects covered in the Report span 22 Government agencies, and have a total value of over $20 billion – 32 per cent of the Government’s total investment portfolio.

The Report ranks the 43 projects on a five-point colour scale ranging from Green (where successful delivery of the project against budget, schedule and benefits, is highly likely), through to Red (where there are major issues with the project which cannot be addressed without corresponding changes being made).

84 per cent of projects in the report are ranked Amber or better, while six projects, including the Customs Joint Border Management System Programme, the Ministry of Social Development Simplification Programme, and the Ministry of Health Payments Systems Project are ranked Amber / Red or Red. The Christchurch Central Delivery Programme, which includes 17 rebuild related projects, is included in the Amber / Red category – an improvement on its Red ranking in the previous Report.

The full report and rankings are available here. The Ministers’ statement is here.


Progress of legislation

New Bills

Appropriation (2015/16 Supplementary Estimates) Bill
Type of Bill: Government
Member in Charge: Hon Bill English
This Bill seeks parliamentary authorisation of the individual appropriations and changes in The Supplementary Estimates of Appropriations for the Government of New Zealand for the year ending 30 June 2016, presented to the House as part of the Budget 2016 process on 26 May. This Bill would enable the Government to incur expenses and capital expenditure set out in Schedule 1 and 2 of the Bill.

Appropriation (2016/2017 Estimates) Bill
Type of Bill: Government
Member in Charge: Hon Bill English
This Bill seeks to legislate the terms of the Budget 2016 and seeks parliamentary approval of the individual appropriations set out in the Budget documentation: The Estimates of Appropriations for the Government of New Zealand for the year ending 30 June 2017. The individual appropriations are set out in Schedule 1 and 2 of the Bill.

Children, Young Persons, and Their Families (Advocacy, Workforce, and Age Settings) Amendment Bill
Type of Bill: Government
Member in Charge: Hon Anne Tolley
This Bill seeks to amend the Children, Young Persons, and Their Families Act 1989 as part of an overhaul of the State care system. If enacted, the Bill would extend the definition of a ‘young person’ in the principal Act to include 17-year-olds, which would in turn broaden the State’s responsibility to care and protect vulnerable persons up to this age. The Bill also intends to require greater participation of children and young people in the decision making processes that affect them. The Bill also seeks to place a new duty on the chief executive of the department administering the Act to support the establishment of an independent youth advocacy service (currently being developed outside of the Act in partnership with the philanthropic sector). Further, the Bill would allow a wider range of professionals to perform more extensive functions under the principal Act.

Climate Change Response (Removal of Transitional Measure) Amendment Bill
Type of Bill: Government
Member in Charge: Hon Paula Bennett
This Bill has been introduced under urgency and intends to amend the Climate Change Response Act 2002 by phasing out the transitional one-for-two surrender obligation from the Emissions Trading Scheme. Under this current rule, non-forestry worker participants in the Emissions Trading Scheme are only obligated to submit one emissions unit for every two tonnes of carbon dioxide equivalent of greenhouse gas they omit. When introduced in 2009, this rule was only intended to be a transitional measure to moderate the initial impacts of the scheme on business owners. The Bill seeks to phase out the one-for-two rule from January 2017 with full obligations for non-forestry workers becoming mandatory from January 2019.

Contract Commercial Law Bill
Type of Bill: Government
Member in Charge: Hon Christopher Finlayson
This Revision Bill aims to re-enact and modernise current contracts and commercial transactions legislation by consolidating eleven pieces of legislation into one. The Bill seeks to consolidate the:

  • Carriage of Goods Act 1979;
  • Contracts (Privity) Act 1982;
  • Contractual Mistakes Act 1977;
  • Contractual Remedies Act 1979;
  • Electronic Transactions Act 2002;
  • Frustrated Contracts Act 1944;
  • Illegal Contracts Act 1970;
  • Mercantile Law Act 1908;
  • Minors’ Contracts Act 1969;
  • Sale of Goods Act 1908; and
  • Sale of Goods (United Nations Convention) Act 1994.

While this Bill seeks to revise, renumber, combine, and rearrange legislation, it does not make any substantive policy changes to the current legislation or change the effect of the law.  

Customs and Excise (Tobacco Products – Budget Measures) Amendment Bill
Type of Bill: Government
Member in Charge: Hon Peseta Sam Lotu-liga
This Bill was introduced under urgency and seeks to amend the Customs and Excise Act 1996. The Bill intends to impose four cumulative 10 per cent increases to the duties on all tobacco products. The first increase would occur on 1 January 2017 to those duties in force at 31 December 2016, with the final increase occurring on 1 January 2020 to those duties in force at 31 December 2019. Through these tax increases, the Bill aims to raise the price of tobacco products and deter New Zealanders from purchasing them. This is intended as a health measure and is part of a suite of activities aimed at making New Zealand smoke-free by 2025.

Maritime Crimes Amendment Bill
Type of Bill: Government
Member in Charge: Hon Murray McCully
This Bill aims to amend the Maritime Crimes Act 1999 to reflect obligations under international protocols, specifically: the Protocol of 2005 to the Rome Convention for the Suppression of Unlawful Acts Against the Safety of Maritime Navigation and the Protocol of 2005 to the Rome Protocol for the Suppression of Unlawful Acts Against the Safety of Fixed Platforms Located on the Continental Shelf. The amendments in the Bill would allow New Zealand to ratify the 2005 Protocols. These changes are intended to tighten the maritime security framework established in the principal act by creating new offences, a maritime boarding regime, and clarifying officers’ powers when acting on offences in the principal act.  

Ngāi Te Rangi and Ngā Pōtiki Claims Settlement Bill
Type of Bill: Government
Member in Charge: Hon Christopher Finlayson
This Bill would give effect to the deed of settlement signed on 14 December 2014 by the Crown and Ngāi Te Rangi and Ngā Pōtiki, and provide for the final settlement of historical Treaty of Waitangi claims made by Ngāi Te Rangi and Ngā Pōtiki. The Bill seeks to formally record a Crown apology to Ngāi Te Rangi and Ngā Pōtiki and provides a range of cultural and commercial redress to the iwi. Cultural redress includes the vesting of two island reserves and statutory acknowledgments over several streams in the Tauranga area. Commercial redress includes $26.5 million for Ngāi Te Rangi and $3 million for Ngā Pōtiki, rights of first refusal, and the opportunity to purchase specified Crown properties.

Our Work Our Future Bill
Type of Bill: Member’s
Member in Charge: Andrew Little
This Bill aims to require the Ministry of Business, Innovation, and Employment to amend the Government Procurement Rules and Principles of Government Procurement, so that job creation and the overall benefit to New Zealand are determining factors in Government procurement decisions. The changes would also impose obligations on Government to design contracts in such a way to ensure that companies focused on job creation have a fair chance of winning them. The Bill would also require procurement decision makers to report on the value of contracts awarded on this criteria.

Rates Rebate (Retirement Village Residents) Amendment Bill
Type of Bill: Member’s
Member in Charge: Hon Ruth Dyson
This Bill seeks to address an alleged anomaly in the payment of rate rebates for residents of retirement villages. Residents of retirement villages, in most situations, pay rates indirectly (via the retirement village in which they live) rather than directly to their local authority. The Bill would recognise that residents in this situation would be entitled to apply for a tax rebate on their rates properties.

Taxation (Annual Rates for 2016-17, Closely Held Companies, and Related Matters) Bill
Type of Bill: Government
Member in Charge: Hon Michael Woodhouse
This omnibus bill intends to implement a suite of amendments across several taxation acts including the:

  • Income Tax Act 2007;
  • Tax Administration Act 1994;
  • Goods and Services Tax Act 1985;
  • Stamp and Cheque Duties Act 1971;
  • Student Loan Scheme Act 2011;
  • Income Tax Act 2004; and
  • Goods and Services Tax (Grants and Subsidies) Order 1992.

Among the range of changes the Bill would introduce is the setting of annual income tax for the 2016-17 tax year. In addition, changes proposed for closely held companies would simplify the rules and narrow the criteria for a company electing to become a look through company. The Bill also proposes to modify the non-resident withholding tax and approved issuer levy rules as they apply to interest paid on debt provided by non-residents. This is designed to provide consistency across transactions that are economically similar. Changes to the goods and services tax regime would also occur under the Bill. Under the proposed changes, a business would be able to recover GST incurred on goods and services purchased to raise capital. The Bill additionally seeks to introduce an alternative method to the current apportionment and adjustment method which would be available to businesses with a turnover likely to exceed $24 million in a 12 month period. The Bill also aims to adjust the current imputation credit regime to allow a loss company or another company in a commonly owned group to transfer imputation credits to a profit company in conjunction with a loss grouping transaction.

Te Awa Tupua (Whanganui River Claims Settlement) Bill
Type of Bill: Government
Member in Charge: Hon Christopher Finlayson
This Bill would give effect to the Whanganui River Deed of Settlement signed on 5 August 2014. The Deed settled the historical claims of Whanganui iwi in relation to the Whanganui River. The Bill would implement those parts of the Deed for which legislation is necessary. In addition to the Crown formally acknowledging past wrongs, the Bill aims to set up a legal framework for the Whanganui River as Te Pā Auroa nā Te Awa Tupua to give the Whanganui River its own legal personality. As a result, parts of the river would vest in itself rather than the Crown or iwi.

Trans-Pacific Partnership Agreement Amendment Bill
Type of Bill: Government
Member in Charge: Hon Todd McClay
This omnibus bill intends to amend legislation as part of the international free trade agreement known as the Trans-Pacific Partnership Agreement (TPPA). Specifically, the Bill would amend the:

  • Agricultural Compounds and Veterinary Medicines Act 1997;
  • Copyright Act 1994;
  • Customs and Excise Act 1996;
  • Dairy Industry Restructuring Act 2001;
  • Hazardous Substances and New Organisms Act 1996;
  • Legislation Act 2012;
  • Overseas Investment Act 2005;
  • Patents Act 2013;
  • Tariff Act 1988;
  • Trade Marks Act 2002; and
  • Wine Regulations 2006.

The proposed amendments would institute a broad policy objective of liberalising trade and investment between the 12 parties to the TPPA: New Zealand, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, Singapore, the United States, and Vietnam.


Bills awaiting first reading

Appropriation (2015/16 Supplementary Estimates) Bill
Contract and Commercial Law Bill
Consumer Guarantees (Removal of Unrelated Party Lender Responsibility) Amendment Bill
Customs and Excise (Prohibition of Imports Made by Slave Labour) Amendment Bill
Education (Charter Schools Abolition) Amendment Bill
Legislation Amendment Bill
Maritime Crimes Amendment Bill
Ngā Rohe Moana o Ngā Hapū o Ngāti Porou Bill
Overseas Investment (Protection of New Zealand Homebuyers) Amendment Bill
Public Works (Prohibition of Compulsory Acquisition of Māori Land) Amendment Bill
Rates Rebate (Retirement Village Residents) Amendment Bill
Taxation (Annual Rates for 2016-17, Closely Held Companies, and Related Matters) Bill
Trans-Pacific Partnership Agreement Amendment Bill


Bills before Select Committee

Submissions open

Bill

Select Committee

Closing date for Submissions (2016)

Healthy Homes Guarantee Bill (No 2)

Government Administration

23 June

Hineuru Claims Settlement Bill

Māori Affairs

24 September

Ngāi Te Rangi and Ngā Pōtiki Claims Settlement Bill

Māori Affairs

6 July

Sale and Supply of Alcohol (Display of Low-alcohol Beverages and Other Remedial Matters) Amendment Bill

Justice and Electoral

9 June

Social Security Legislation Rewrite Bill

Social Services

22 June

Te Awa Tupua (Whanganui River Claims Settlement) Bill

Māori Affairs

6 July

Te Ture Whenua Māori Bill

Māori Affairs

14 July

Trans-Pacific Partnership Agreement Amendment Bill

Foreign Affairs, Defence and Trade

22 July


Submissions closed

Bill

Select Committee

Report due (2016)

Agricultural Compounds and Veterinary Medicines Amendment Bill

Primary Production

17 June

Civil Defence Emergency Management Amendment Bill

Government Administration

9 August

Education Legislation Bill

Education and Science

8 June

Financial Assistance for Live Organ Donors Bill

Health

23 September

Geographical Indications (Wine and Spirits) Registration Amendment Bill

Primary Production

17 September

Kermadec Ocean Sanctuary Bill

Local Government and Environment

2 August

Land Transfer Bill

Government Administration

15 September

Minimum Wage (Contractor Remuneration) Amendment Bill

Transport and Industrial Relations

30 June

New Zealand Horticulture Export Authority Amendment Bill

Primary Production

29 September

Ngāti Pūkenga Claims Settlement Bill

Māori Affairs

13 October

Ngatikahu ki Whangaroa Claims Settlement Bill

Māori Affairs

13 October

Papawai and Kaikokirikiri Trusts Amendment Bill

Māori Affairs

2 September

Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill

Commerce

9 August

Rangitāne o Manawatu Claims Settlement Bill

Māori Affairs

15 September

Resource Legislation Amendment Bill

Local Government and Environment

6 September

Royal New Zealand Foundation of the Blind Act Repeal Bill

Health

2 September

Statutes Amendment Bill

Government Administration

9 June

Substance Addiction (Compulsory Assessment and Treatment) Bill

Health

15 September

Taranaki Iwi Claims Settlement Bill

Māori Affairs

15 September

Tauranga Moana Iwi Collective Redress and Ngā Hapū o Ngāti Ranginui Claims Settlement Bill

Māori Affairs

13 October

Te Atiawa Claims Settlement Bill

Māori Affairs

15 September

Wildlife (Powers) Amendment Bill

Local Government and Environment

29 September

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.

Births, Deaths, Marriages, and Relationships Registration (Preventing Name Change by Child Sex Offenders) Amendment Bill (as reported by the Social Services Committee)
Building (Pools) Amendment Bill
Canterbury Property Boundaries and Related Matters Bill (as reported by the Local Government and Environment Committee)
Child Protection (Child Sex Offender Register) Bill
Evidence Amendment Bill
Health Practitioners (Replacement of Statutory References to Medical Practitioners) Bill
Keep Kiwibank Bill
Land Transport (Admissibility of Evidential Breath Tests) Amendment Bill
Māori Purposes Bill
Ngāruahine Claims Settlement Bill
Official Information (Parliamentary Under-Secretaries) Amendment Bill (as reported by the Government Administration Committee)
Public Collections and Solicitations (Disclosure of Payment) Bill (as reported by the Social Services Committee)
Shop Trading Hours Amendment Bill (as reported by the Commerce Committee)
Smoke-free Environments (Tobacco Plain Packaging) Amendment Bill
Taxation (Income-sharing Tax Credit) Bill


Bills awaiting third reading

Appropriation (2016/2017 Estimates) Bill
Commerce (Cartels and Other Matters) Amendment Bill
Coroners Amendment Bill
Drug and Alcohol Testing of Community-based Offenders, Bailees and Other Persons Legislation Bill (formerly the Drug and Alcohol Testing of Community-based Offenders and Bailees Legislation Bill)
Electronic Monitoring of Offenders Legislation Bill
Health (Protection) Amendment Bill
Hineuru Claims Settlement Bill
Human Rights Amendment Bill
Insolvency Practitioners Bill
Judicature Modernisation Bill
Natural Health and Supplementary Products Bill (formerly the Natural Health Products Bill)
Official Information (Parliamentary Under-Secretaries) Amendment Bill
Parental Leave and Employment Protection (6 Months’ Paid Leave) Amendment Bill
Residential Tenancies Amendment Bill
Riccarton Racecourse Bill and Riccarton Racecourse Development Enabling Bill
Social Security (Extension of Young Persons Services and Remedial Matters) Amendment Bill
Taxation (Transformation: First Phase Simplification and Other Measures) Bill


Acts awaiting assent

Climate Change Response (Removal of Transitional Measure) Amendment Bill
Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill


Acts assented

Appropriation (2014/15 Confirmation and Validation) Act 2016
This Act confirms and validates matters relating to Government spending in the 2014/15 financial year: The Act confirms the order in council that directs the transfer of amounts between output expense appropriations and the expenses incurred in excess of existing appropriations. The Act further validates unappropriated expenses and capital expenditure incurred.

Building (Earthquake-prone Buildings) Amendment Act 2016
This Act amends the Building Act 2004 in relation to managing earthquake prone buildings. Section 133AD stipulates a risk based framework to enforce timeframes and procedures for addressing earthquake prone buildings. To this extent, a building can have a low, medium, or high seismic risk. The Act clarifies the definition of, and criteria for, earthquake prone buildings based on its capability and potential harm in a moderate earthquake under section 133AB. A national earthquake prone building register is also established by the Act which must specify certain information about the building as determined by section 275A.

Environment Canterbury (Transitional Governance Arrangements) Act 2016
This Act replaces the Environment Canterbury (Temporary Commissioners and Improved Water Management) Act 2010 and establishes a new local governance structure for the 2016-19 local government term. The structure comprises a mix of both elected and ministerial appointed members, with an overall majority of elected members under section 9 of the Act. Both elected and appointed members have the same functions, powers, responsibilities, and duties irrespective of whether they were elected or appointed.

Local Government (Auckland Council) Amendment Act 2016
This Act amends the Local Government (Auckland Council) Act 2009 by prohibiting a person from being a member of more than one Auckland local board at any one time. In respect of running for election for more than one board, the Act introduces a requirement that a candidate must present to the electoral officer, written notice of all the boards the candidate is running for and ranking each local board in order of priority to determine where the candidate will sit if elected to more than one local board.

New Zealand Public Health and Disability (Southern DHB) Elections Act 2016
This Act cancels the 2016 triennial general election of the Southern DHB. In place of an election, the Act extends the term of the current Commissioner for the Southern DHB. The Act is designed to provide the Commissioner sufficient time to ensure the DHB achieves financial stability after a period of concern over the DHB's financial performance and spiralling deficit in June 2015.

New Zealand Business Number Act 2016
The Act enables eligible New Zealand entities to obtain or be allocated a New Zealand Business Number. This is a distinctive identifier for entities to interact with Government. Under the Act, a Business Number Register will record this information. In some situations this will be shared by authorised Government agencies and certain information will also be made publicly available. The purpose of this Act is to reduce the time and money eligible entities spend on interacting with government.

Te Ture mō Te Reo Māori Act 2016 / Māori Language Act 2016
This Act replaces the Māori Language Act 1987; amends the Broadcasting Act 1989; and amends the Māori Television Service (Te Aratuku Whakaata Irirangi Māori Act) 2003. The Act reinforces the status of the Māori language in New Zealand as taonga and as an official language and provides a means in which to support and revitalise the Māori language. Part 3 of the Act establishes Te Mātāwai as an independent statutory entity to provide leadership on behalf of iwi and Māori in their role as kaitiaki of the Māori language.

Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Act 2016
This Act has three primary implications. Part 1 of the Act amends the Student Loan Scheme Act 2011. The Inland Revenue Department and the Australian Taxation Office may now share information in relation to those with student loans who reside in Australia. Part 2 of the Act amends the Income Tax Act 2007 by imposing a new Residential Land Withholding Tax to act as a collection mechanism for the bright-line (a test introduced last year requiring income tax to be paid on any gains from the sale of residential land that is bought and sold within 2 years). The rules allow for the collection of tax from those living offshore who sell a property within two years of purchase. The agent of the vendor (the conveyancer) is liable for this payment. Part 3 of the Act amends the Goods and Services Tax Act 1985 by applying GST to cross-border intangibles and services. This includes internet downloads and online services.

Wellington Town Belt Act 2016
This Act’s purpose is to provide a transparent statutory basis for the Wellington City Council’s trusteeship and management of the Wellington Town Belt. It also recognises the relationship between the Belt and mana whenua. Section 4 of the Act outlines principles for the Council to abide in its management of the Town Belt include accessibility, availability, community participation, and supporting indigenous ecosystems. The size of the Town Belt is also set to increase under the Act by a further 120 hectares.


Legislative instruments

Accident Compensation (Motor Vehicle Account Levies) Regulations 2016
Animal Products (Dairy Industry Fees, Charges, and Levies) Amendment Regulations 2016
Animal Products (Fees, Charges, and Levies) Amendment Regulations 2016
Dairy Industry (Fonterra Levy) Regulations 2016
Freshwater Fisheries Amendment Regulations 2016
Gas (Levy of Industry Participants) Regulations 2016
Governor-General (Annuities) Determination 2016
Harmful Digital Communications Act Commencement Order 2016
Hazardous Substances and New Organisms (Personnel Qualifications) Amendment Regulations 2016
Health Practitioners (Protected Quality Assurance Activity—New Zealand Orthopaedic Association Practice Visit Programme) Notice 2016
Health Practitioners (Quality Assurance Activity—Southern DHB) Notice 2016
Housing Accords and Special Housing Areas (Auckland—New May 2016 Areas) Order 2016
Housing Accords and Special Housing Areas (Nelson—New May 2016 Area) Order 2016
Housing Accords and Special Housing Areas (Queenstown—New May 2016 Area) Order 2016
Housing Accords and Special Housing Areas (Tauranga—New May 2016 Areas) Order 2016
Housing Accords and Special Housing Areas (Wellington—New May 2016 Area) Order 2016
Misuse of Drugs (Classification and Presumption of Supply—25B-NBOMe, 25C-NBOMe, and 25I-NBOMe) Order 2016
National Animal Identification and Tracing (Levies) Amendment Regulations 2016
National Animal Identification and Tracing (Obligations and Exemptions) Amendment Regulations 2016
New Zealand Public Health and Disability (Health Promotion Agency Levy) Order 2016
Sale and Supply of Alcohol (Vesting of Undertaking of Masterton Licensing Trust in Masterton Community Trust) Order 2016
Taupo Fishery Amendment Regulations 2016


In the week ahead

What’s coming up in the House

The House is currently sitting in the second of four back-to-back sitting weeks – the most intensive sitting period of the Parliamentary year. The Government will look to progress various Budget related Bills this week and will issue a business statement setting out its the legislative agenda for the remainder of this sitting period on Thursday 2 June.


In committee

Recent Committee meetings

Select Committees met over the last two weeks.

The Health Committee considered the Royal New Zealand Foundation for the Blind Act Repeal Bill and the Substance Addiction (Compulsory Assessment and Treatment Bill).

The Finance and Expenditure Committee considered the Controller and Auditor-General’s Draft Annual Plan 2016/17 and the Reserve Bank of New Zealand, ‘Financial Stability Report’.

The Government Administration Committee considered the Land Transfer Bill and the Report of the Controller and Auditor General, ‘Public sector accountability through raising concerns’.

The Local Government and Environment Committee considered the Resource Legislation Amendment Bill and the Kermadec Ocean Sanctuary Bill.

The Primary Production Committee considered the New Zealand Horticultural Export Authority Amendment Bill and the Geographical Indications (Wine and Spirits) Registration Amendment Bill, and was briefed into the protection of farm property and on the hemp industry.

The Regulations Review Committee was briefed on the Government responses to two reports of the Regulations Review Committee.

The Transport and Industrial Relations Committee considered the Inquiry into the future of New Zealand’s mobility.


In the courts

Supreme Court provides guidance on reasonable credit fees under the CCCFA

Sportzone Motorcycles Limited (In Liq) and Motor Trade Finances Limited v Commerce Commission Wellington, Supreme Court, 12 May 2016, [2016] NZSC 53

The Supreme Court has commented on whether credit fees charged by lenders are reasonable, as required by the Credit Contracts and Consumer Finance Act 2003 (CCCFA).

The case was originally brought by the Commerce Commission in 2009 against Motor Trade Finances Ltd (MTF) and Sportzone Motorcycles Ltd, on the basis that the companies charged unreasonable establishment, account maintenance and arrears fees on 39 finance contracts entered into between 2005 and 2008. In 2013, the High Court found for the Commerce Commission, ruling that the fees were unreasonable and therefore in breach of the CCCFA. MTF and Sportzone filed an appeal which was dismissed by the Court of Appeal in 2015. The companies filed for appeal in the Supreme Court.

The Supreme Court was unanimous in its dismissal of the appeal on the basis that MTF and Sportzone had contravened section 41 of the CCCFA, which prohibits the inclusion of unreasonable credit fees or default fees in consumer credit contracts. In finding for the Commerce Commission, the Court held that section 41 required a ‘transaction-specific approach to the setting of fees’, such that these fees could not be used to cover a lender's operating costs. Fees charged must be limited to the actual cost of the establishment, administration and maintenance of the particular loan or the consequences of default.

Commenting on the decision, the Commerce Commission said the Supreme Court had sent a clear message to lenders that general operating costs incurred by the lender must be recovered in the interest rate, and cannot be charged as a credit or default fee.

MTF and Sportzone were instructed to pay costs of $25,000 plus reasonable disbursements to the Commerce Commission.

The Supreme Court’s decision can be viewed 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 (2016)

Charles Parsons NZ Limited

Knitted fabrics

6006.10.19

14 June

Johns Adhesives NZ Pty Limited

Polyurethane laminating adhesive

3506.91.00
3909.30.09
3909.50.09

14 June

Panasonic New Zealand Limited

Complete residential storage battery system, comprising: battery charger, lithium-ion batteries and network adaptor

8507.60.00

14 June

In consultation

New

Who

What

By when (2016)

Commerce Commission

Process and Issues Paper on Section 30R review of the unbundled bitstream access standard terms determination

30 June

Department of Conservation

Application from Nelson Marlborough Institute of Technology to view marine mammals for educational purposes.

10 June

Intention to grant a concession to Milford Sound Development Authority in Milford Sound/Piopoitahi Fiordland National Park.

8 July

Intention to grant a concession to Pioneer Energy Limited on the Fraser River strip.

12 July

Intention to grant an aircraft concession to Glacier Helicopters Ltd in Westland National Park.

30 June

Kahurangi National Park Management Plan amendment to extend the Heaphy Track mountain biking season.

12 July

Review of the Westland Tai Poutini National Park Management Plan in accordance with the National Parks Act 1980.

21 October

Department of Internal Affairs

Consultation on the New Zealand Appendices to the Australian/New Zealand Gaming Machine National Standard.

10 June

Electricity Authority

Review of distributed generation pricing principles.

26 July

Transmission pricing methodology: second issues paper.

26 July

Energy Efficiency and Construction Authority

Proposed Scarcity Pricing Code Amendments.

7 June

Inland Revenue Department

Donee organisations – clarifying when funds are applied wholly or mainly to specified purposes within New Zealand.

24 June

Payment of shortfall penalty using losses, draft standard practice statement

15 July

Ministry for Primary Industries

Proposed amendments to the importing requirements for Rosa nursery stock.

27 June

Ministry of Business Innovation and Employment

Discussion document considering options for expanding the purpose of one or more of the existing levies on electricity, transport fuels and gas.

7 June

Ministry of Health

Consultation Document: Proposed radiation safety regulations.

22 June

Proposed advice to the Ministry of Health: The Use of Cyropreserved Ovarian Tissue to Restore Ovarian Function.

4 July

Discussion Document: New Zealand Health Research Strategy.

29 July

The Regulation of Natural Health Products. List of draft permitted substances and conditions.

31 October

Ministry of Justice

Applying for temporary approval to provide legal aid services consultation paper.

15 June

New Zealand Land Transport Agency

Proposed rule change for drivers or operators of vehicles carrying dangerous goods.

20 June

Pharmac

Proposal to list a range of Interventional Cardiology products supplied by Biotronik Australia Pty Limited.

3 June

Proposal to award sole supply of bortezomib in DHB hospitals.

3 June

Proposal to list a range of sterilisation packaging products and associated consumables – supplied by Halyard Australia Pty Limited, BSN Medical Limited and REM SYSTEMS Limited.

7 June

Reserve Bank

Default option for publications of submissions.

4 August

Revised Policy proposals for the review of the outsourcing policy for registered banks

12 August

Standards New Zealand – Joint standards

Energy efficiency – installing bulk thermal insulation in residential buildings.

3 June

Environmental management systems – requirements with guidance for use: the requirements for an environmental management system that an organisation can use to enhance its environmental performance.

10 June

Root cause analysis: specifying the steps that root cause analysis should include.

10 June

Telecommunications installations – Telecommunications pathways and spaces for commercial buildings: provides specific guidance for physical pathways between buildings.

16 June

Electrical Installations (known as the Australian/New Zealand Wiring Rules).

20 June

Road safety barrier systems and devices Part 2: road safety devices – requirements for safety barrier systems.

22 June

Particular requirements for shavers, hair clipper, and similar appliances: AS/NZS 60335.2.8:2013

15 July

Particular requirements for transportable cut-off machines

15 July

Testing of optical fibre cabling: DR AS/NZS 14763.3:2016

25 July

WorkSafe NZ

Consultation on Good Practice Guidelines on Conducting Asbestos Surveys

3 June

Current

Who

What

By when (2016)

Department of Conservation

New listings and changes to the threatened status of New Zealand vascular plant taxa.

31 July

New listing of the threatened status of New Zealand vascular plants.

31 July

Ministry of Business, Innovation and Employment

Exposure draft of the Incorporated Societies Bill.

30 June

Ministry of Foreign Affairs and Trade

International climate change negotiations and issues.

ongoing

Ministry of Transport

Driver licensing review.

2 June

Imagining New Zealand’s Transport Future discussion document.

ongoing

New Zealand Transport Agency

Land Transport (Driver Licensing Rule) 1999: Driver Licensing Review.

2 June

Standards New Zealand – Joint Standards

Structural steelwork – Fabrication and erection.

25 May

Safety in laboratories Part 3: Microbiology safety and containment aspects of work with microorganisms.

9 June

Scaffolding Part 2: Couplers and accessories – requirements for manufacturers and suppliers.

10 June

Gas appliances: general requirements: AS/NZS 5263.0:2016

15 June

Windows – Methods of test. Part 1: Test sequence, sampling, and test methods.

16 June


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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