NEWS ON POLICY
AND POLITICS |
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IN POLITICS Poll Shock Politicians may protest that there's only one poll that matters, but there is no doubt that last weekend's Fairfax poll has come as a shock to both main political parties. more... Briefings to an Incoming Government Those used to dealing with central government will be familiar with BIMs - the Briefings to Incoming Ministers. more...IN OTHER NEWS SOEs, CRIs and the Commerce Act more... Limited Partnerships Law to Attract International Investors more... Coastal Shipping Strategy more... CLIMATE CHANGE UPDATE New Kyoto Figures Give More Flexibility to Phase in Emissions Trading Scheme more... Forestry and Emissions Trading more... Climate Change Bill more...PROGRESS OF LEGISLATION Bills Introduced/Awaiting First Reading more... Bills Open for Submissions more... Bills Reported Back / Awaiting Second Reading more... Bills Delayed more... Bills Passed Second Reading / Awaiting Third Reading more... Second Reading Negatived more... Supplementary Order Papers more... Bills Passed Third Reading more... Acts Assented more... Regulations more... IN COMMITTEE more... IN CONSULTATION more...
LEGISLATION IN THE WINGS more... |
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| A MATTER OF OPINION | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Poll ShockPoliticians may protest that there's only one poll that matters, but there is no doubt that last weekend's Fairfax poll has come as a shock to both main political parties. For Labour it has been a body blow that has raised political expectations of this week's budget beyond anything that Dr Cullen can responsibly deliver. The fact that the Finance Minister has also seen fit to attack the Opposition's own proposals for tax cuts as fiscal recklessness suggests that his own planned give-aways are of the relatively modest kind. For National too the result may not be entirely welcome. Raising on the one hand the risk of complacency, the result also encourages a risk-aversion that will see National's spokespersons reluctant to say too much too soon about its policies for fear of wrecking it all. That is unfortunate particularly as business and community groups are now turning to National as a probable government and are eager to hear a well articulated agenda for the coming three years. Briefings to an incoming governmentThose used to dealing with central government will be familiar with BIMs - the Briefings to Incoming Ministers. With any new government, ministries and departments will busy themselves preparing detailed accounts of the issues, policies and work programmes with which they are, or expect to be, involved. A necessary part of that has been the representation by officials of community and business perspectives on any key initiatives. For the most part non-governmental groups have been content to leave this flurry of pen pushing to the denizens of Wellington's bureaucracy. However, such an arms-length approach may today be unwise. The erosion of public policy capacity and nervousness in some quarters about reflecting views not the government's own, suggests that private sector and not-for-profit groups may well be advised to write their own BIMs and direct them accordingly. To adapt Chicago Mayor William Hale Thompson's injunction to "vote early and often", those with policy concerns should position early and often.
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| IN OTHER NEWS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SOEs, CRIs and the Commerce ActThe Government has announced a proposal to allow State Owned Enterprises ("SOEs") and Crown Research Institutes ("CRIs") to cooperate without breaching the Commerce Act. Science, Research and Technology Minister Pete Hodgson, State Owned Enterprises Minister Trevor Mallard and Commerce Minister Lianne Dalziel jointly announced the proposed amendment to the Commerce Act. The Amendment would provide for SOEs and CRIs to be treated as interconnected bodies, making them exempt from Commerce Act restrictions on their ability to cooperate. The Amendment would only apply when the relevant entities are acting in accordance with the requirements of a ministerial direction, where that direction states that shareholding ministers in consultation with the Minister of Commerce consider this to be in the public interest. Trevor Mallard pointed out that, "Currently, it is difficult for the Government to act as a supportive owner and ensure these entities can cooperate where it is for the common good. The amendments will provide limited exemptions to specific actions. For example, it may be in the public interest that MetService and NIWA collaborate to provide New Zealanders with better weather forecasting." The proposed amendment would apply to all SOEs and CRIs except the three electricity generators Meridian Energy, Mighty River Power and Genesis Energy. Reserve Bank Announces New Liquidity MeasuresThe Reserve Bank has announced it is adopting measures to ensure there is sufficient liquidity in the banking system in the event of further international financial market turbulence. Deputy Governor Grant Spencer said the measures are similar to actions by other central banks in the wake of the global financial market turmoil. "We are confident the banking system can cope with current conditions, but we are taking steps to ensure it can handle any unforeseen pressure in the current uncertain environment," Mr Spencer said. The new liquidity measures, which will take effect from 3 June, include:
These changes follow initial measures introduced in September last year. All liquidity arrangements will be further reviewed in 12 months' time. Mr Spencer emphasised these liquidity measures have no implications for the Bank's monetary policy stance. The Reserve Bank intends to consult with market participants before finalising the timing and detail of the liquidity measures. Further detail of the measures is available at www.rbnz.govt.nz. Limited Partnerships Law to Attract International InvestorsLegislation establishing a new legal form of limited partnership has come into force this month. Under the Limited Partnerships Act 2008 the key features of the limited partnership structure include:
The Limited Partnerships Act was passed concurrently with the Taxation (Limited Partnerships) Act 2008, which establishes the tax treatment of limited partnerships and clarifies and simplifies the tax treatment applying to partnerships more generally. The limited partnership will be subject to “flow-through” tax status, meaning the partnership itself is not taxed. Instead, each partner is taxed individually at that partner's personal tax rate. Minister of Commerce Lianne Dalziel stated, "This is a cutting edge limited partnership structure that will be recognised by international investors. It will help grow the local venture capital industry and attract venture capital investment from overseas. This in turn will help New Zealand firms to grow and will encourage the economic development which is a cornerstone of the Labour-led Government's economic transformation agenda". Coastal Shipping StrategyCabinet has approved the Coastal Shipping Strategy, which identifies how coastal shipping will be an increasingly important part of New Zealand's transport system going forward and identifies ways of enhancing the industry.
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| CLIMATE CHANGE UPDATE | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New Kyoto Figures Give More Flexibility to Phase in Emissions Trading SchemePrime Minister Helen Clark has released new projections of New Zealand’s Kyoto liability, showing the provisional net position is projected to be a deficit of 21.7 million units during the first commitment period of the Kyoto Protocol (2008-2012). This compares with the projected deficit reported in May 2007 of 45.5 million units - a drop of 52 per cent. This means New Zealand's liability effectively halves from $1 billion to $481.6 million. “A range of factors is leading to the projected lower deficit. The impact of the Emissions Trading Scheme, the investment in renewable energy and sustainable transport modes, combined with slower growth and the effect of rising oil prices on fuel consumption are all having an impact. This gives more scope for flexibility around the phasing in of the Emissions Trading Scheme." Accordingly, the Government has proposed changes to the Climate Change (Emissions Trading and Renewable Preference) Bill which is currently before the Finance and Expenditure Select Committee. These include:
Helen Clark noted that “Between 2000 and 2007, the average growth rate of petrol consumption was 1.6 per cent per annum. The 2008 net position forecast projects a nil growth rate in petrol demand over the first commitment period. In other words the steeply rising price of oil in the short term is effectively doing part of the job the Emissions Trading Scheme is designed to do by slowing the rate of fuel consumption and emissions". Forestry and Emissions TradingThe Ministry of Agriculture and Forestry ("MAF") has released for consultation an exposure draft of the regulations for the forestry sector under the Government's proposed Emissions Trading Scheme ("ETS"). The draft regulations, which will apply to both pre-1990 and post-1989 forests, will help give effect to the forestry components of the ETS and are an updated version of the regulations released on 13 February. The draft forestry regulations contain provisions for:
MAF says that releasing the updated draft regulations and commentary ahead of decisions by Parliament on the Bill will provide forest owners with the information they need to provide feedback on the proposals. Submissions to MAF on the regulation close on 30 May 2008. Climate Change BillThe Climate Change (Emissions Trading and Renewable Preference) Bill grabbed headlines over the past week. In an interim report, the Finance and Expenditure Committee took note of recent announcements by Helen Clark and David Parker. As noted above, petrol, diesel and other liquid fuels will not be included in the ETS until 1 January 2011, two years later than originally proposed. Similarly, agriculture and other trade-exposed industries will have the free carbon credits to which they are entitled under the ETS phased out from 2018, five years later than originally proposed. The refrigeration industry might also receive a dispensation with a special consultation round taking place over whether hydroflurocarbons should fall under the ETS from 1 January 2010. Some of New Zealand's largest businesses have been before Parliament expressing their views on the ETS. The country's largest farmer, the SOE Landcorp, predicted a "catastrophic" decline in its profitability if free agricultural credits were not extended, specifically predicting ETS could cut profits by 25 - 50 percent in 2013, and by 75 percent by 2030. Another SOE, Solid Energy, stated that the Government would reap an $80 billion tax windfall when the ETS is rolled out between 2013 and 2025, something that David Parker rejected as being based on an unreasonably high carbon price and no change in behaviour by emitters. The owners of Southland's Tiwai Point aluminium smelter, Rio Tinto, warned that the ETS would put the smelter on the "path to closure". In terms of support, the Environmental and Conservation Organisations (an umbrella group) warned that climate change legislation needed strengthening and that concession to agriculture and industry would merely create inefficiencies and distortions. The Parliamentary Commissioner for the Environment, Jan Wright, said that the ETS must proceed. She emphasised that the core principle of the ETS was "polluter pays", an extension of user pays. |
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IN PARLIAMENT |
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Bills Introduced/Awaiting First ReadingCopyright (Artists' Resale Right) Amendment Bill This Bill amends the Copyright Act 1994 by establishing a mandatory resale right for New Zealand artists when their artistic works are resold in New Zealand. A resale right entitles an artist to receive a resale royalty payment each time an original artistic work is resold on the secondary art market. The right will apply to an artistic work in which copyright exists, including limited editions made by the artist or made under the artist’s authority, but excluding works of architecture (being a building or a model of a building). The right will be inalienable and the artist who created the artistic work will hold the right regardless of whether the artist owns the copyright in the work. The right can be transmitted only on the death of the holder in accordance with the artist’s will; or by operation of law. The resale right will continue for the same duration as copyright in a work (ie 50 years after the death of the artist). The resale right, including the collection of resale royalties, will be managed through a compulsory collection system by a sole collecting agency on behalf of artists. In return for managing the resale right, the collecting agency will be entitled to charge a fixed fee or percentage of the royalty, as determined under regulatory powers. Regulations will also provide for the appointment of the collecting agency and the rules governing its operation. Parliamentary Service Amendment Bill The Parliamentary Service Act 2000 provides for the Speaker to give directions for the provision of administrative and support services to members of Parliament, and the payment of funding entitlements for parliamentary purposes. The purpose of this Bill is to authorise the Speaker to give directions under this Act, in relation to certain candidates for election, during the period between polling day and the recognition of candidates as members. It also gives authority for the Parliamentary Service to approve expenditure in respect of these candidates in accordance with the Speaker's directions. Although legally there are no members of Parliament between the close of the polling day at a general election and the formal declaration of the election results a number of days later, it has for many years been the practice to make certain travel and accommodation entitlements available to candidates during this period where it is clear that they are likely to be elected. It has also for many years been the practice to continue support and funding entitlements during this period for candidates who were members before polling day. It is now doubtful that these practices have been authorised by the applicable legislation. This Bill makes provides express authorisation for these practices. Bills At Select CommitteeThe Holidays (Transfer of Public Holidays) Amendment Bill was read for the first time and referred to the Transport and Industrial Relations. Submissions close on 30 May 2008. The Committee is due to report back on 22 July. The New Zealand - China Free Trade Agreement Bill was read for the first time and referred to the Foreign Affairs, Defence and Trade Committee. Submissions close on 6 June 2008. The Committee is due to report back on 30 June.
Bills Reported Back / Awaiting Second ReadingClimate Change (Emissions Trading & Renewable Preference) Bill (the Finance and Expenditure Committee has issued an interim report) Bills DelayedTrustee Amendment Bill (Select Committee Report delayed from 30 May to 1 August) Bills Passed Second Reading / Awaiting Third ReadingBirths, Deaths, Marriages, and Relationships Registration Amendment Bill Second Reading NegativedNone Supplementary Order PapersSOP 203 Mauao Historic Reserve Vesting Bill This SOP updates certain references in Schedule 2 of the Mauao Historic Reserve Vesting Bill. Schedule 2 sets out the encumbrances that remain attached to Mauao historic reserve when the reserve is vested in the trustees of the Mauao Trust under the Bill. The updated information relates to the rights of Tauranga City Council to retain and maintain the existing reservoir and associated water and power supply lines. This information was not available at the time the Bill was introduced or reported back to the House. Bill Passed Third ReadingMauao Historic Reserve Vesting Bill Acts AssentedNone RegulationsConsumer Information Standards (Used Motor Vehicles) Regulations 2008 In Committeehe Commerce Committee heard submissions on the Commerce Amendment, Electricity Industry Reform Amendment and Companies (Minority Buy-out Rights) Amendment Bills. The Electricity Industry Reform Amendment Bill relates to electricity supply for rural customers. The Education and Science Committee heard submissions on the Education (Establishment of Universities of Technology) Bill. The Finance and Expenditure Committee continues to hear submissions on the Climate Change (Emissions Trading and Renewable Preference) Bill. Submitters continue to include some of New Zealand's largest businesses, including Air New Zealand, Fonterra, Meridian Energy and Rio Tinto/Comalco. See 'other news' above for more on these submissions. The Justice and Electoral Committee heard submissions on the Trustee Amendments and Real Estate Agents Bills. The Law and Order Committee is hearing submissions on the Corrections Bill (No 2), which is intended to update corrections law given advances in electronic communications and improve the control of contraband in prisons. The Local Government and Environment Committee continues to hear submissions on the Affordable Housing (Enabling Territorial Authorities) Bill and the Biofuel Bill. The Affordable Housing (Enabling Territorial Authorities) Bill will allow local councils to implement a policy which would require those developing residential land to provide affordable housing. Social service agencies told the committee that the Bill should require councils to act rather than just "enabling" them to do so. Developers tended to support alternative measures to address housing affordability such as releasing more land. Local Government NZ described the Bill as complex and involving unacceptable risk and cost. The Māori Affairs Committee continues to hear submissions on the Waka Umanga (Māori Corporations) Bill. Issues considered include representation, lack of mention in the Bill of the Treaty of Waitangi, grandfathering for mandated iwi organisations, the Crown's discretion under the Bill to recognise the mandate of an entity or persons to represent a tribal group, and the need to minimise compliance costs in the Bill's implementation (to ensure the opportunities presented by the Bill are utilised). The Health Select Committee continues to hear submissions on the Alcohol Advisory Council Amendment Bill and the Public Health Bill. The Transport and Industrial Relations Committee continues to hear submissions on the Public Transport Management Bill. Regional council submitters were generally supportive of the Bill as was the Council of Trade Unions (the latter with the caveat that good employer conditions should be included in the Bill as well as best value for money). The Social Services Committee is considering submissions on the Children, Young Persons, and their Families Amendment Bill (No 6). Issues considered include the definition of "young person", dealing with young offenders, placement of children under the care of CYPFs, and family group conferences.
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IN CONSULTATION |
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What's New
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Tertiary education tax status The Government is planning to legislate to ensure that state-funded tertiary education institutions, state (and state-integrated) schools, and certain non-resident charities are not required to register with the Charities Commission to retain their tax-exempt status. Legislation is expected to be introduced on budget day. The amendments will introduce a transitional measure to protect, in limited circumstances, the tax-exempt status of organisations that have difficulty completing their registration applications before the 30 June deadline. (Currently, to be eligible for an income tax exemption and gift duty exemption on the grounds of 'charitable purpose' after 1 July 2008, registration with the Charities Commission needs to occur before 30 June 2008). |
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LinksThis
publication is intended only to provide a summary of the subject
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advice. No person should act in reliance on any statement contained
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© Russell McVeagh 2005. All rights reserved.