NEWS ON POLICY AND POLITICS
31 August, 2007

Watching Brief is a regular publication from Russell McVeagh on developments in public law and policy of interest to New Zealand business.

www.russellmcveagh.com

IN POLITICS

Local Government Rates Report Released
The report on the Local Government Rates Inquiry has been released to mixed and predictably entrenched reviews more...

Negotiation And Agreement The Way Forward On Walking Access
The Government has accepted the recommendations of an independent panel which was set up to address walking access issues. more...

IN PARLIAMENT

Bills Introduced more...

Before Select Committee

Open for submissions more...
Submissions closed more...

Bills Reported Back /Awaiting Second Reading more...

Supplementary Order Papers more...

Bills Passed more...

Acts Assented more...

Regulations more...

HEARINGS OF NOTE more...

LEGISLATION IN THE WINGS more...

IN CONSULTATION more...

Local Government Rates Report Released

The report on the Local Government Rates Inquiry has been released to mixed and predictably entrenched reviews.

The Inquiry panel makes a total of 96 recommendations, many of which extend beyond rating a rehearsal of the usual rating options to how local government is funded over the long-term.
If the panel registered one thing, it was the unsustainability of rates as the primary means of revenue raising. A range of alternative or supplementary options has been advanced for what will undoubtedly be vigorous debate, one almost certain to be deferred until after this years' local body elections.

From the standpoint of business, some of the panel's recommendations are positive and provide fruitful lines for future engagement with government. Debt funding, user pays and the removal of differentials are cases in point. But there are negatives too, not least the recommendation to extend development contribution powers to Regional Councils and the defence of councils' relatively unfettered powers to decide what services or businesses in which they want to become involved.

Other key recommendations advanced by the panel include:

• removal of the power to set uniform annual general charges from the Local Government (Rating) Act 2002;
• removal of rating differentials;
• promotion of a common rating system across the country for general rates based on capital value;
• greater use by councils of powers to exercise flexibility in rating to better reflect value in use;
• the need for consideration to be given to an 'international visitors environmental levy' as an option for funding local authority 'environmental costs' ;
• establishment of a contestable 'Infrastructure Equalisation Fund', funded by a share of GST, to provide financial assistance for the development and maintenance of water supply, waste water and storm water;
• removal of the categories of non-rateable (and 50% non-rateable) Crown and non-Crown Land, except for the Crown conservation estate, (there are some exceptions such as for roads and Crown land including conservation estate, seabed, and foreshore and local authorities may still provide for remission through their rates remission policies).

So what can we expect from all this? The panel's recommendations are a bit of a grab-bag with evident areas of contradiction. Also, the panel has not succeeded in grappling with some of the fundamental drivers of rates inflation, such as the lack of rigour associated with some local body expenditure and the range of council activity. The panel's injunction that local bodies should exercise restraint is a weak response to what has become a serious problem and arguably reflects the inherent weakness in the terms of reference under which they were operating.

Given that any substantive progress on the panel's recommendations will require legislative change, it's doubtful that anything meaningful will result until after the next general election. The government is in no position to court controversy, particularly in Auckland, and backing any horse - no matter how strong - will have its detractors with both the public and the media alike. Action will probably have to await some more fundamental decisions about the shape and functions of local bodies and for that we will have to look to the main political parties and their long-term local government policy. National is expected to have a policy position ready for publication in the next few weeks. On the government side of things, look for an increase in eligibility thresholds and additional budget provision for the rates rebate scheme.

To view the Report of the Local Government Rates Inquiry' click here.

Negotiation And Agreement The Way Forward On Walking Access

The Government has accepted the recommendations of an independent panel set up to address walking access issues,

"The Labour-led Government's approach to securing new public walking access involving private land is based on building on the existing goodwill and co-operation of landholders, rather than one of confrontation and compulsion. There is no 'one-size fits all' solution as each issue is likely to have a distinct history and set of circumstances", said Rural Affairs Minister, Damien O'Connor.

The Detail

1. The policy of negotiation and agreement with the landholder will not be followed where access is achieved through existing legal mechanisms, such as:
   - esplanade reserves established on subdivision,
   - marginal strips created on the disposal of Crown land, access created as part of tenure review of Crown pastoral lease land,
   - access created as a condition for consent to the acquisition of land by overseas persons.
   
   
2. Government priorities for negotiation over private land should be:
   - areas along the coast where public access on both the foreshore and the dry margin is unavailable,
   - restoring and realigning access along water margins where agreement can be reached between landholders, the Crown and/or local authorities,
   - creating new access along water margins where none currently exists,
   - access to the coast where no public access is available.
   
   
3. A new access entity will be established to:
   - consider all forms of access, with a priority on walking access,
   - acquire access over private land and fund the acquisition of such rights,
   - consider the Walking Access Panel's additional recommendations on its functions,
   - take over the operational responsibility for the New Zealand Walkways Act 1990.
   
   
4. An establishment unit within MAF will undertake a stock take of existing mappinginformation and make a preliminary assessment of the public requirement and priorities for walking access mapping prior to publishing mapping information about existing walking access.
   
   
5. A contestable fund
   
   Funding will be sought to establish a contestable fund to enhance public access over private land and for other matters relevant to access. Local authorities and other organisations will be eligible to apply.
   
   In a related move the effectiveness of the Overseas Investment Act 2005 will be reviewed in 2012.

Bills Introduced

Broadcasting Amendment Bill:
Government Bill. Hon Steve Maharey

Broadcasting Minister, Steve Maharey, has introduced an amendment to the Broadcasting Act 1989 to allow funding agencies, NZ On Air and Te Mangai Paho, to fund content to be used in different forms, such as on the internet, cell phones, as well as on television. This is outside their current functions.

Mr Maharey says this Bill is to keep government funding up to pace with the rapidly changing face of our broadcasting sector, in the exciting move to digital.
 
The amendment will also allow Te Mangai Paho to archive funded Maori language and culture programmes.

Misuse of Drugs (Classification of BZP) Amendment Bill
Government Bill. Hon Jim Anderton

The Bill will amend the Misuse of Drugs Act 1975 to make it illegal to possess and use, sell, supply, import, export, or manufacture benzylpiperazine (BZP), phenylpiperazine, and related substances.  These substances are the active ingredients in the majority of party pills.

Dairy Industry Restructuring Amendment Bill (No 2)
Government Bill. Hon Jim Anderton

The Bill will remove export restrictions from some markets or parts of US markets, provides for the Minister of Agriculture to allocate export licences for those markets, introduces penalties for false declarations of information used for allocations of export licences, and restricts the use of export licences for over-quota trade for two markets.

Family Courts Matters Bill
Government Bill. Hon Rick Barker

The Bill will amend legislation to increase the openness of Family Court proceedings and improve the efficiency and effectiveness of the Family Courts by making changes to processes and procedures.

Bills Before Select Committee

Dairy Industry Restructuring Amendment Bill (No 2)
Gambling Amendment Bill (No 2)
Immigration Bill
Limited Partnerships Bill

Open For Submissions

Submissions Closed

Bills Reported Back / Awaiting Second Reading

Crimes (Repeal of Seditious Offences) Amendment Bill
International Finance Agreements Bill

Supplementary Order Papers

SOP 137: Minimum Wage (New Entrants) Amendment Bill
Member in Charge: Hon Ruth Dyson
Type: Substantive amendment

This SOP amends clause 4 of the Minimum Wage (New Entrants) Amendment Bill, which repeals section 4(1) and (2). 

The amendments to new subsections (1) to (4) are as follows:

• The new subsection (1)(a) authorises the making of an Order in Council prescribing the minimum rate of wages payable to workers who are 16 years of age or older and to whom neither new paragraph (b) nor (c) applies;
• The new subsection (1)(b) authorises the making of an Order in Council prescribing the minimum rate of wages payable to workers who are new entrants, being workers who are 16 or 17 years of age.  However, this paragraph does not apply to workers who are 16 or 17 years of age if:
• they have completed three months or 200 hours of employment, whichever is the shorter; or
• they are supervising or training other workers; or
• they are subject to a rate prescribed under new paragraph (c) for trainees.
• A new subsection (4) is substituted and defines "employment" for the purposes of new subsection (1)(b)(i). The definition:
• includes employment undertaken with more than one employer; and
• includes any employment undertaken before the commencement of the Bill; but
• excludes any employment undertaken before a new entrant turns 16 years of age.

SOP 136: Income Tax Bill
Member in Charge: Hon Peter Dunne
Type: Substantive amendment

This SOP amends the Income Tax Bill 2006 by incorporating the new measures enacted on 21 May 2007 in the Taxation (KiwiSaver and Company Tax Rate Amendments) Act 2007.

It also contains:

• some rewritten provisions relating to the fair dividend rate method for calculating FIF income or loss from an attributing interest in a FIF;
• a rationalization of the basis for the allocation of income or deductions in Parts C, D and E, whether tax year, income year or accounting year in line with the appendix to schedule 51;
• some subediting changes for consistency and accuracy; and
• a new schedule 52 (Comparative tables of old and rewritten provisions).

SOP 130: Taxation (Annual Rates, Business Taxation, KiwiSaver and Remedial Matters) Bill
Member in Charge: Hon Peter Dunne
Type: Substantive amendment

This SOP amends the Taxation (Annual Rates, Business Taxation, Kiwi Saver, and Remedial Matters) Bill.  The SOP contains amendments in relation to KiwiSaver and complying superannuation funds. 

The amendments have the following main effects:

• Complying fund providers will be required to lodge employer participation agreements with the Government Actuary.
• Complying fund providers will be required to pay lump sums, in the same way as KiwiSaver providers are so required.
• KiwiSaver and complying superannuation fund member tax credit drafting is remedied, including the basic formula, and the ability to claim the credits.
• KiwiSaver and complying superannuation fund member tax credit are clarified, by clarifying the relevant period of membership for the calculation of the credit.

Employer contributions and superannuation subsidies paid to Members of Parliament, judicial officers, and sworn members of the Police will be counted towards compulsory employer contributions.

Bills Passed

Building (Consent Authorities) Amendment Bill
Major Events Management Bill
Weathertight Homes Resolution Services (Remedies) Amendment
Wills Bill

Acts Assented

Appropriation (2007/08 Estimates) Act 2007
Imprest Supply (Second for 2007/08) Act 2007
Mental Health Commission Amendment Act 2007
Weathertight Homes Resolution Services (Remedies) Amendment Act 2007 (2007 No 33)
Building (Consent Authorities) Amendment Act 2007 (2007 No 34)
Major Events Management Act 2007 (2007 No 35)
Wills Act 2007 (2007 No 36)

Regulations

Fisheries (Location and Inspection of Registers) Notice 2007
Securities Act (AMP Capital Investors (New Zealand) Limited) Exemption Notice 2007
Takeovers Code (Sealegs Corporation Limited) Exemption Amendment Notice 2007
Fisheries (Cost Recovery) Amendment Rules 2007
Tariff (Concession) Amendment Order 2007
Customs and Excise Amendment Regulations 2007
Building Amendment Regulations (No 2) 2007
Sports Fish Licences, Fees, and Forms Notice 2007
 Education (2008 School Staffing) Order 2007
Social Security (Monetary Benefits) Regulations 2007
Social Security (Application of Work Test Obligations) Regulations 2007
Social Security (Exemptions under Section 105) Amendment Regulations 2007
Land Transport Amendment Act 2005 Commencement Order 2007
Transport Services Licensing Amendment Regulations 2007
Land Transport (Infringement and Reminder Notices) Amendment Regulations 2007
Land Transport (Storage and Towage Fees for Impounded Vehicles) Amendment Regulations 2007
 Land Transport (Requirements for Storage and Towage of Impounded Vehicles) Amendment Regulations 2007
Fisheries (Location and Inspection of Fish Farmer Register) Notice 2007
Fisheries (Location and Inspection of Aquaculture Agreements Register) Notice 2007
Fisheries (Appointment of Commercial Fisheries Services Limited as Place for Receipt of Returns) Notice 2007

The Justice and Electoral select committee has continued to hear submissions on the Treaty of Waitangi (Removal of Conflicts of Interest) Amendment Bill and Principles of the Treaty of Waitangi Deletion Bill.

The Primary Production select committee received a report from the Office of the Auditor-General on "Sustainable Development: Implementing the Programme of Action".

The Transport and Industrial Relations select committee has continued to consider the Airport Authority (Sale to the Crown) Amendment Bill submissions.

New regulatory regime for minerals
Crown Minerals has been working on developing a new regulatory regime with respect to New Zealand's minerals.  The new programme will allow increased permit allocation efficiency and a simplified royalty regime.

Local Authorities exemption under Securities Act
A new Bill is to be introduced which will reinstate the previous exemption available to Local Authorities with respect to the Securities Act and the requirement to produce a prospectus.

Biofuels legislation
The Government's Bill on biofuels and associated mandatory sales obligations is to be introduced shortly following the Bill's approval by Cabinet last week.

Review of Financial Products and Providers
The Commerce Minister (Hon Lianne Dalziel) has signalled that she intends to strengthen proposed reforms to the non-bank financial sector in the wake of recent finance company collapses.  The Minister has also signalled that the proposed draft legislation requires time to ensure that it is appropriate, and then the industry will require a transition period.  It is looking likely, therefore, that the new legislation will not be in place until late 2008.

Trustee Amendment Bill
Cabinet has signed off on a draft Trustee Amendment Bill, following the Law Commission recent work in this area.

Food Act 1981 to be replaced
Cabinet has approved a new Food Bill to replace the Food Act 1981.

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