NEWS ON POLICY
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A MATTER OF OPINION Sustainability Policy Package Unsustainable? The Government's job of building public confidence has become harder with the recent unravelling of its policy positions on Biofuels, the ETS and regional petrol taxes. more...IN THE NEWS Government Buys Rail and Ferry Business more... Debate opens on income splitting for tax gain more... Fine tuning of Emissions Trading policies recommended more... Biofuel Regulations more... Stapled stock tax legislation more...IN PARLIAMENT 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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Sustainability Policy Package Unsustainable?The Government's job of building public confidence has become harder with the recent "revisions" of its positions on Biofuels, the ETS and regional petrol taxes. Until now critics of the Government's sustainability package have been met with assurances that any difficulties would be sorted out later by the judicious use of regulation. The fact that the number of items falling into the "too hard" basket was increasing not lessening didn't appear to have a deterrent effect. Instead, the Government remained set upon a course that seemed to have been decided when the Prime Minister delivered her sustainability speech at the opening of the 2007 Parliament. At the time we speculated that Labour strategists had embarked on a rebranding campaign that would cement sustainability as the political cri de guerre for the 2008 election. It was a shrewd political move. But it was one that took no account of the worsening economic position of the Kiwi battler and the difficulty of justifying additional economic self-sacrifice in the face of mounting food and petrol prices. Faced with a serious risk to its core constituencies (that of low and middle income earners), the Government has wisely decided to defer the introduction of liquid transport fuels into the ETS by two years to 1 January 2011 and push the phase-out of free allocations from 2013 to 2018 with the end of the free allocation period moving from 2025 to 2030. The rationale offered for the suddenly not so critical timetable is that projections now show a 50% fall in our liabilities for the first Kyoto commitment period. Things are not so pressing. That's encouraging. More encouraging still is the Prime Minister's explicit statement that “The Government is determined that the ETS does not harm our economy or unnecessarily increase the cost of living for New Zealanders." Regardless of whether the motivations for the changed position are political or practical, the proposed breather and the judicious sentiment of doing no harm is welcome. Perhaps it will also allow time for the Government to consider what Australia's stance on emissions trading will be. The Rudd administration is scheduled to release its green paper on the design of its trading scheme in July. It could be salutary.
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Government Buys Rail and Ferry BusinessThe Government has signed an agreement with Toll Holdings Ltd for the purchase of Toll New Zealand’s rail and ferry business. Total purchase price is $665 million, with settlement on 30 June 2008. Effectively, the Government is paying $3.16 a share. Prime Minister Helen Clark linked the purchase to the Government's wider sustainable development strategy, stating that “Modernising our transport sector is central to transforming our economy and making it truly sustainable.” The Prime Minister has noted that "the Government was not going into this to make money", but that the purchase will allow Government to act directly rather than through a third party resulting in better value for the taxpayer. Subsidies to third parties and on-going disputes over the implementation of the National Rail Access Agreement can now be avoided. Through ONTRACK, the Government already owns the rail infrastructure including track, sleepers, bridges, tunnels, culverts and signalling infrastructure. Following the transaction with Toll, the Government will also own 180 mainline locomotives, 4,200 wagons, one rail ferry and leases on two other ferries. The Government is in discussions with Toll on a transitional governance agreement and is developing plans for the long-term governance structure of the rail business. Finance Minister Michael Cullen stated he would “explore options for significant investments in new, modern rolling stock. These will be presented to Cabinet and full details will be made available as soon as possible.” Debate Opens On Income Splitting For Tax GainThe Government has released a discussion document on income splitting for families with children to reduce their tax bill. Income splitting allows the income of a higher earning partner to be allocated to a lower earning partner, reducing the family's overall tax liability. Revenue Minister Peter Dunne said that if readers favour income splitting, they are asked to comment on the form it might take, "whether, for example, it should be on a 50/50 basis, what age limits should be set for the children involved, and what would constitute a 'family' for purposes of splitting income." Publication of the document is the result of a commitment made in the confidence and supply agreement between Labour and United Future. Submissions on the document close on June 30. Fine Tuning of Emissions Trading Policies RecommendedA scoping report by the Nelson based Cawthron Institute advises the Government to strengthen measures to enhance energy efficiency and provide clear national guidelines to protect natural resources as it moves to address the country’s greenhouse gas emissions. The Report examines potential environmental effects of the Government’s proposed Emissions Trading Scheme (and associated carbon reducing measures) over the period 2008 to 2020. Potential adverse effects it identifies include loss of biodiversity through the planting of pine trees on sites with significant native species, and increased pressure to alter rivers and other valued landscapes for the generation of renewable electricity. Encouraging early emissions reductions from the agricultural sector is also highlighted as a key point. The Report recommends Government introduces policies to guide regional councils to better identify and protect areas of natural character and landscape, “as a matter of urgency”. This would mean a concerted national effort to map areas of significant biodiversity and high value landscapes. The NZ Coastal Policy Statement is seen as a possible guide. The Report also recommends strengthening measures to enhance energy efficiency, and undertaking a strategic environmental assessment of the role of hydro in a sustainable energy system for New Zealand. A comprehensive investigation is proposed to consider the role of additional large hydroelectric plants in New Zealand, so that appropriate guidance can be provided to local authorities. Guidance on the use of freshwater for hydroelectric power should then be provided through the Government’s Sustainable Water Programme of Action. Biofuel RegulationsThe Ministry of Economic Development has begun drafting regulations to control the biofuels market once the Biofuels Bill is passed. The Ministry has issued a draft paper, Regulations Required for Administration of the Biofuels Sales Obligation, and seeks comments on:
Submissions close on 12 May. Stapled Stock Tax LegislationThe Government is inviting feedback on draft legislation to amend the tax law on "stapled stock" instruments that have debt components. The Government announced in February that there would be an amendment to prevent potential loss to the New Zealand revenue base arising from the use of stapled stock instruments that consist of debt attached to a share. Finance Minister Michael Cullen and Revenue Minister Peter Dunne have stated that, "At present, by using stapled stock instruments that have debt components, companies can pay tax-deductible interest to shareholders as a substitute for dividends. That becomes a particular concern if the instruments are issued to foreign investors in New Zealand companies, who can then claim tax deductions from New Zealand". The Income Tax Act is being amended to ensure that when a debt instrument that would normally give rise to tax deductions is attached to a share it will be treated as equity for tax purposes. No deductions for interest payments will be available. Interested parties have been invited to comment on two pages of draft legislation that have been published for consultation purposes. The Government is particularly interested on comments on the workability and scope of the draft legislation and whether it might have unintended consequences. Following consultation, the draft legislation will be included in the next available tax bill and, once enacted, will apply to debt stapled on or after the date of the original announcement, 25 February 2008. Stapled securities that were already issued at the time of announcement will not be affected by the legislative change. The draft legislation is available at www.taxpolicy.ird.govt.nz. The closing date for submissions is 30 May
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IN PARLIAMENT |
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Bills Introduced/Awaiting First ReadingSerious Fraud Office (Abolition and Transitional Provisions) Bill This Bill intends to disestablish the Serious Fraud Office. Its existing functions and powers will be reformed into a permanent Serious Fraud Taskforce within a new Organised and Financial Crime Agency. The proposed new agency is seen as a more streamlined response to both fraud and organised crime. Bills At Select CommitteeNone
Bills Reported Back / Awaiting Second ReadingSummary Offences (Tagging and Graffiti Vandalism) Amendment Bill Bills DelayedNone Bills Passed Second Reading / Awaiting Third ReadingNone Second Reading NegativedNone Supplementary Order PapersNone Bill Passed Third ReadingNone Acts AssentedManukau City Council (Control of Graffiti) Act 2008 RegulationsHealth Practitioners (Quality Assurance Activities: Boulcott Clinic Limited) Notice 2008 In CommitteeThe Health Committee continues to hear submissions on the Public Health Bill. Issues considered include many of those that have been a focus in previous submissions, including the wide regulation making power in clause 374(x). Cabinet has agreed that amendments to the Real Estate Agents Bill be proposed to the Justice and Electoral Committee. The Law and Order Committee continues to hear submissions on the Policing Bill. Issues considered include lack of a firm underpinning in the Bill for the Māori-Police partnership, sworn police staff serving on local councils (separation of powers issues), independence of the Police, powers and actions of police officers when securing a crime scene, and non-sworn staff.
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IN CONSULTATION |
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What's New
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| RELEASED BY ... | ISSUE | SUBMISSIONS
CLOSE ON... (2007) |
| Building & Housing – Dept of | Fencing of Swimming Pools Act 1987 | 30 June |
| Conservation - Dept of | New listing of threatened status of fungal species Conservation park proposal for Two Thumb Range |
1 June 4 July |
| Environment - Min of | National Water Environmental Standard | 31 July |
| Economic Development - Min of | Ultra Wide Band communication devices Regulations Required for Administration of the Biofuels Sales Obligation Telecom’s proposals for structural separation |
15 May 12 May
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| Electricity Commission | Interposed Model Contracts | 30 May |
| IRD | Draft stapled stock legislation Discretion to not assess a shortfall penalty for taking an unacceptable tax position ED00102 |
30 May 6 June |
| Land Transport NZ | Draft Land Transport Rule: Traction Engines [2008]; Draft Land Transport Rule: Vehicle equipment (immobilisers) amendment | 23 May |
| Tertiary Education Commission | NZ Skills Strategy | 1 June |
Current
| RELEASED BY... | ISSUE | SUBMISSIONS CLOSE ON... |
| Agriculture & Forestry - Min of | Review of the Dairy Industry Restructuring (Raw Milk) Regulations: Options for addressing industry concerns | 16 May |
| Economic Development - Min of | Draft Digital Strategy 2 | 12 May |
| Education - Min of | Schools Plus discussion document; Schools Plus questions | 31 May |
| Environmental Risk Management Authority | Application to field test genetically modified Allium species (onions, garlic & leeks) | 26 May |
| IRD | GST - Supply of leasehold land | 30 May |
| Labour - Dept of | Improving Health and Safety Hazard Management in the Underground Mining Industry | 6 June |
Reserves and Lands Disposal Bill
Cabinet has approved a Reserves and Lands Disposal Bill.
Electricity Amendment Bill
Cabinet made policy decisions on a new Electricity Amendment Bill, which addresses continuity of rural supply.
Search and seizure
Justice Minister Annette King says the Government has taken decisions on a comprehensive package of reforms to improve the exercise of search and surveillance powers by law enforcement agencies. The new package will assist law enforcement agencies but will also provide safeguards from the use of coercive police powers. Major changes include reform of the rules relating to use of surveillance devices in law enforcement, more explicit powers to search computers and seize electronic data, and production and monitoring orders and examination orders being available to law enforcement agencies.
Legal Services Amendment Bill
The Government is drafting a Legal Services Amendment Bill aimed at ensuring victims do not face additional stress during the processing of legal aid grants.
Standards and Accreditation Bill
Cabinet has made policy decisions regarding consultation on a Standards and Accreditation Bill.
Unit Titles Bill
The Unit Titles Bill is to be introduced to Parliament shortly. The Bill is designed to modernise unit titles law, making unit title developments easier to manage and providing greater flexibility for both unit title owners and bodies corporate.
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subject matter of this newsletter, please contact the partner/solicitor
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| Tim Clarke - Partner Ph 04 819 7532 [email protected] |
Doug Bailey - Consultant Ph 04 819 7572 [email protected] |
© Russell McVeagh 2005. All rights reserved.