NEWS ON POLICY AND POLITICS
6 December, 2006

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

National's 'dream-team' presents Labour with a real and present danger
Michael Cullen may have expressed delight at being able to draw a bead on a fresh political target, but behind the scenes Labour is said to have been panicked by the uncontested transition of John key and Bill English into their leadership roles. more...

National's Top 20 - 2005 & 2006 more...

Levies and regulation the recipe for waste minimisation
Nandor Tanczos' Waste Minimisation Bill looks set to receive government support, but not in anything like its present form. more...

Back on the foreshore
It may have exhausted the attention span of the media, but political interest in the foreshore and seabed legislation has not abated. The issue of land ownership and customary rights promises to be one of the defining political issues of 2007. more...

Human rights challenge only a matter of time
The fact that there is a serious issue with the Foreshore and Seabed legislation was firmly underscored by the Attorney-General's report in 2004, which found that the FSA was, on its face, discriminatory in its effect on Maori. more...

IN PARLIAMENT

Bills Introduced more...
Bills Defeated / Withdrawn more...
Before Select Committee more...

Open for submissions
Submissions closed

Bills Reported Back more...
Supplementary Order Papers more...
Bills Passed more...
Assented more...
Regulations more...
Committee Hearings more...

LEGISLATION IN THE WINGS

IN CONSULTATION

IN OTHER NEWS

National's 'dream-team' presents Labour with a real and present danger

Michael Cullen may have expressed delight at being able to draw a bead on a fresh political target, but behind the scenes Labour is said to have been panicked by the uncontested transition of John Key and Bill English into their leadership roles.

They have good reason. Although untried, Key has natural smarts and a growing charisma that has made him popular with media and public alike. English provides an excellent foil, combining hard experience and a thoughtful intelligence that will serve well as National comes to grip with a more centrist policy position.

Key's early signals to the electorate have been positive ones. The re-establishment of a women's affairs portfolio and the elimination of the side-show portfolio on political correctness have been well-received, particularly by the urban electorate. The acknowledgement of the environment as a priority will also have done much to appeal as will the olive branch plainly offered to the Maori Party. For Key the clear objective is to contest the middle ground of the New Zealand urban constituency that Labour has held substantially unchallenged since 1999.

Where Key arguably has been less adventurous is in his reshuffle of portfolio responsibilities. The missed opportunity to inject more of National's fresher faces into the first and second tier has been noted, as has the absence of a woman in any one of the top five positions. Those with expectations for Katherine Rich will have been disappointed at her No.8 ranking.

That said, Key does have the advantage of time and a wealth of talent upon which to draw. Sophomore MP Chris Finlayson will be one to watch and in what Key has cleverly dubbed his 'shadow Cabinet', Tim Groser's elevation to the Trade and Associate Finance portfolios should provide an opportunity to deliver against the considerable promise that he offered on first entering into Parliament.

Against a Labour front bench that conspicuously lacks new blood, National's new line-up presents an alternative that Labour strategists will have to find of concern.

National's Top 20 - Now and Then

Levies and regulation the recipe for waste minimisation

Seen as a vehicle for the government's own policies on waste, the Bill will be rewritten to reflect the government's preference for a regulatory back-stop for product stewardship programmes and the introduction of waste levies.

This new emphasis will see Tanczos' proposals for all businesses to have waste minimisation plans and for all supermarkets to carry a sign for each of the products subject to stewardship arrangements relegated or, more probably, removed. The compliance costs involved with the former and the absurdity of the average supermarket being required to erect up to 400 linear metres of signs because of the latter, mean that neither innovation is likely to win government support.

As to its own preferences, the government's appetite for back-stop regulation is not new. It is in fact its preferred model; a Damoclean option that has served it well elsewhere.

Its preference for the greater use of economic signals to modify behaviours has also been signalled in its approval of the Environment Commissioner's desire to see greater use of economic levers to promote environmental responsibility.

Whilst the bones of the revised Bill seem to have been decided, there is a lot of water to go under the bridge yet. The definition of what exactly is 'waste' needs clarification as does the size of any levy and at what point it should be applied.

For most of us, though, the key question relates simply to how big the eventual levy is going to be. In its current form, the Bill suggests $25 a tonne. Tanczos himself says that this is too high and leans more to the view of the council-dominated 'Industry Group', which advocated a levy starting at $10 and increasing over three years to $30 a tonne.

Hints from government members of the Select Committee suggest that neither proposition will be a goer, leaving us with a compromise option of perhaps a $10 / tonne levy with a review after five years.

In the end, what will determine the size of the levy, if any, will be the timing of the Bill. The decision by the Select Committee to delay its report back to the House until the end of June 2007 means that the Bill is unlikely to be passed until 2008. Whilst the government might be pleased at the opportunity to cite the Bill as an example of how it is saving the planet, it may be less happy about advancing what many will see as a cash grab by spendthrift councils. This Bill is one we will continue to watch.

Back on the foreshore

It might have exhausted the attention span of the media, but political interest in the foreshore and seabed legislation has not abated. The issue of land ownership and customary rights promises to be one of the defining political issues of 2007.

The introduction by Maori Party co-leader Tariana Turia of the Foreshore and Seabed Act (Repeal) Bill provided a catalyst, but, in the way of most members' bills, was likely to go unsupported and largely unremarked.

However, with the change in National's leadership and John Key's open overtures to Maori, the repeal bill will prove something more significant - no less than a test of exactly how far National is prepared to go.

For National the issue is difficult. Having initially fallen in with the government on the sanctity of the kiwi beach, the adoption of a 'softened' stance is unlikely to sit well with its more conservative support base. But for those in National's liberal wing, the inconsistency of the Foreshore and Seabed Act with principles of property ownership and the New Zealand Bill of Rights are issues that cannot be overlooked.

Thus the scene is set for an interesting and potentially government-defining tussle between the 'old' and 'new' thinkers of the Party. To be sure, National's position will be swayed by the prevailing opinion of the electorate, which, for all that it might want National to adopt a more inclusive face, might not want it to do so on this particular issue.

That may limit National's options, but not over much. Already there is a sense among at least some MPs that due legal process around the determination of customary rights should be followed. There is a recognition, too, that, in those very rare cases where a property right is found to exist, the 'kiwi beach' can still be protected by the simple expedient of acquisition with compensation. And in those even rarer cases where whenua tapu is involved and acquisition is consequently too problematic, the call for simple public respect and tolerance is not an unreasonable one.

Human rights challenge only a matter of time

The fact that there is a serious issue with the Foreshore and Seabed Legislation was firmly underscored by the Attorney-General's report in 2004, which found that the FSA was, on its face, discriminatory in its effect on Maori. Despite going on to conclude that the limitation on Maori rights was a "justifiable limitation" under s5 of the Bill of Rights Act, the Attorney-General nonetheless acknowledged that a "human rights body may regard [the lack of compensation in] the Foreshore and Seabed Bill as imposing an unjustifiable limitation on a protected right".

That soon proved to be the case. A challenge was launched by southern iwi, Ngai Tahu, with no less a body than the UN Committee on the Elimination of Racial Discrimination. The Committee, which found that the FSA discriminated against Maori and breached the International Convention on the Elimination of All Forms of Racial Discrimination. Similarly, the UN Human Rights Commission's Special Rapporteur saw fit to visit New Zealand in late 2005 (no doubt as a result of the Committee's finding) and, in his subsequent report, recommended (among other things) that the FSA be repealed.

The government's offended response was by the numbers. The Commission and the UN's Special Rapporteur were out of touch and uninformed, and both lacked credibility even within the UN.

Informed or not the Commission's finding was a blow for the government and it is surprising that in the aftermath no attempt that we are aware of has yet been made to bring a domestic challenge to the legislation under the Human Rights Act 1993.

Certainly the avenue is there. The HRA gives the Review Tribunal the power to grant a declaration that legislation is inconsistent with the right to freedom from discrimination recognised in section 19 of the Bill of Rights Act. Such a challenge would presumably be made on the basis that, under the FSA, owners of "specified freehold interests" in the foreshore and seabed do not lose any beneficial interest in their property. In contrast, Maori are deprived of any customary rights they may have been able to prove at common law. The argument would go that for one group to be deprived of an existing source of property rights and for another not to be similarly deprived, would be a breach of section 19. The extent of the discrimination is underscored by the fact that the FSA also removes the ability of Maori to obtain any legal remedy for the expropriation of private property rights, only giving a right to negotiate for redress with the Crown. This stands in marked contrast to the fact that owners of "specified freehold interests" continue to have access to compensation under the Public Works Act.

Should a 92J(2) declaration be made, the Minister responsible for the legislation must, within 120 days of any appeal right lapsing: (i) table a report in Parliament drawing attention to the Review Tribunal finding; and (ii) table a further report outlining what the Government intends to do about it.

Such a challenge may ultimately prove to be a more effective legal remedy for Maori than previous attempts to challenge the FSA at the UN, which the Government dismissed as meaningless and lacking in credibility. If successful, a declaration (and the local condemnation that would follow) would prove significantly harder to ignore.

In our view, it is merely a matter of time before such a challenge is brought and the foreshore and seabed legislation goes under the human rights microscope.

Bills Introduced

Agricultural Compounds and Veterinary Medicines Amendment Bill
Government Bill, Hon Annette King:

This Bill amends the Agricultural Compounds and Veterinary Medicines Act 1997. The Bill is intended to ensure that the risks to trade in primary produce, human health, animal health, and agricultural security, associated with the use of agricultural compounds and veterinary medicines are managed efficiently, regulatory controls are commensurate with the degree of risk, and business compliance costs are minimised.

Copyright (New Technologies and Performers' Rights) Amendment Bill
Government Bill, Hon Judith Tizard:

This is a large Bill that is the result of a recent review of copyright law that focused on its ongoing suitability, particularly in light of developments in new, particularly digital, technologies. Consequently, the Bill amends the Copyright Act to clarify the application of existing rights and exceptions in the digital environment and also seeks to create a more technology-neutral framework for the Act.

Criminal Justice Reform Bill
Government Bill, Hon Mark Burton

The Bill is intended to introduce a range of measures aimed at arresting the increase in the prison population in recent years. The Government claims it is not a retreat from earlier moves to have serious and persistent offenders punished more severely but the Bill seeks to improve consistency and transparency in sentencing and provides "a greater range of sentencing options to the courts in order to reduce the number of offenders sent to prison".

Education (National Standards of Literacy and Numeracy) Amendment Bill
Members' Bill, Hon Bill English
The Bill is intended to allow the Minister of Education to publish agreed national standards in literacy and numeracy, and to require schools to provide information in their annual reports about the progress of students in respect of any national standards in literacy and numeracy that have been published.

Education (Establishment of Universities of Technology) Amendment Bill
Members' Bill, Hon Brian Donnelly
The purpose of this Bill is to amend the Education Act 1989 to provide for the establishment of a new category of institutions, namely a university of technology. The addition of such a category will help to bridge a significant legal gap within the current structure of the tertiary educations sector, while also aiming to enhance flexibility and encourage differentiation.

Protection of Personal and Property Rights Amendment Bill
Government Bill, Hon Ruth Dyson
This Bill amends the enduring powers of attorney provisions in Part 9 and Schedule 3 of the Protection of Personal and Property Rights Act 1988. It is intended to strengthen the Act to better protect the welfare and rights of vulnerable people and replacing enduring power of attorney forms contained in the Act with prescribed forms in regulations.

Social Security (Entitlement Cards) Amendment Bill
Government Bill, Hon Winston Peters

This Bill makes amendments to the Social Security Act 1964 and the Birth, Deaths, and Marriages Registration Act 1995 to enable full effect to be given to the Government's intentions in regard to the Super Gold Card.

Social Security Amendment Bill
Government Bill, Hon David Benson-Pope

This Bill implements the Government's "Working New Zealand: Work Focused Support” programme. Primarily, it introduces a new "pre-benefit activity" requirement on unemployment benefit applicants and enhances current requirements for people subject to work-testing. There will also be planning and activity requirements for sickness and invalids beneficiaries (with exemptions) as well as activity requirements for those on the independent youth benefit.

Bills Defeated/Withdrawn

Employment Relations (Probationary Employment) Amendment Bill
Resource Management (Restricted Coastal Activities) Amendment Bill
Manukau City Council (Control of Graffiti) Bill 2005

Before Select Committee

Open for submissions

Submissions Closed

Bills Reported Back

Crimes (Abolition of Force as a Justification for Child Discipline) Amendment Bill
Law Reform (Epidemic Preparedness) Bill
Subordinate Legislation (Confirmation and Validation) Bill (No 2)
Telecommunications Amendment Bill
Te Pire Whiriwhiri Take Maori (Maori Purposes Bill)
Weathertight Homes Resolution Services Amendment Bill

Supplementary Order Papers

Energy Safety Review Bill 076 - Substantive amendment. Member in charge Harry Duynhoven. This SOP amends the Energy Safety Review Bill to align that Bill with a number of changes that have been recommended by the Commerce Committee in relation to the Plumbers, Gasfitters and Drainlayers Bill (see below).

Energy Safety Review Bill 077 - Motion to divide the Bill. Member in charge Harry Duynhoven. This SOP divides the Energy Safety Review Bill into the following four Bills; Electricity Amendment Bill, Gas Amendment Bill, Health and Safety in Employment Amendment Bill, and Ministry of Energy (Abolition) Amendment Bill.

Plumbers, Gasfitters, and Drainlayers Bill 078 - Substantive amendment. Member in charge Harry Duynhoven. This SOP amends clause 83A, 85, 92A, 95, 95A, 207, 207A, and 214. The amendments range from expressly broadening the scope of a clause (83A) to dealing with exemptions from registration and licensing requirements (clause 95A) as well as minor drafting changes.

Evidence Bill 079 - Substantive amendment. Member in charge Hon Mark Burton.
This SOP replaces the definition of 'document', corrects minor errors and omissions, clarifies the duty clause 88(1) and adds transitional provisions in case this bill comes into force before the Lawyers and Conveyancers Act 2006.

Bills Passed

Crimes (Intimate Covert Filming) Amendment Bill
Crimes of Torture Amendment Bill
Electricity Amendment Bill
Energy Safety Review Bill
Evidence Bill
Gas Amendment Bill
Health and Safety in Employment Amendment Bill
Ministry of Energy (Abolition) Amendment Bill
Plumbers, Gasfitters, and Drainlayers Bill

Assented

Companies Amendment Act (No 2) 2006
Dumping and Countervailing Duties Amendment Act 2006
Financial Reporting Amendment Act 2006
Friendly Societies and Credit Unions Amendment Act 2006
Geographical Indications (Wine and Spirits) Registration Act 2006
Insurance Companies' Deposits Amendment Act 2006
Ngati Mutunga Claims Settlement Act 2006
Social Security (Long-term Residential Care) Amendment Act 2006

Regulations

The New Zealand Special Service Medal (Erebus) Regulations 2006
Parliamentary Salaries and Allowances Determination 2006
Education (Export Education Levy) Regulations 2006
Legal Services Amendment Regulations 2006
Student Allowances Amendment Regulations (No 3) 2006
KiwiSaver Act Commencement Order 2006
KiwiSaver Regulations 2006
Superannuation Schemes (Fees) Amendment Regulations 2006
Trade Marks Amendment Regulations 2006
Income Tax (Approved Territories for Qualifying Foreign Equity Investor Definition) Order 2006
Judicial Salaries and Allowances Determination (No 2) 2006
Fisheries (Declaration of New Stocks Subject to Quota Management System) Notice 2006
Health Practitioners (Quality Assurance Activity---Bay of Plenty District Health Board) Notice 2006
Securities Act (Australian Registered Managed Investment Schemes) Exemption Amendment Notice 2006
Securities Act (Liontamer Investment Management Pty Limited) Exemption Notice 2006
Medicines (Deferral of Expiry of Part 7A) Order 2006
Social Security (Long-term Residential Care) Amendment Regulations (No 2) 2006
Petroleum Products Specifications Amendment Regulations 2006
Excise and Excise-Equivalent Duties (Tobacco Products Indexation) Amendment Order 2006

Committee Hearings

There were no meetings held this week as the House was in a one week recess. Last week's hearings focused mainly on financial reviews.

Tertiary sector

Tertiary Education Minister Michael Cullen has announced that legislation governing tertiary sector organisations is to be amended to reduce compliance costs within the sector and streamline planning and reporting requirements.

Changes to Residential Tenancies and Unit Titles Legislation

Building Issues Minister Clayton Cosgrove has announced changes to the Residential Tenancies Act 1986 to ensure fairer treatment for tenants, Changes are also proposed to the Unit Titles Act 1972 to establish a broader and more adaptable framework for multi-unit living.

The proposed changes to the Residential Tenancies Act include:

• limiting the liability of tenants for damage that they did not cause and could not reasonably have prevented; and
• extending the coverage of the Act and access to tenancy dispute resolution services to sectors of the community not currently protected

These latest proposals are in addition to other proposed changes to the Residential Tenancies announced in September this year.

The proposed changes to the Unit Titles Act takes account of the shifts in living patterns that will see an estimated 500,000 people living in apartments, townhouses and high-rise buildings in Auckland alone. According to the Housing Minster, the changes "will establish a broader and more adaptable means for setting up and managing multi-unit living".

Mr Cosgrove said the current Act is 34 years old and out of date with modern needs.

Key principles of the proposed new legislation include:

• clarity around the rights and obligations of unit owners and bodies corporate
• encouraging sound property management practices that will protect long-term value and investments
• making joint decision making by the body corporate easier
• effective ways to sort out problems and move forward
• making information more readily available to purchasers and unit owners so they can make informed choices
• making survey and title processes more streamlined for surveyors and developers
• allowing large, staged or complex developments to be set up and managed more easily.

Mr Cosgrove said he expects to introduce two separate Bills that reform both Acts into Parliament next year.

What's New

What's Current

New Zealand Institute Report - 'Competing to Win'

Competing to Win is the second of four detailed reports from the New Zealand Institute on improving New Zealand's economic weal. The report stresses the need for increased and sustained economic engagement with the world from exporting and outward foreign direct investment (FDI). Aggression and competitiveness are the Institute's core recipe.

Suggesting a strategy for achieving these characteristics, the report states that NZ's current situation is the result of history and our primary produce export focus. This has allowed NZ to export to many countries because we have not had to tailor sophisticated manufactured products to certain markets. The Institute observes that this will not, however, allow NZ to expand its economic activity. Its suggested focus is on our resources rather than pinning hopes on free trade negotiations.

The "external strategy" advocated by the Institute consists of three element: 1) an Asia-pacific focus; 2) the adoption of measurable outcomes for external economic engagement; and 3) in-market investment.

These are not radical ideas in and of themselves. Nonetheless the report argues that given our limited resources, NZ must concentrate its efforts and identify relationships that matter while being more competitive and knowing what success will look like.

KiwiSaver regulations approved

Regulations to establish KiwiSaver, the new workplace-based retirement savings scheme came into force on December 1.

Minister of Finance, Hon Dr Cullen, said the regulations will bring the KiwiSaver Act into force and allow KiwiSaver scheme providers to prepare for enrolling members on 1 July 2007.
The regulations deal with:

• the commencement of the KiwiSaver Act
• the terms of the Scheme Provider Agreement between providers and the Inland Revenue Department
• the steps scheme providers must take to verify the identity of a member of a scheme
• the fees payable to the Government Actuary to process applications for exemptions, conversions, registrations, transfers and other regulatory functions
• the fees KiwiSaver scheme providers may charge customers
• the statistical annual return scheme providers must submit to the Government Actuary.

Further information, including a Cabinet paper, is available at: www.med.govt.nz/kiwisaver

Schemes Of Arrangement

The Takeovers Panel has been exercised over recent months by the use of amalgamations or schemes of arrangement as a means of avoiding the Takeovers Code, even though the result would be the same as an offer made under the Code. The expedient allows companies to effect takeovers without the level of shareholder support that would otherwise be required.

The Panel released discussion documents in April and June seeking urgent public comment on the issue, with the Government hoping to fast-track changes to close the apparent loophole. The Business Law Reform Bill was seen as a handy vehicle, with the Panel proposing changes in a submission to the Commerce Select Committee when it was considering the Bill.

However, because the proposed changes were outside the scope of the Bill as it stood, they required the consent of all parties to proceed. National refused to back the changes on the basis they circumvented proper process that would allow the business community to comment on them.

Accordingly, the status quo will stand for now, but further moves can be expected in the near future. MED is currently looking at new ways to address the Panel's concerns, with Financial Sector acting manager Justine Gilliland commenting that "there is a reasonable sense of urgency on this".

Civil rights take second place … again

The US Department of Homeland Security wants background checks undertaken for all visitors entering the US. An extra-territorial violation of privacy that would not be countenanced by Americans domestically or when travelling abroad, the move is one of many encroachments on the personal freedoms and privacy of non-US citizens intended to enhance domestic security. The simple and consistent justification offered for these impositions is the 3,000 deaths caused by the terrorist attack on New York's Twin Towers.

If numbers are a driver of policy, these casualties contrast sharply with other US statistics, which last year included:

• 43,443 road-related fatalities and more than 3 million non-fatal injuries;
• 40,000 gun-related fatalities and an estimated 80,000 non-fatal gunshot wounds; and
• 15,000 deaths from AIDS.

In 2005 the budget for the Department of Homeland Security was US$40.2 billion.

Links

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