NEWS ON POLICY AND POLITICS
8 November, 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

Climate Change for Labour?
The release of UK economist Sir Nicholas Stern's report on climate change could not have been more timely or politically useful for a Labour Party desperately in need of something new on which to have the public focus. more...

You take a jump to the left
Although the pundits have been quick to cast Labour's new environmentalism as a consolidation of its hold on the centre ground, the Party most likely to suffer electoral damage from Labour's move looks to be the Greens. more...

And then a jump to the right
Lest a bid for the hearts and minds of green-leaning voters be interpreted as ceding the middle ground to National, Labour has been quick to reassert its interest in the concerns of business and 'mainstream' New Zealand. more...

And pull your knees in tight
After an extended delay, Local Government Minister, Mark Burton released the terms of reference for the independent inquiry into local body rates. more...

IN PARLIAMENT

Bills Introduced

Bills Reported Back

Bills Before Select Committee

Hearings

First Readings more...
Second Readings more...
Committee Stages more...
Third Reading more...
Acts Assented more...
Committee Hearings more...

LEGISLATION IN THE WINGS

IN CONSULTATION

IN OTHER NEWS

Climate Change for Labour?

Helen Clark entered the 90th Labour Party Conference with no less a task than revitalising a Party showing all the signs of policy and political exhaustion. The parade of scandals, testy impatience with dissent and rows over electoral spending have resulted in a growing credibility gap with the public and left Labour in desperate need of a new image, a new energy and a new direction.

In this regard, the release of UK economist Sir Nicholas Stern's report on climate change could not have been more timely or politically useful. Stern's revelations about impending global environmental collapse have provided what Labour strategists have been unable to sustain - a meaningful link between the government and with the concerns of the general public.

Certainly public consternation at the possibility of environmental disaster provides a convenient vehicle for casting government policies on carbon emissions, waste minimisation and water allocation as part of a meaningful attack on a dark and uncertain future.

No surprise then that words like "sustainability" "carbon reduction" and "bold action" have been resurrected. This time they have a resonance that the populist catch-phrases of the past, such as "innovation" and "economic transformation" have lacked. Demonstrating some of her former grasp of political opportunity, Clark has picked this as an election winner, or at the very least a welcome distraction for a public fixated on the Party's stumbling self-interest.

Certainly, the move has put National in the position of having to do a back-flip on its view of the science of global warming and raises the stakes in terms of presenting meaningful policies to counter Labour's responsible and forward-looking vision. It also wrests back from the opposition its early attempt to assert some ownership of the space of "New Zealand identity". If not a trump hand, it's good for a trick.

Ultimately, the test for Labour will be whether it can move from the rhetoric to practical action. Having asserted itself as the only credible political party to save the planet, it will now need to be seen to be doing so. Spin and a cynical regard for the political process are now commonplace and what's good on the cocktail circuit will not be good for the ordinary punters who know that the weather isn't what it was when they were kids and who (within limits) want something tangible done about it.

David Parker's forthcoming sustainable energy strategy will be the first opportunity for Labour to show that it means business. In so doing, it may find that it has a tiger by the tail.

You take a jump to the left

Although the pundits have been quick to cast Labour's new environmentalism as part of a consolidation of its hold on the middle ground, the Party most likely to suffer electoral damage as a result of Labour's "new" focus looks to be the Greens.

At the very least Labour has militated the risk of bleeding its disenchanted green support base and might even find itself winning a few back. This may account for Jeanette Fitzsimmons's lukewarm reception of Labour's position on climate change, although, to give Fitzsimmons her due, she will be genuinely concerned about the extent to which Labour's position is attributable to enlightenment rather than opportunism. The jockeying for who gets what as part of a coalition deal in 2008 is well and truly under way.

And then a jump to the right

Lest a bid for the hearts and minds of green voters be interpreted as ceding the middle ground to National, Labour has been quick to publicise an apparently tougher line on welfare abuse, whilst making noises about rebalancing the disparities in the employer/employee relationship, this time in favour of the employer. The Milestone Report into Quality Regulation has also proven a timely opportunity to assert a more "business friendly" approach.

And pull your knees in tight

After an extended delay, Local Government Minister, Mark Burton released the terms of reference for the independent inquiry into local body rates. Although the brief given to the inquiry team is described as broad, it is notable for relegation of the purposes, autonomy and/or structure of local government as items for review. The "principles of democracy, transparency, equity and accountability" are also off the menu, or at least the signal has been sent that the government would prefer not to deal with them. Instead, it seems, the inquiry seems to be largely directed toward finding new means of revenue raising for spend-thrift or over-burdened councils.

For those concerned with year-on-year rates inflation and the growing burden represented by local government, this will not be a welcome result. Government is clearly disinclined to deal with some of the fundamental issues of efficiency and effectiveness in the machinery of local government and the mandate under which it operates. The vague purposes provisions of the local government legislation, the over-extended consultation processes, and the inherent inefficiency of local body structures (in short the drivers of council costs and fiscal indiscipline) will, we are left to infer, all remain in place.

On a positive note, submissions are being invited and those interested should make the most of the opportunity. They should also feel unconstrained about the subjects they addressed. The terms of reference may be limited, but submissions need not be.

Bills Introduced

Foreshore and Seabed Act (Repeal) Bill (Member's Bill - Tariana Turia)

This Bill repeals the Foreshore and Seabed Act 2004 to return to the position prior to the passage of the Act.

Property Law Bill (Government Bill. Introduced 30/10/06)

The Bill is intended to reform the Property Law Act 1952. The Bill does not propose any wholesale changes to property law and is based largely on recommendations made by the Law Commission for the more user-friendly legislation for people buying, selling or mortgaging property. The Bill will apply to commercially leased property.

Reforms introduced in the Bill include:

• a requirement on mortgagees to notify other interested parties when exercising rights over a property on default and a provision; and
• unless otherwise agreed, commercial tenants will be required to leave a property in good condition at the end of a lease only if it was in good condition at the outset.

Subordinate Legislation (Confirmation and Validation) Bill (No 2) (Government Bill. Introduced 27/10/06)

The Bill confirms and validates subordinate legislation that, in accordance with the confirmation and validation provisions under which it is made, lapses at a stated time unless earlier confirmed or validated. Confirmations and validations are made in respect of the:

• Biosecurity Act 1993
• Commodity Levies Act 1900
• Customs and Excise Act 1996
• New Zealand Superannuation and Retirement Income Act 2001
• Social Security Act 1964
• Road User Charges Act 1997
• Tariff Act 1998
• War pension Act 1954.

Treaty of Waitangi (Removal of Conflict of Interest) Amendment Bill. (Members Bill - Pita Paraone)

The Bill removes the conflict of interest of having a serving Judge of the High Court or Maori Land Court (including the Chief Judge of the Maori Land Court) sit on the Waitangi Tribunal from the Treaty of Waitangi Act 1975.

Bills Reported Back

Business Law Reform Bill

The Bill was reported back from the Commerce Committee on 18 October.

The Bill includes amendments to five Acts — the Companies Act 1993, the Dumping and Countervailing Duties Act 1988, the Financial Reporting Act 1993, the Friendly Societies and Credit Unions Act 1982, and the Insurance Companies’ Deposits Act 1953. It also consequentially amends the Co-operative Companies Act 1996, the Corporations (Investigation and Management) Act 1989, the Reserve Bank of New Zealand Act 1989 and the Securities Markets Act 1988.

Matters addressed include:

• distribution of companies’ annual reports;
• qualifications of directors;
• exemption powers;
• recipients of money from conduit issuers;
• accounting periods to which amendments apply;
• qualifications for admissions as members of credit unions;
• reduction of compliance costs; and commencement provisions.

Issues identified as requiring further policy development are:

• the removal of filing requirements for small and medium-sized companies with 25% or more overseas ownership. A review of the 25% threshold is contemplated; and
• perceived loopholes in the application of the Takeovers Code.

Click here for a full copy of the Committee's report.

Employment Relations (Probationary Employment) Amendment Bill

The Transport and Industrial Relations Committee voted on compromise amendments proposed by Dr Wayne Mapp. The vote was lost. The committee then voted on the original Bill and, again, the vote was lost. The committee recommended by majority that the Bill not proceed.

Ngati Mutunga Claims Settlement Bill

The Bill is intended to give effect to the deed of settlement dated 31 July 2005 between the Crown and Ngati Mutunga as a final settlement of all the Ngati Mutunga historical claims in Taranaki. The Maori Affairs Committee which recommended that it be passed with the amendments shown.

Sale of Liquor (Youth Alcohol Harm Reduction) Amendment Bill SOP

The Law and Order Committee reported back on the original Member’s Bill in the name of Progressive MP Matt Robson, which aimed to minimise the harm caused to youth by alcohol by raising the drinking age. The committee recommended that the Bill be a conscience vote for Members of Parliament and that it be divided into two sections - one dealing with advertising on radio and television and the second with the drinking age and the purchase age issues. The committee recommend that it be passed with amendments.

National MP, Dr Wayne Mapp, is proposing a supplementary order paper (SOP) to make amendments to the Sale of Liquor BiIl that will split the drinking age, raising the age of those purchasing alcohol at off-licences to 20 but allowing 18 and 19-year-olds to drink on licensed premises.

The reading of the new Sale of Liquor Bill (Broadcasting) has been postponed until 1 May 2007 to align consideration with the advertising review underway at the Ministry of Health.

Taxation (Annual Rates, Savings Investment, and Miscellaneous Provisions) Bill (second interim report)

The Finance and Expenditure Committee continues to consider the Taxation (Annual Rates, Savings Investment, and Miscellaneous Provisions) Bill, in particular the taxing of offshore portfolio share investments, and recommended that the House take note of its second interim report.

The committee will invite certain individuals and organisations to make submissions on the
amending legislation. The closing date for submissions is 9 November 2006.

Before Select Committee

Open for submissions

Hearings

Health (Drinking Water) Bill submissions

The Health Select Committee has continued hearing submissions on the Health (Drinking Water) Amendment Bill. The committee heard what have become familiar themes from submitters, including concern at the implementation and compliance costs necessitated by the Bill and the lack of a robust cost benefit analysis.

The consistent view - not least among territorial local authorities - is that the Bill, while well-intentioned is impracticable, unreasonable, costly and not properly thought through. The Timaru District Council noted that in some communities to costs of compliance would amount to $26,000 a household and provide incentives for self supply. Several submitters questioned the need for the legislation given that there has been no major outbreaks affecting public health in New Zealand involving drinking water.

The New Zealand Water & Wastes Association, among others, noted the one-size-fits-all approach being taken, the divergent nature of drinking water suppliers and the costs to small communities notwithstanding the low level of contamination of New Zealand's water supplies.

This lack of enthusiasm will be unwelcome to the Bill's advocates in the Ministry of Health's Public Health Directorate, which recognises the Bill as a way of exerting greater control over local body management of water supplies.

Weathertight Homes Resolution Service Amendment Bill submissions

The Social Services Committee continued hearings into Weathertight Homes Resolution Service Amendment Bill. The need to limit the liability of councils and concerns about the qualification of assessors were dominant themes. The Committee also received a sobering reality check in the shape of one leaky building owner, whose unrecoverable losses exceed $500,000.

First Reading

Human Rights (Gender Identity) Amendment Bill

Second Reading

Crimes (Intimate Covert Filming) Amendment Bill
Crimes Torture Amendment Bill
Criminal Procedure Bill
CYF Amendment Bill (No 4)
Disabled Persons Employment Promotion (Repeal & Related Matters) Bill
Education (Establishment of Universities) Amendment Bill
Electoral (Reduction in Number of Members of Parliament) Amendment Bill
Energy Safety Review Bill
Evidence Bill
Immigration Advisers Licensing Bill
Ngati Mutunga Claims Settlement Bill
Oaths Modernisation Bill
Police Amendment Bill (No 2)
Residential Tenancies Amendment Bill
Residential Tenancies (Damage Insurance) Amendment Bill
Social Security (Long-term Residential Care) Amendment Bill
Statutes Amendment Bill (No 5)
Unsolicited Electronic Messages Bill
Veterinarians Bill

Committee Stage

Communications Legislation Bill (Committee stage interrupted)
Conservation (Protection of Trout as a Non-commercial Species) Amendment Bill (Stalled at committee stage)
Criminal Procedure Bill
CYF Amendment Bill (No 2)
Independent Police Complaints Authority Amendment Bill

Third Reading

Business Law Reform Bill
Climate Change Response Amendment Bill
Geographic Indications (Wine & Spirits) Registration Bill
Parental Leave and Employment Protection (Paid Parental Leave for Self-Employed Persons) Amendment Bill
War Pensions Amendment Bill - (3rd Reading Interrupted)

Acts Assented

Appropriation (Parliamentary Expenditure Validation) Act 2006
Reserve Bank of New Zealand Amendment Act 2006
Racing Amendment Act 2006
Telecommunications Amendment Act 2006
Radiocommunications Amendment Act
Securities Amendment Act
Securities Markets Amendment Act
Takeovers Amendment Act

Committee Hearings

Easter Sunday Shop Trading Amendment and Shop Trading Hours Act Repeal (Easter Trading) Amendment - Commerce Select Committee

Submissions on these bills continued, with the committee hearing from the New Zealand, Wellington and Wanaka Chambers of Commerce. The Chambers supported Easter Sunday shop trading and advocated its extension across the entire economy.

Sue Wells for the Christchurch City Council focused on the need for wider debate regarding whether people want to shop, and work, on Good Friday and Easter Sunday.

The Hospitality Association of New Zealand noted the anomalies that result from several localities holding partial exemptions from current requirements. Under the present framework a particular item can be bought from an exempt shop, such as a petrol station, but not from a type which must remain closed, such as a book shop.

Finally, Laila Harre, representing the National Distribution Union, noted that many employees feel entitled to a day off at Easter. She noted that changing the law in the way proposed by the bills would result in employees potentially having to work or face cuts in their hours.

Employment Relations (Probationary Employment) Amendment Bill - Transport & Industrial Relations Select Committee

Two individual submitters spoke in opposition to the bill. They addressed the committee from the perspective of the young and uneducated, and the disabled community. Both felt that the groups they purported to represent would lose rights of recourse and would be particularly badly affected by the bill. John Kerr, representing the National Union of Public Employees, reinforced these statements, saying vulnerable workers would be denied natural justice and have their rights reduced. Steve Hewitt from the Amalgamated Workers Union also said the shearing industry was particularly vulnerable, with many workers not having employment agreements and thus very few rights at present. Since most shearing contracts last fewer than 90 days, shearers would have almost no rights and would not be subject to any period of protection.

Andrew McComish from the recruitment industry, stated that the probation period would be useful for employers, particularly as the balance of power in the labour market currently favours employees. He suggested the addition to the bill of a mediation process for employees.

The Canterbury Manufacturers Association said that employers support the bill because it mitigates the risks of taking on new staff. Currently, poor employment decisions and grievance processes could cost small manufacturers significant amounts of money and were an emotional drain. Without the bill, increasing numbers of manufacturers would move production offshore.

Hearings continue.

Ticket Scalping & Ambush Marketing

The Government intends to introduce legislation that will ban ticket scalping for major events. The proposed ban will be included in a Bill that will also control ambush marketing. Both are aimed at making New Zealand a more attractive place to host major events - for the sponsors of those events and also for the sports and spectators involved. Penalties are proposed, including fines, the right to obtain injunctions (e.g. to stop on-line trading) and the right to require any person making any profit to hand over those profits to the ticket issuer.

Food Industry Regulatory Reform

The Government has agreed to Food Safety Authority proposals for New Zealand’s domestic food regulatory system.

The changes contemplated will cover government involvement in all aspects of the safety and suitability of food produced, processed, manufactured, transported and traded in New Zealand. All food sold in New Zealand is included, whatever its source and however it reached the point of sale, and whether for profit or for charity.

Drafting the changes to the law will now begin, and the transition to the new regime is expected to begin in July 2008 and take about five years to complete.

What's New

What's Current

Government to announce inquiry into workforce casualisation

This month is likely to see an announcement on a government-sponsored inquiry into workforce casualisation. The result of extended lobbying of the government by New Zealand First's Peter Brown, the inquiry is expected to have a broad terms of reference and has the potential to invite a reappraisal of the government's relatively hands-off approach to the flexible workforce. This possibility may well eclipse Brown's long-held and very specific ambition to address perceived abuses of casual employees on the waterfront - something with which, as a former stevedore, he is both familiar and passionate.

Quality Regulation Review Milestone Report Released

Minister of Commerce, Hon Lianne Dalziel, has released a copy of the Quality Regulation Review's first milestone report and said good progress was being made to identify and address barriers to business growth.

Ms Dalziel expected "tangible improvements" to be made for business, particularly where different regulatory frameworks have overlapping application or more than one regulator has jurisdiction,"

Among the specific issues the government will consider are:

• survey requirements on tourism operators;
• information requirements under the Gambling Act;
• specific licence requirements for liquor licence holders, such as multiple licence and renewal requirements; and,
• the provision of information across a range of laws but particularly HSE, HSNO and ACC.

National's Economic Development Spokesperson, Katherine Rich has criticised the report, noting the government's unwillingness to address abiding business concern with labour laws, the RMA and ACC, which, she say, the government has declared off-limits.

The www.businessconsultation.govt.nz website will continue to be available for submissions from individuals, and existing business networks, e.g. Chambers of Commerce, Business New Zealand, NZCTU and industry associations will continue to act as valuable conduits for input to the review.
any concerns.

Tax cuts off again?

Raising the spectre of service cuts and inflation as a direct consequences of tax cuts in next year's budget, Finance Minister, Michael Cullen, demonstrates his reluctance to offer what he has previously described as "hand-outs" to taxpayers. Speaking to an Auckland business audience, Dr Cullen said that:

"Maintaining a prudent fiscal policy is critical to prevent injecting further stimulus into the economy - which would only result in increasing these pressures, higher inflation and higher interest rates". Tax reform would have to be addressed within existing fiscal policy, he added.

Links

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