The Prime Minister's Address
The 2010 Parliamentary session began this week with the Prime Minister's address outlining the Government's plans for 2010.
With the ambition of leading "a step change in New Zealand's economic performance," Key outlined the Government's approach to tax reform, public administration, access to capital and exploitation of resources.
The focus of most public interest was upon tax reform and the Government's response to the Tax Working Group Report of last month.
Here Key departed from the usual, ruling "in" work on:
- changing the rules on property investment (details to be forthcoming in the Budget)
- raising GST to 15%, balanced by compensatory changes elsewhere
- making Working for Families "fairer"
- fattening the tax scale over time
and ruling "out":
- land tax
- a "comprehensive" capital gains tax
- risk free rate of return tax on residential property investment.
On the public service front, Key hinted at departmental consolidations and the merging of back office functions. Here his ambitions seem more likely to be frustrated, with informed sector watchers noting that administrative integration is two decades too late and that governments inevitably under-estimate the inertia that comes with the sectors' ingrained institutional politics.
Opening access to resources will also prove problematic as opposition parties play to increasingly deeply held concerns about the environment. Also, Key's express identification of water as a strategic commodity will feed longstanding conspiracy theories about privatisation, even if the resulting policy is directed to the enhancement of water storage in distressed catchments. Pulling these things off will be a delicate political task at best.
Finally, access to capital has also been identified as a central requirement for the Government's Step Change and on this front the Government's response to the Capital Market Development Taskforce will be released "in the next week or so".
Further detail on the roll out of tax reforms can be expected in the 2010 Budget, which will be delivered on 20 May.
Although he was short on detail, it was a reasonably solid performance by Key. His challenge now will be to transcend the political sloganeering that has become common when talking about economic transformation, at the same time as managing the politics involved.
Phil Goff began 2010 as the Government would have him carry on. Battered by the response to his attack on Māori interests, he opened the year with another political staple - "the over-paid". But where he might have played the envy card to have a go at corporates, he instead chose senior public servants.
It was a tactic that, once again, was not thought through - or if it was, it was one that did not take enough account of how it would be received.
At a time when the state sector needs to retain and attract able managers, the proposition that Government should not be prepared to pay to do so suggests that Labour continues to hold to the "never mind the quality, feel the width" approach that was characteristic of its previous term of office.
It struck the wrong chord - and not just with public servants. The solipsism of the implied suggestion that someone ought not to be paid more than a senior politician is something that will stick in many a craw.
Missing from Goff's rhetoric was any substantive comment about the Government's well-telegraphed reform agenda. It was the only game in town and, apart from a thoughtful comment on the desirability of raising the fiscal threshold, the political opportunity it presented was left begging. The Opposition came late to the Ball.
The prospect, for example, of a land tax could have been seized upon as an immediate political bonanza. Even those in Labour's ranks excited by the prospect of the Government opening a door that they could jemmy wider when in office would have bitten their tongues in the interests of reaping the benefit of playing on people's concerns.
The downside impact of land taxes and the prospect of GST hikes on those on fixed incomes or exposure to land - farmers, Māori and the retired not least among them - was there to be exploited.
Effectively managed, the credit for Key's eventual decision to back away from land and capital gains taxes could have been Goff's to claim. And where backing off was not on the cards, such as with GST, he would have had in his hands a sizeable club with which to thrash National right up to the next election.
But the chance for him to look proactive passed. Certainly, Goff will be able to get in plenty of licks as the Government tries to persuade the electorate that its plans will deliver benefits for all, but he will not be as credible or forceful as he might have been.
Parliamentary Sitting Dates 2010
The House is scheduled to sit on the following dates in 2010:
February: 9, 10 and 11; 16, 17 and 18; and 23, 24 and 25.
March: 16, 17 and 18; 23, 24 and 25; and 30 and 31.
April: 1; 20, 21 and 22; and 27, 28 and 29.
May: 4, 5 and 6; 18, 19 and 20; and 25, 26 and 27.
June: 1, 2 and 3; 15, 16 and 17; 22, 23 and 24; and 29 and 30.
July: 1; 20, 21 and 22; and 27, 28 and 29.
August: 3, 4 and 5; 17, 18 and 19; and 24, 25 and 26.
September: 7, 8 and 9; 14, 15 and 16; and 21, 22 and 23.
October: 12, 13 and 14; 19, 20 and 21; and 26, 27 and 28.
November: 9, 10 and 11; 16, 17 and 18; and 23, 24 and 25.
December: 7, 8 and 9; and 14, 15 and 16.
Three Strikes Law Gets a Second Life
The ACT Party continues to get solid mileage out of its relationship with National, this time by garnering Government support for a new version of its "three strikes" sentencing law. Under the revised proposal, a third conviction for certain categories of offence will result in the maximum sentence with no eligibility for parole.
ACT's original proposition of a life sentence with a minimum of 25 years in prison attracted heavy criticism, not least from the New Zealand Law Society and criminal barristers. The revised version will be no more popular and will likely turn into a political distraction when the Government has plenty of other things to worry about. Flashpoints will include the proposition that more types of offending may be considered "strikes", and the potential violence that the "reform" may do to fundamental human rights. The extent of the criticism will become clear when the redrafted Bill is released.
Significantly it was Minister of Corrections Judith Collins who announced the Government decision to back the Bill, not the Minister formally in charge of the Bill, Justice Minister Simon Power. The fact that Power chose to pass the torch to Collins on this one is a reliable indication he at least sees no mileage in the Bill and Cabinet is far from united in its support for the measure.
The Sentencing and Parole Reform Bill that contains the original proposal will now be re written and the Law and Order Select Committee will undertake fresh consultation on the new drafting. The Attorney-General will also re examine the new Bill for compliance with the Bill of Rights Act, having made only an interim report on the original Bill's compliance with that Act.
With Parliament in recess, there are no new Bills or Bills to Select Committee.
Bills To Select Committee
Open for submissions
Bill |
Select Committee |
Submissions close (2010) |
Report due (2010) |
Education (Freedom of Association) Amendment Bill |
Education and Science |
31 March |
28 May |
Electricity Industry Bill |
Finance and Expenditure |
26 February |
15 June |
Fair Trading (Soliciting on Behalf of Charities) Amendment Bill |
Commerce |
19 March |
9 June |
Human Assisted Reproductive Technology (Storage) Amendment Bill |
Health |
19 February |
8 June |
Insurance (Prudential Supervision) Bill |
Finance and Expenditure |
10 February |
8 June |
Local Government (Auckland Law Reform) Bill |
Auckland Governance Legislation |
12 February |
4 May |
Ngāti Apa (North Island) Claims Settlement Bill |
Māori Affairs |
15 January |
17 March |
Statutes Amendment Bill |
Government Administration |
11 February |
1 April |
Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Bill |
Finance and Expenditure |
10 February |
8 June |
Whanganui Iwi (Wanganui (Kaitoke) Prison and Northern Part of Wanganui Forest) On-account Settlement Bill |
Māori Affairs |
15 January |
19 March |
Submissions not yet called
Land Transport (Driver Licensing) Amendment Bill
Marine Reserves (Consultation with Stakeholders) Amendment Bill
Submissions closed
Bill |
Select Committee |
Report due (2010) |
Arms Amendment Bill (No 3) |
Law and Order |
26 February |
Dairy Industry Restructuring (Raw Milk Pricing Methods) Amendment Bill |
Primary Production |
2 March |
Electoral (Administration) Amendment Bill |
Justice and Electoral |
27 April |
Franklin District Council (Contribution to Funding of Museums) Amendment Bill |
Local Government and Environment |
30 April |
Injury Prevention, Rehabilitation, and Compensation Amendment Bill |
Transport and Industrial Relations |
12 February |
Limitation Bill |
Justice and Electoral |
4 February |
Marine Reserves Bill |
Local Government and Environment |
30 December |
Patents Bill |
Commerce |
30 March |
Private Security Personnel and Private Investigators Bill |
Justice and Electoral |
30 March |
Public Works (Offer Back of and Compensation for Acquired Land) Amendment Bill |
Local Government and Environment |
17 June |
Sale and Supply of Liquor and Liquor Enforcement Bill |
Justice and Electoral |
30 June |
Sale of Liquor (Objections to Applications) Amendment Bill |
Social Services |
30 June |
Search and Surveillance Bill |
Justice and Electoral |
1 May |
Sentencing and Parole Reform Bill |
Law and Order |
30 March |
Sustainable Biofuel Bill |
Local Government and Environment |
29 July |
Waikato-Tainui Raupatu Claims (Waikato River) Settlement Bill |
Māori Affairs |
30 June |
Bills Awaiting Second Reading
Antarctica (Environmental Protection: Liability Annex) Amendment Bill
Appropriation (2008/09 Financial Review) Bill
Aquaculture Legislation Amendment Bill (No 2)
Carter Observatory Act Repeal Bill
Children, Young Persons, and Their Families Amendment Bill (No 6)
Children, Young Persons, and Their Families (Youth Courts Jurisdiction and Orders) Amendment Bill
Dog Control Amendment Bill (No 2)
Education Amendment Bill
Electricity (Continuance of Supply) Amendment Bill
Infrastructure Bill
Inquiries Bill
Judicial Matters Bill
Māori Trustee and Māori Development Amendment Bill
Motor Vehicle Sales Amendment Bill
Oaths Modernisation Bill
Privacy (Cross-border Information) Amendment Bill
Public Health Bill
Radio New Zealand Amendment Bill
Rail Network Bill
Regulatory Improvement Bill
Regulatory Responsibility Bill
Reserves and Other Lands Disposal Bill
Residential Tenancies Amendment Bill
Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill
Therapeutic Products and Medicines Bill
Trade Marks (International Treaties and Enforcement) Amendment Bill
Trade (Safeguard Measures) Bill
Trustee Amendment Bill
Unit Titles Bill
Waka Umanga (Māori Corporations) Bill
Bills Awaiting Third Reading
Cultural Property (Protection in Armed Conflict) Bill
Gambling Amendment Bill (No 2)
Māori Commercial Aquaculture Claims Settlement (Regional Agreements) Amendment Bill
None
Customs and Excise (Specified AANZFTA Parties) Amendment Order 2009
Deposit Takers (Credit Ratings) Regulations 2009
Dietary Supplements Amendment Regulations 2010
Major Events Management (U19 Cricket World Cup 2010) Order 2009
Parliamentary Service (Additional Parliamentary Precinct) Resolution 2009
Securities Act (Credit Unions) Exemption Notice 2010
Securities Act (Gulf Harbour Marina) Exemption Notice 2010
Securities Transfer (Approval of Austraclear New Zealand Electronic Registries Interface System) Order 2010
Takeovers Code (L&M Energy Limited) Exemption Notice 2010
Tariff (Specified AANZFTA Parties) Amendment Order 2009
Following the Prime Minister's speech outlining the Government's intentions for the year is a 15 hour general debate. It is likely the Government will give priority to the first readings of the Financial Service Providers (Pre-Implementation Adjustments) Bill, and the Securities Trustees and Statutory Supervisors Bill.
There have been no public Select Committee hearings.
The Victoria University of Wellington Tax Working Group was established in 2009 to assist the Government with key tax issues for New Zealand going forward. The Group included private sector and academic experts as well as public sector officials and released its Report on 20 January. The Report emphasises that the New Zealand tax system relies heavily on taxes most harmful to growth, including corporate and personal tax.
The Group identified that the current tax system requires significant changes to reduce uncertainty and become economically and politically sustainable. Some of the key recommendations are:
- aligning the company, top personal, and trust tax rates;
- reducing personal tax rates;
- ensuring the company tax rate is competitive with other countries, specifically Australia;
- retaining the imputation system;
- targeted base broadening in areas that are currently under-taxed, such as taxing returns from capital invested in residential rental properties (which is of course controversial);
- removing the 20 percent depreciation loading on new plant and equipment;
- removing tax depreciation on buildings if empirical evidence shows that they do not depreciate in value;
- changing thin capitalisation rules by lowering the safe harbour threshold to 60 percent;
- introducing a low-rate land tax; and
- increasing GST to 15 percent, accompanied with compensation to those on lower incomes.
The full text of the Report can be found here.
Submissions Closing on Emissions Trading Scheme Allocation
Submissions to the Ministry for the Environment on the industrial allocation under the Emissions Trading Scheme close on Friday 12 February. The Government intends to initially allocate units to protect firms that are emission intensive or trade exposed. Among other things, the consultation seeks information from those who consider that they qualify for an allocation.
A review of the initial allocation is planned for 2011, with further ongoing reviews planned in order to refine allocations over time.
More information on the consultation can be found here.
Phase Two of the RMA Reforms
The Government has created two technical advisory groups (TAGs) to undertake work that will contribute to Nationals' second phase of reform to the Resource Management Act. The Urban TAG is due to report proposals for the reform of the urban planning and design mechanisms on 31 March. A separate Infrastructure TAG is due to report proposals for the reform of the infrastructure provisions in the RMA and related legislation, such as the Public Works Act, on 30 June.
Further details on the membership and terms of reference of the TAGs can be found here.
Cartels May Be Criminalised
The Ministry of Economic Development (MED) is considering bolstering New Zealand's anti-competition laws by criminalising cartels. The United States, the United Kingdom, Canada, Australia, Japan and Korea have all already criminalised cartel conduct. The Government has already committed to ensuring people who engage in anti-competitive behaviour in Australia or New Zealand face the same penalties, as part of the Single Economic Market agenda.
The MED has released a discussion document that, among other things, seeks views on the difficult issue of defining cartel behaviour in legislation. The document can be found here. Submissions are due by 31 March.
Human Rights and Treaty of Waitangi Consultation
The Human Rights Commission has released a discussion document for the next New Zealand Action Plan on Human Rights. A key focus of the document, Human Rights and the Treaty of Waitangi, is to improve the human rights of Māori in accordance with international law and the Treaty of Waitangi.
In reviewing the status of Human Rights and the Treaty, there are seven priorities for action by government and society proposed:
- Examine constitutional arrangements: review the laws that form New Zealand's constitution to ensure they uphold the Treaty and that indigenous rights and human rights are recognised. This will no doubt take place in the constitutional review that National has planned for 2010.
- Promote public awareness: increase public understanding of the Treaty and indigenous rights.
- Strengthen existing forum and process: for the engagement between tangata whenua and the Crown.
- Explore new pathways: develop and implement new pathways to partnership between tangata whenua and the Crown.
- Settle the past: conclude historical breaches of the Treaty fairly and promptly.
- Focus on children and their families: ensure all children enjoy the rights set out in the Treaty of Waitangi and other international agreements.
- Explore indigenous rights implications in the wider Pacific.
The document calls for comment by 19 March 2010, and can be found here.
Workplace Health and Safety Strategy
A Report reviewing the Workplace Health and Safety Strategy for New Zealand to 2015 has been released, highlighting key actions to reduce workplace deaths and accidents. The Report makes a number of recommendations, based on feedback from stakeholders, including:
- reaffirming and rejuvenating the Strategy;
- developing a three year national action agenda by March 2010;
- building and strengthening monitoring and measurement capacity; and
- maintaining the Workplace Health and Safety Council.
The Department of Labour will be responsible for ensuring the Strategy is progressed through its next phase. The agenda setting for this next phase of the Strategy is aimed to be completed by March 2010 and the national action agenda implementation will occur between 2010 and 2013.
Technical Company Law Reforms On the Horizon
Officials have been instructed to investigate whether the process of registering a company in New Zealand should be changed. Minister of Commerce Simon Power has asked specifically for advice on whether:
- companies should be required to provide a tax number upon registration;
- companies registered in New Zealand should have at least one director who is resident in New Zealand (this is the case in Australia, Canada, and Singapore);
- the Registrar of Companies should have the power to request further information from directors to verify their identities; and
- the Registrar should have a power to suspend the registration of companies when there are concerns about the integrity of information provided or the people involved.
Power has said that any reforms will be carefully considered. In particular, he does not want to impede the operation of legitimate businesses.
This review seems to be motivated in part by the registration of SP Trading Ltd, a company registered in New Zealand to an Auckland address that allegedly chartered a plane intercepted in Thailand on its way to delivering 35 tonnes of North Korean explosives and anti-aircraft missiles to Iran.
Who |
What |
By when… (2010) |
Code Committee for Financial Advisers |
Continuing professional training for Authorised Financial Advisers |
12 February |
Commerce Commission |
Draft Guidance on Telecom's non-discrimination obligations |
19 February |
Department of Conservation |
Foliar Browse Index (FBI) manual |
31 March |
Ministry of Economic Development |
Criminalisation of cartels |
31 March |
Ministry of Education |
Review of legislation for institutions at risk and the associated Gazetted criteria |
21 February |
Review of special education |
19 March |
Ministry for the Environment |
Discount regulations under the RMA |
5 February |
Regulations to make the RMA Survey of Local Authorities mandatory and subject to timeframes |
5 February |
Environmental Risk Management Authority |
Group standard for pharmaceutical active ingredients |
11 March |
Ministry of Fisheries |
In-season review of Southern Bluefin Tuna (STN 1) |
12 February |
Application for three mataitai reserves at Mahia Peninsula |
17 February |
Review of sustainability measures for Surf Clams Stocks in QMA 2 and QMA 3 |
22 February |
Application for a mataitai reserve at Marokopa |
24 February |
New Zealand Food Safety Authority |
Recognising agencies and persons under the Animal Products Act 1999, the Wine Act 2003, and the Agriculture Compounds and Veterinary Medicines Act 1997 |
18 February |
Food Standards Australian New Zealand |
Primary production and processing requirements for raw milk products |
24 February |
Human Rights Commission |
Status of human rights and the Treaty of Waitangi |
19 March |
Inland Revenue Department |
Ability of a New Zealand resident partner of an Australian limited partnership to claim foreign tax credits |
12 February |
Treatment of employee-related payments |
12 February |
Ministry of Health |
Criteria for regulating health professions |
5 March |
Department of Labour |
Safe use of ATVs on New Zealand farms |
13 February |
Reserve Bank |
Liquidity requirements for the non-bank deposit takers |
15 March |
New Zealand Transport Agency |
Driver licensing and driver testing fees |
26 February |
Who |
What |
By when… (2010) |
Ministry of Agriculture and Forestry |
The future of the pro-competition regulatory regime in the New Zealand dairy industry |
12 February |
Department of Building and Housing |
Updating standards in 11 different compliance documents |
15 February |
Commerce Commission |
Draft guidelines on treatment of divestment undertakings as part of a merger or acquisition application |
12 February |
Department of Conservation |
Kauri National Park proposal |
tbc |
Draft Guidelines for Aircraft Access for Canterbury Conservancy |
Ongoing |
Electricity Commission |
Approach to domestic retail contracting arrangements |
19 February |
Ministry for the Environment |
Industrial allocation under the Emissions Trading Scheme |
12 February |
Environmental Risk Management Authority |
Amendments to Hazardous Substances assessment framework |
19 February |
Data requirements for evaluating the effects of pesticides on bees and other beneficial invertebrates |
26 February |
Ministry of Fisheries |
Replacing the 2006 seabird scaring devices circular |
15 February |
New Zealand Food Safety Authority |
Implementation of a new Food Act |
12 February |
New Zealand (Maximum Residue Limits of Agricultural Compounds) Food Standards 2009 |
22 February |
Ministry of Justice |
Criminal Procedure Simplification Bill Plan |
1 March |
A Focus on Victims of Crime: A Review of Victims' Rights |
31 March |
Law Commission |
Review of the Official Information Act - developing an Issues Paper |
15 February |
Māori Affairs Select Committee |
Inquiry into the operation of the Māori Community Development Act 1962 |
12 February |
Standards New Zealand |
In-service safety inspection and testing of electrical equipment |
12 February |
Safety inspection and testing for repaired electrical equipment |
26 February |
Safety inspection and testing for second-hand electrical equipment |
26 February |
Electrical cables |
26 February |
Pool water quality |
26 February |
Fire detection and alarm systems in buildings |
11 March |
