14 December 2011

From the Public Law & Policy Team

This is the final edition of Watching Brief for 2011. Our thanks to our readers for your constructive and positive feedback during the year. It has been appreciated.

We trust that you will have a safe and enjoyable holiday season. Watching Brief will resume when Parliament reconvenes in the New Year.

Best wishes,
Ed.

In this edition:

MATTERS OF OPINION

Solo seeks BFF view M
John Key's post election flush had barely left his face before the Commentariate was pronouncing on the inevitability of his defeat in 2014. And arguably with good reason. more...

New Labour leaders
David Shearer has been elected leader of the Labour Party, with Grant Robertson the deputy. Both men represent a break from the old guard, having only entered Parliament in the last term. more...

POST-ELECTION NEWS

Ministers announced
John Key has announced his new line up of Ministers. The departure of Georgina te Heuheu, Wayne Mapp and Simon Power provided the need for new Ministers, and there has also been a re-shuffle of some portfolios. more...

Support party agreements
Over the course of last week, National Party Leader John Key announced confidence and supply agreements with ACT, United Future and the Māori Party. more...

Official election results
The Electoral Commission has announced the official results of the general election, after a recount of all votes cast on polling day and having counted the special votes. more...

Review of MMP in 2012
The Electoral Commission will embark on a review of MMP given that the outcome of the referendum on the electoral system is that MMP will be retained. more...

IN OTHER NEWS

CLIMATE CHANGE AND EMISSIONS TRADING UPDATE

 

 

PROGRESS OF LEGISLATION

IN THE WEEK AHEAD

IN CONSULTATION

Matters of Opinion

Solo seeks BFF view M

John Key's post election flush had barely left his face before the Commentariate was pronouncing on the inevitability of his defeat in 2014. And arguably with good reason.

Lacking a political partner capable of delivering numbers over the long-term, National seems to have little to fall back on after the current term. United Future won't survive the retirement of Peter Dunne and ACT is unlikely to experience a liberal revival under Banks' stewardship, even if his party's management board will have reason to be pleased with the policy concession chivvied out of National in the party's confidence and supply agreement.

But a commitment to continue work on the Regulatory Standards Bill and the introduction of a legislated spending cap doth not a spring of classical liberalism make. In the end Banks is a Tory with more in common with Colin Craig's Conservative Party than with his core constituency. This is not lost on ACT's founding members who see in Banks' foreshadowed 'rebranding' of the Party the basis of an ideological shift that will alienate the deep pockets who have kept ACT going in spite of itself.

The possibility that ACT's disaffected liberals will look for another political home and, not finding one, build a new political organisation ought not to be discounted. However given that the Conservative's Colin Craig may be reluctant to play Sancho to Banks' Quixote, the more likely scenario is of a continuation of the status quo; one that is unlikely to see ACT return to its heady days of 7.1% support and a Parliamentary presence that owed considerably less to the vagaries of National's grace and favour.

So, is that it? Does National soldier on to inevitable defeat in the face of a recovering Labour and Green militantism? Well, yes, if you discount the Māori Party.

The pundits certainly have. Labelling the Māori Party as the losers of the 2011 election they have returned to what may be a tired set of assumptions about the nature of the Māori constituency and, in particular, its preferred status as client to Labour's patron. But is that valid? The Māori constituency is an evident plurality and one which arguably is reflected in the current split in the Māori seats. There is a place for a centrist political voice and the pragmatic aspiration of always being the Party of Government.

The Māori Party's problems, though, are different ones. Most significant among them is its capacity to survive the departure of co-leaders Tariana Turia and Pita Sharples in 2014. But that is an altogether different story and one that will hinge on the extent to which Te Ururoa Flavell can make the transition from MP to credible political leader. He will be given some help by the confidence and supply agreement with National that will allow the Māori Party more flexibility on contentious policy issues, the mixed ownership model for stated-owned assets being a notable case in point.

Key for his part sees 2014 as a 50/50 proposition. Senior MPs report that he is under no illusions, but that equally he is ready to abandon incrementalism, push hard on asset sales and let the chips fall where they may.

New Labour leaders

David Shearer has been elected leader of the Labour Party, with Grant Robertson the deputy. Both men represent a break from the old guard, having only entered Parliament in the last term.

Shearer proclaimed "I am a fresh face for Labour and I represent a fresh start for New Zealand." We will see next week whether his front bench also comprises fresh faces. If the speculation is correct, Shearer will face some tough decisions about whether the senior MPs who supported him should be relegated to the back benches to keep up the rejuvenation message, or rewarded for their support with senior roles.

Care is also needed to ensure the separate voting blocs do not become enduring factions within caucus, turning the re-building into in-fighting. The positions given to the other leadership contenders David Cunliffe and Nanaia Mahuta will be important in managing that risk.

For all the introspection, Labour will also have to watch its flanks from the large Green and New Zealand First caucuses that join it on the Opposition benches. If it spends too much time navel gazing, Labour could lose the limelight to those parties, but also needs to manage relationships with them carefully, as they will be key to Labour's chances of success at the 2014 election.

Shearer will also face a tough and very public challenge next week leading the debate of no confidence in the Government, a task that Cunliffe would have relished. As well as re-building his party, he must make a good first impression as Leader of the Opposition.

A week is a long time in politics, and Shearer is in for one his toughest weeks yet.

Post-Election News

Ministers announced

John Key has announced his new line up of Ministers. The departure of Georgina te Heuheu, Wayne Mapp and Simon Power provided the need for new Ministers, and there has also been a re-shuffle of some portfolios.

Hekia Parata receives Education from Anne Tolley, who in turn inherits Judith Collins' former portfolios of Police and Corrections. Collins receives ACC (formerly Nick Smith) and Justice (formerly Simon Power). The ACC portfolio will be challenging, given the upcoming reform to introduce completion into the Work Account.

Gerry Brownlee keeps Canterbury Earthquake Recovery, and picks up Transport from Steven Joyce. Joyce receives Economic Development (formerly Brownlee), Science and Innovation (formerly Wayne Mapp) and the re-named Tertiary Education, Skills and Employment.

Paula Bennett has kept the Social Development portfolio and will lead the welfare reforms.

Nathan Guy and Craig Foss have been promoted from outside- to inside-Cabinet, and Amy Adams is also a new Cabinet Minister, picking up the Communications and Information Technology portfolio. Maurice Williamson remains a Minister outside Cabinet, now joined there by Chris Tremain, Jo Goodhew and Chester Borrows.

The full Ministerial list can be found here.

Support party agreements

Over the course of last week, National Party Leader John Key announced confidence and supply agreements with ACT, United Future and the Māori Party.

ACT's and United Future's agreements commit those parties to supporting National with confidence and supply, and in passing legislation to effect to policies outlined in National's Post-Election Action Plan. In contrast, the Māori Party has agreed to support the National-led Government on confidence and supply only. National with ACT and United Future have 61 out of 121 seats, enough to pass legislation without the Māori Party.

National's legislative priorities identified in its Action Plan include:

The full Plan can be accessed here.

In return for their support, ACT, United Future and the Māori Party each received the following:

ACT

John Banks gains the following ministerial positions:

He will also be appointed as a member of the Expenditure Control Cabinet Committee, the Economic Growth and Infrastructure Cabinet Committee, and the Appointments and Honours Cabinet Committee.

National and ACT agree to work together on the following reforms (amongst others):

The National-ACT confidence and supply agreement can be found here.

United Future

Peter Dunne has been reappointed as Minister of Revenue and the Associate Minister of Health, and newly appointed as Associate Minister of Conservation.

National and United Future agree to work together to promote some of the broad principles and policies advanced by United Future, including the following:

The National-United Future confidence and supply agreement can be found here.

The Māori Party

Tariana Turia gains the following ministerial positions:

She will also be appointed as a member of the Social Policy Cabinet Committee, the Appointments and Honours Cabinet Committee and the Treaty of Waitangi Cabinet Committee.

Pita Sharples is reappointed as Minister of Māori Affairs, Associate Minister of Education and Associate Minister of Corrections. He will also be appointed as a member of the Social Policy Cabinet Committee, the Economic Growth and Infrastructure Cabinet Committee and the Treaty of Waitangi Cabinet Committee.

National agrees to implement the following policies advanced by the Māori Party:

The National-Māori Party confidence and supply agreement can be found here.

Official election results

The Electoral Commission has announced the official results of the general election, after a recount of all votes cast on polling day and having counted the special votes:

Party

Seats

National

59

ACT

1

United Future

1

Māori Party

3

Labour

34

Green Party

14

New Zealand First

8

Mana

1

TOTAL

121

 

The election was closer than it may seem: If either John Banks or Peter Dunne had failed to win their respective electorate seats, then Labour would have picked up another list seat and National would then need to rely on the Māori Party to govern and to pass its mixed ownership model legislation.

The key changes from the preliminary election night count are as follows:

There has already been a judicial recount in Christchurch Central, where Nicky Wagner was confirmed by 47 votes (the first official count had her winning by 45 votes). A judicial recount in Waitakere is underway. In a judicial recount a District Court Judge, or his/her appointed officer, supervises the recounting all votes and can remake any decision of the Returning Officer, such as decisions on which special votes are valid and which votes are 'informal' and so do not count towards any candidate.

The full Ministerial list can be found here.

Review of MMP in 2012

The Electoral Commission will embark on a review of MMP given that the outcome of the referendum on the electoral system is that MMP will be retained. Under the Electoral Referendum Act 2010, the Commission must conduct a review to determine, through a public consultative process, whether changes to MMP are necessary or desirable and to make any recommendations for changes to the Minister of Justice.

The Commission will call for submissions in mid-February and hold public hearings in April and May. It will then release a proposals paper in August for further public comment, before making issuing its final report by 31 October 2012.

The Commission must consider the following issues:

The official result of the referendum was as follows:

Part A - Should New Zealand keep the Mixed Member Proportional (MMP) voting system?

Part B - If New Zealand were to change to another voting system, which voting system would you choose?

In Other News

Regulatory Standards Bill gets a new life

Under the National-ACT confidence and supply agreement, Hon John Banks, in his role as Minister of Regulatory Reform, will recommence work on the Regulatory Standards Bill with the Minister of Finance "... to achieve a mutually agreed outcome, based on the Treasury's preferred option (option 5), for enacting within the next 12 months." Accordingly, provided that there is an outcome that can be "mutually agreed" between National and ACT, we can expect a modified Bill to be enacted before the end of 2012.

Treasury's option 5 focuses on strengthening Parliament's review of proposed legislation, and does not give any role to the courts. Ministers would have to draw attention to any bad features contained in proposed legislation, based on a list of matters drawn from existing Legislation Advisory Committee guidelines. This option is modelled on Queensland’s Legislative Standards Act, which requires proposed legislation to be accompanied by explanatory notes containing certain details, including an assessment of consistency with listed "fundamental legislative principles".

For more detail, see our latest Regulatory Alert.

Health Sponsorship Council survey shows support for alcohol regulation reforms

A report of a survey on New Zealanders' attitudes to alcohol reform has been released under the Official Information Act. The Ministry of Health commissioned the report last year, to inform the proposed reform of alcohol legislation. It was conducted by the Health Sponsorship Council, a Crown entity best known for its "smokefree" and "Sunsmart" campaigns.

The survey polled 1,740 participants on their attitudes towards alcohol consumption, its present regulation, and possible reform. The final report was described by Professor Doug Sellman, Director of the National Addiction Centre at Otago University, as the most comprehensive survey on alcohol attitudes in New Zealand he has ever seen. However, the document has never been made available to the public, or to the Select Committee charged with review of the Alcohol Reform Bill.

Although a chief proponent of reform, even Professor Sellmann was surprised that the swing in public attitudes had been so overwhelming. The report found that:

Interviews for the main survey were conducted between May and late August 2010.

The draft results were sent to the office of the Associate Minister of Health, Hon Peter Dunne, last year, with a request for a further $10,000 to peer review and finalise the report. The Minister declined, stating that the money could be better spent elsewhere.

Following the release of the report, Mr Dunne has stood by his decision, and has released a statement that the report was "essentially consistent with the range of public views readily available from other sources". In contrast, Professor Sellmann described the report as "critical to inform a once in a generation reform process".

Significantly, the report indicates substantial public support for the Law Commission's recommendations on alcohol reform that have been resisted by the Government, including an increase in the price of alcohol excise tax. The Government intends to pass the Alcohol Reform Bill this term, and the report will likely place more pressure on its decision to avoid price regulation.

The FMA's strategic priorities

The Financial Markets Authority (FMA) has released a report which outlines stakeholders' views on the effectiveness of financial markets regulation in New Zealand and formed the basis of the FMA's recently released Statement of Intent.

The Report, "Roadmaps for financial regulation", was prepared by management consultants Oliver Wyman on behalf of the FMA. Stakeholder research was conducted at the start of the year, around the time of the FMA's establishment.

The interviews and surveys with industry, government and other market stakeholders revealed the need for:

FMA Chief Executive Sean Hughes said that the strategic implications of the research findings informed the writing of the organisation's Statement of Intent 2011-14, released by the FMA in October.

The full Report can be found here. The Statement of Intent can be found here.

OAG reports on public private partnerships

The Office of the Auditor-General (OAG) recently reviewed New Zealand's public private partnership (PPP) environment. Specifically, the OAG looked into the implications that an ongoing programme of PPPs would have on the public sector. Its findings are summarised in the OAG's Report, "Managing the implications of public private partnerships".

The Government has indicated that it intends to focus on the use of PPPs as a way to build infrastructure and to encourage innovation in public service delivery. For example, in 2009 the Government established the National Infrastructure Unit (NIU) within Treasury to guide government agencies in preparing PPPs. Two pilot PPP projects have since been launched with the support of the NIU (Wiri Prison and two schools at Hobsonville Point).

The OAG's Report highlights that an ongoing programme of PPPs will require:

The Report is not a formal consultation document. Its purpose is to enhance understanding of the Government's proposal to build infrastructure through an ongoing programme of PPPs and to inform debate.

The full Report can be found here.

Conservation Authority identifies challenges to freshwater preservation

The New Zealand Conservation Authority recently investigated New Zealand's rivers to identify the challenges posed to balancing interests in using and protecting freshwater. It produced a report, Protecting New Zealand's Rivers, which presents constructive methods for river protection designed to attract governmental support. The proposed methods include:

The Authority found that freshwater take in New Zealand nearly doubled in the last decade and that developmental and agricultural pressure has left many rivers unsafe to swim in. The Authority warns that unless immediate action is taken to address these concerns, our river systems may be permanently lost to degradation.

The Report has been submitted to the Minister of Conservation for consideration, to guide policy development and inform any future implementation of a new scheme such as that proposed by the Authority. In the short term, the Report is intended to reinvigorate debate and stimulate public interest in the state of our river systems.

Climate Change and Emissions Trading Update

New Kyoto successor agreed to

After two extra days of negotiations, the 194-country UN climate change conference in Durban wrapped up on Sunday, with all parties breathing a collective sigh of relief that new accords, to be known as "the Durban Platform", had been agreed to at the last minute.

The results, described by the Chair of the conference as "an imperfect compromise" are as follows:

The fact that the United States of America, China and Japan have agreed to the plans is significant given that they make up 45% of global emissions and currently sit outside of the Kyoto Protocol obligations.

The next global climate change conference will be held at the end of next year in Qatar, in close cooperation with the Republic of Korea.

Linking Australian and New Zealand emissions trading schemes

Tim Groser, New Zealand Minister for International Climate Change Negotiations, has announced that official steps have been taken to link Australia's and New Zealand's emissions trading schemes. The Australia-New Zealand Carbon Pricing Officials Group (CPOG) has been established to provide senior officials from the two countries with a forum to discuss how the schemes could be linked in a practical and efficient way. Prime Ministers Julia Gillard and John Key agreed in June of this year that a group such as a CPOG would be established in the near future.

Minister Groser and his Australian counterpart, Minister for Climate Change and Energy Efficiency, Greg Combet, have agreed the terms of reference that will shape CPOG's future discussions, set to start next year.

The Ministers noted that collaborating in this area would be a way to promote deeper, more liquid carbon markets both domestically and internationally, while enhancing Trans-Tasman economic closeness. Linking the schemes could commence in 2015, which is when the flexible pricing period for Australia's carbon pricing scheme begins.

Tim Groser has just returned from South Africa, where he attended the annual ministerial conference of the United Nations Framework Convention on Climate Change. He was joined by Climate Change Minister Nick Smith for part of the conference.

Australia's carbon pricing scheme

In November, the Australian Federal Parliament passed its much awaited (and debated) Clean Energy Future legislation establishing a carbon pricing scheme. The scheme will effectively operate as a carbon tax for the first three years, before transitioning to a cap and trade scheme similar to New Zealand's Emissions Trading Scheme (NZ ETS). As noted above, it is likely that a trans-Tasman scheme could emerge around the time of this transition.

The new carbon pricing scheme begins on 1 July 2012, and will capture emissions in the stationary energy, industrial processing, resources and waste sectors. A sliding fixed carbon price of $23 per tonne of emissions will apply for the first year, increasing to $24.15 in the second year, and moving to $25.40 in the third year. From 1 July 2015, the scheme will move to a flexible price within a trading scheme, similar to the NZ ETS.

Some key differences from New Zealand's scheme are:

The legislation also provides for the establishment of a new independent Climate Change Authority to advise on annual scheme emissions caps five years in advance of the stated year and to make recommendations for Australia's long-term emissions reductions goals.

Assistance will be given to internationally trade-exposed businesses, with free allocation of carbon units (similar to New Zealand). The assistance to be given to coal-fired electricity generators is estimated at $5.5 billion in the first five years. At the same time, the Government is hoping to see the closure of approximately 2,000MW of the most emissions-intensive coal-fired electricity generation by 2020.

The Federal Opposition party is strongly opposed to the carbon pricing scheme and has vowed to repeal the entire scheme if it comes into power at the next election (in November 2013). To do this, however, it would need to win control of both the House of Representatives and the Senate, currently considered a long shot at best. If this were to eventuate, it could significantly change the climate change landscape both in Australia and New Zealand in 2014/2015.

Progress Of Legislation

All Bills and inquiries lapsed with the dissolution of the previous Parliament. The new Parliament will need to reinstate Bills at the stage at which they lapsed, and can also reinstate inquiries. The new Parliament may choose to not reinstate some Bills, which effectively discharges them.

Regulations

Bail Amendment Act 2011 Commencement Order 2011
Building (Forms) Amendment Regulations 2011
Crimes Amendment Act (No 4) 2011 Commencement Order 2011
Criminal Procedure Act Commencement Order 2011
Education (2012 School Staffing) Amendment Order 2011
Fisheries (High Seas Fishing Notifications—Commission for the Conservation of Southern Bluefin Tuna) Amendment Notice (No 2) 2011
Fisheries (High Seas Fishing Notifications—Commission for the Conservation of Antarctic Marine Living Resources) Amendment Notice (No 2) 2011
Fisheries (Remaining Cost Recovery Settlement Balance) Notice 2011
Health Practitioners (Quality Assurance Activity—Hawke's Bay DHB) Notice 2011
Health Practitioners (Quality Assurance Activity—Ormiston Hospital) Notice 2011
Juries Amendment Act 2011 Commencement Order 2011
Securities Act (Group Investment Funds) Exemption Notice 2011
Summary Proceedings Amendment Act (No 2) 2011 Commencement Order 2011
Takeovers Code (Trade Me Group Limited) Exemption Notice 2011
Victims' Rights Amendment Act 2011 Commencement Order 2011

In the Week Ahead

On Tuesday 20 December, the House of Representatives will meet again. The following day (Wednesday 21 December), Parliament will be formally opened by the Governor-General, who will deliver the Speech from the Throne. This followed by the 'Address in Reply' debate, giving MPs the first chance since the election to debate face-to-face. The House is likely to then adjourn until mid-February.

In Consultation

New

Who

What

By when… (2011)

Department of Conservation

Rees-Dart Track hut booking system

13 January 2012

Electricity Authority

2012/13 Appropriations, Authority Path to CRE, and EECA work programme

9 January 2012

Financial Markets Authority

Proposed requirements for accredited bodies under the Auditor Regulation Act 2011

22 December 2011

Ministry of Fisheries

Squid fishery around the Auckland Islands

23 December 2011

New Zealand Food Safety Authority

Bovine post mortem inspection procedures

16 December 2011

Processed meats - part 4

16 December 2011

Data Protection for Agricultural Compounds 2011/10

15 December 2011

Food Standards Australia New Zealand

Food derived from Insect-protected Corn

28 January 2012

Low THC Hemp as a Food

1 February 2012

Inland Revenue Department

Deductibility of expenditure on inlet race to dairy shed

16 December 2011

Standard-Cost Household Service for Childcare Providers

31 January 2012

Fertiliser storage facilities, depreciation of buildings, grand-parented structures

31 January 2012

Can income deemed to arise under tax law, but not trust law, give rise to beneficiary income?

17 February 2012

Department of Labour

Manufacturing sector plan to 2013

19 December 2011

Support Adventure website and guidance tool

30 April 2012

Best practice guideline for working on roofs

23 December 2011

Guidelines for the safe use of elevating work platforms in the horticultural industry

13 January 2012

Law Commission

‘New Media’: Rights, Responsibilities and Regulation in the Digital Age’

12 March 2012

Reserve Bank

Covered bonds

16 March 2012

Standards New Zealand - Joint Draft Standards

Personal eye protection

13 February 2012

Oxygen consumption calorimeter

23 January 2012

Explosive atmospheres - equipment, gas and vapour categorisation

4 January 2012

Appliance couplers - household and general purposes

30 December 2011

Standards New Zealand

Self containment for motor caravans and caravans

27 January 2012

Design and application of outdoor recreation symbols

27 January 2012

New Zealand Transport Agency

Draft Safer Journeys for Motorcycling Guide

20 January 2012

 

Current

Who

What

By when… (2011)

Commerce Commission

Initial Default Price-Quality Paths
for Gas Pipeline Businesses

19 December 2011

Department of Conservation

Kauri National Park proposal

tbc

Canterbury draft guidelines for aircraft access

Ongoing

Nelson/Marlborough CMS pre-draft consultation

December 2011

Financial Markets Authority

Licensing of Auditors and Registration of Audit Firms

16 December 2011

New Zealand Food Safety Authority

Data Protection for Agricultural Compounds 2011/10

15 December 2011

Food Standards Australia New Zealand

Amylomaltase as a Processing Aid (Enzyme)

14 December 2011

Dibromo-dimethylhydantoin (DBDMH) as a Processing Aid

22 December 2011

Ministry of Justice

Family Court Review

29 February 2012

Reserve Bank

Basel III: capital adequacy standards

27 January 2012

Standards New Zealand - Joint Draft Standards

Electric duct heaters

16 December 2011

Firefighters’ helmets

16 January 2012

Codes of conduct for organisations

26 December 2011

IT equipment - energy performance

23 December 2011

IT equipment - computer monitors

14 December 2011

Electrical equipment for explosive atmospheres

14 December 2011

Electrical equipment - caplights

26 December 2011

Standards New Zealand

IT equipment - computers, internal power supplies

23 December 2011

IT equipment - computer monitors

14 December 2011

Electrical equipment for explosive atmospheres

14 December 2011

 

This publication is included in Russell McVeagh's website : www.russellmcveagh.com

This publication is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice. If you require any advice or further information on the subject matter of this newsletter, please contact the partner/solicitor in the firm who normally advises you, or alternatively contact:

TIM CLARKE - Partner
Ph 04 819 7532
tim.clarke@russellmcveagh.com

CRAIG SHRIVE - Partner
Ph 09 367 8855
craig.shrive@russellmcveagh.com

DOUG BAILEY - Consultant
Ph 04 819 7572
doug.bailey@russellmcveagh.com

RUSSELL MCVEAGH
VERO CENTRE 48 SHORTLAND STREET
PO BOX AUCKLAND 1140 NEW ZEALAND
PHONE 9 64 367 8000 FAX 64 9 367 8613

VODAFONE ON THE QUAY 157 LAMBTON QUAY
PO BOX 10-214 WELLINGTON 6143 NEW ZEALAND
PHONE 4 4999 555 FAX 4 499 9556