Category: New Zealand Government

Source: New Zealand Government

Headline: Simplifying tax obligations

Legislation designed to simplify interactions with the tax system has passed its third reading in Parliament and now awaits Royal Assent.
Revenue Minister Stuart Nash says the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Bill sets the annual rates of tax for the 2017-18 tax year and implements four broad policy changes. It will:
Reform the administration of PAYE (wage and salary deductions) to require employers to provide more timely information to IRD
Reform the way banks and other institutions provide information to IRD about investment income
Modernise the taxation of employee share schemes  
Extend the bright line test on residential investment properties from two years to five years.
“This is a bill which benefits ordinary New Zealanders. In designing these measures, we were careful to take into account people’s unique circumstances,” Revenue Minister Stuart Nash says.
“The bill provides better income information to give more accurate Working for Families entitlements and it will also reduce the number of people getting into debt. The bill achieves this by providing Inland Revenue with accurate and more timely information from the payers of employment and investment income. 
“The other major aspect of this bill is to modernise and strengthen the tax rules relating to employee share schemes. We want to make sure that the tax treatment of employee share schemes is broadly similar to the tax treatment of other forms of remuneration.
The extension of the previous government’s bright-line test from two years to five years will help dampen property speculation and make homes more affordable. The extension means that profits from residential investment properties which are bought and sold within five years will generally be taxable. 
“This proposal will ensure that residential property speculators pay income tax on their gains and makes property speculation less attractive. We need investment which grows the economy and creates jobs, not the sort of investment which distorts the residential housing market. This measure will bring fairness back into the tax system,” Mr Nash said.
 

Source: New Zealand Government

Headline: Public housing for Asian seniors opens in Panmure

A new development of 36 public housing units specifically designed for Asian seniors will open in Panmure today, says Ethnic Communities and Associate Housing and Urban Development Minister Jenny Salesa.
The development has been built by the Chinese New Settlers Services Trust (CNSST), in partnership with the Ministry of Social Development and the Ministry of Business, Innovation and Employment (MBIE). MBIE’s Social Housing Fund provided capital funding of more than $5.2 million towards the project.
“CNSST Kotuku House will house Asian seniors in Auckland that face a number of social issues, including isolation, safety concerns and a lack of independent living options,” Jenny Salesa said.
“As the number of New Zealanders aged over 65 continues to rise, developments such as these will be increasingly in demand.
“The Chinese New Settlers Services Trust provides social services for more than 15,000 local Asian migrants each year and the opening of Kotuku House shows this group is responsive to the needs of its community.
“This Government is committed to increasing the supply of long-term public housing but we cannot do this alone. Working closely in partnership with our Community Housing Providers, such as the CNSST, will be critical in achieving our goals,” Jenny Salesa said.
CNSST’s Executive Director, Jenny Wang, says Kotuku House is just the start of what the Trust aims to achieve in the public housing space.
“The Trust is focussed on developing further social housing projects for local Asian seniors, and re-investing our housing surpluses back into social housing to meet the increased housing, social and cultural demands of the people we work with,” she said.
 

Source: New Zealand Government

Headline: New Tertiary Education Bill passes final reading

The passing of the third reading of the Education (Tertiary Education and Other Matters) Amendment Bill will see a range of changes to the tertiary education sector, Education Minister Chris Hipkins says.
“The Tertiary Education Commission will have new powers under the Act to monitor the tertiary sector and to hold providers to account for their use of public funding,” Chris Hipkins says.  
“To further address ongoing concerns about provider behaviour, the changes will see the introduction of a new offence provision for falsifying a student’s record and the penalty for this offence has increased to up to $50,000. 
“The Bill also allows wānanga to seek consent to use a protected term, such as a university or polytechnic, giving them the same rights that private training establishments (PTE) have in being able to apply to use this term.
“However, there is a tough test for applicants to use one of these terms. As part of this process, the Minister of Education will have to consult and consider the national interest.  
“Another significant change is that Community Tertiary Education Providers (CTEP) are recognised in the Act as a new type of private training establishment.
“CTEPs are not-for-profit community groups providing tertiary education for the public good. This change will allow the public to distinguish them from for-profit providers. 
“The changes build on the strong foundations of the tertiary education system. We will continue to work to a better, stronger, and fairer tertiary sector that equips New Zealanders for the 21st century,” Chris Hipkins says.

Source: New Zealand Government

Headline: Regional fuel tax bill has first reading

The first reading of the Land Transport Management (Regional Fuel Tax) Amendment Bill is an important step towards helping Auckland meet its transport challenges, Transport Minister Phil Twyford says.
The Bill allows regions to apply for a regional fuel tax, initially for Auckland. The tax would be on petrol and diesel for a period of no more than 10 years.
Phil Twyford says this period of time gives the region the funding certainty it needs to plan and build major projects.
“This Bill will enable Auckland Council to seek funding for specific transport-related projects. Funds raised in the Auckland region can only be spent there.
“A regional fuel tax will allow Auckland Council to generate an extra $170 million a year as one contribution to the big transport investments the city needs.
“It will help fund the vital infrastructure Auckland needs to get moving. Its infrastructure can no longer support the massive population growth it’s had in recent years.
“This has resulted in lost time and productivity for so many Aucklanders. Auckland can no longer afford to do nothing. We need to create a world-class transport system in our biggest city, with better infrastructure and a wider range of transport modes to choose from.”
Under the Bill, Auckland Council must first consult with residents on the proposed projects it wishes to fund. It must then obtain Government approval before the regional fuel tax can be implemented.
“Despite advances in transport technology, every day people in Auckland struggle to get to where they need to go on time.
“This Bill is a chance to fix a problem people in Auckland face every day – a gridlocked transport system that is only getting worse,” Phil Twyford says.
The Bill will be referred to the Finance and Expenditure Select Committee, which will call for public submissions. The law is expected to be passed in June, ready for a fuel tax to be put in place in the Auckland region from 1 July.
 

Source: New Zealand Government

Headline: Crown-Maori efforts to reduce reoffending

Police Minister Stuart Nash has launched the next step in a restorative justice programme that brings together Police, Justice sector agencies, community workers and Maori leaders to reduce reoffending and address causes of crime.
“Community Panels began as a pilot scheme in Christchurch in 2010 and were subsequently extended to become Iwi Community panels in three new areas. Over the past 6 months, they have been further extended and now operate in Gisborne, Hutt Valley, Manukau, Hamilton, Rotorua, Auckland City and Invercargill and are having positive impacts,” Mr Nash says.
“The Crown, community and iwi leaders such as Norm Dewes, Dr Kara Puketapu and particularly Kingi Tūheitia believe this initiative has a permanent part to play in efforts to reduce reoffending and encourage restorative justice.
“The panels have now been gifted the name Te Pae Oranga, which signifies resolution and facilitation, and the importance of supporting the well-being of the individual, their whanau as well as that of the victims. The new name symbolises a permanence for this Crown-Maori justice initiative. I expect to see Te Pae Oranga rolled out to more areas in the near future. 
Mr Nash and Kingi Tūheitia have tonight unveiled a carved pou to symbolise the combined efforts of those who work together on the Iwi Community panels.
“We have had some real successes with these panels, which hold people to account for their offending, work together to repair the damage caused and support the individual in making better decisions for an improved future. They are having a significant and positive impact on our communities and the lives of both offenders and victims.
“We want better long term outcomes for those who come to the attention of the justice system for relatively minor crimes, and also for the victims of this offending. Police can direct people who have committed low-level offences to a supportive environment where they are made accountable for the offending and can be connected with the services and support that address the underlying causes.
“If we want to truly address crime levels in New Zealand, we need to look at what else is happening in these people’s lives. The iwi panels also create direct savings to the government by reducing the number of cases going through the Courts, the amount of time Police spend dealing with low-level reoffending and the number of days people are held in prison, Mr Nash says. 
 

Source: New Zealand Government

Headline: New targets begin historic path to poverty reduction

New Zealand will take its next steps towards fulfilling new child poverty legislation by setting three year targets to reduce poverty and hardship among children, Prime Minister and Minister for Child Poverty Reduction Jacinda Ardern says.
“I want New Zealand to be the best place in the world to be a child, and for adults to be proud of how we treat our children.
“The Government has already set ambitious 10 year targets that will effectively halve the rate of child poverty using measures in my Child Poverty Reduction Bill.
“These three year targets will keep us on track for reaching those 10 year targets. Using the primary measures defined in the Bill, the three year targets are: 
On the before housing measure*: Reduce the proportion of children in low income households by 6 percentage points by 2020/21 – a reduction of around 70,000 children.
On the after housing costs measure*: Reduce the proportion of children in low income households by 4 percentage points by 2020/21 – a reduction of around 40,000 children.
On the material hardship measure*: Reduce the proportion of children in material hardship by 3 percentage points by 2020/21– a reduction of around 30,000 children.
“By meeting these targets, New Zealand will be well on the way to making a meaningful difference in the lives of hundreds of thousands of children. This is on top of the difference we will make with the extra support being given through the Families Package from 1 July this year – 384,000 families will be better off by an average $75 per week.
“This is about putting an end to a political era that tolerated hardship and poverty among thousands of our kids, and instead refocusing governments on what’s needed to ensure all kids have the opportunity to thrive. Our children deserve nothing less,” Jacinda Ardern said.
 More information on the Bill can be found here and on the ten year targets here.
 *The four primary measures of poverty and hardship in the Bill:
1.  Low income before housing costs (below 50 % of median income, moving line)
2.  Low income after housing costs (50% median, fixed line)
3.  Material hardship (using the EU’s standard threshold which going without things such as healthy food, warm clothes, or delaying going to the doctor)
4.  A persistence measure (for low income, material hardship or both. The data is not currently available for this measure)
 

Source: New Zealand Government

Headline: Unjust gay convictions one step closer to being wiped

A Bill demonstrating the Government’s ongoing commitment to right the wrongs of the past for those who were convicted of historical homosexual offences has passed its second reading says Justice Minister Andrew Little.
“The Criminal Records (Expungement of Convictions for Historical Homosexual Offences) Bill introduces a scheme to expunge convictions for men for specific offences that were decriminalised by the Homosexual Reform Act 1986. To be wiped, the conduct must not be an offence under today’s laws.
“Nearly every single submission received expressed clear support for the intent of the Bill. I would particularly like to thank those submitters who shared their stories with the committee.
“The Justice Select Committee recommended a small number of changes to the Bill. These include minor technical changes, altering offence provisions to better align with other legislation and to ensure that people are not put under pressure to disclose their expunged convictions.
“The main purpose of the Bill is to create a statutory scheme for a convicted person, or a representative if that person is deceased, to apply for their conviction to be expunged remains unchanged.
“This Bill empowers those convicted and their representatives by providing an effective way to right the wrongs of the past,” says Andrew Little.

Source: New Zealand Government

Headline: Helping our kids develop the skills to be digital thinkers and creators

A $6 million ‘All Equity Fund’ launched today will give less-advantaged students better access to digital tools, skills and knowledge, Education Minister Chris Hipkins says.  
The Digital Technologies for All Equity Fund is one part of a $38 million Government funding package to make digital technologies more accessible for school kids. This includes around $24 million to help teachers and kaiako prepare to teach the new curriculum content.
The All Equity Fund is available for 12,500 children a year over three years.
“It’s really important that all children are given the opportunity to improve their digital literacy to prepare them for the modern workforce.
“The fund is about ensuring that students who may otherwise have limited access to digital technologies aren’t missing out.
The Museum of New Zealand Te Papa Tongarewa (Te Papa) and Karrikins Group have been selected to partner with the Ministry of Education to deliver innovative programmes that captures students’ imagination,” Chris Hipkins says.
Karrikins Group New Zealand General Manager Michelle Kazor says its ‘Digital Ignition’ programme will include robots, 3D printing and coding and overall emphasise an ability to ‘think digitally’.
Te Papa will partner with other museums and bring technology-rich learning to students, who will be able to tell their own stories as they build their knowledge, Te Papa Chief Executive Geraint Martin says.
The two different programmes will support learning in a culturally relevant and meaningful way and open up further options for children. Karrikins Group and Te Papa will work in partnership with schools/kura across the country to achieve these outcomes.

Source: New Zealand Government

Headline: Details of retail power price review released

Energy and Resources Minister Megan Woods has today released the terms of reference for review into the price of electricity in New Zealand.
“New Zealanders deserve to have access to electricity at a fair price and this review will look into whether the electricity market is delivering that.
“Residential electricity prices have risen by around 50 per cent since 2000 but the price for business remained flat. We want to find out why that is,” said Megan Woods.
The review will adopt a forward-looking approach and will consider the entire electricity market, from generation, through transmission and distribution, to retail.
“We need to consider how the market operates as whole because all of it contributes to what makes up our power bills.
“The review is also tasked with looking at how the electricity market and its regulatory framework is placed for the future especially in the light of the rise of emerging technologies such as solar power and electric vehicles.”
Megan Woods said the composition of the expert advisory group was in its final stages. The expert advisory group will provide peer and technical advice for the review which will be supported by a secretariat provided by the Ministry of Business, Innovation and Employment and external consultants.
“The review will be carried out in stages with the first phase looking at determining facts and building evidence and the scope of further stages will be shaped by those findings,” said Megan Woods
The final report is expected to be delivered to the Minister early next year.
Minister Woods has also released the submissions from stakeholders on the draft terms of reference and this can be found here: http://www.mbie.govt.nz/info-services/sectors-industries/energy/current-reviews-consultations
 
Note: The terms of reference are as follows
 
Terms of reference for the electricity price review
Context
Electricity prices, especially for households, have increased faster than inflation for many years, putting pressure on household budgets.  After adjusting for inflation, residential customers have faced around a 50 per cent increase in real electricity prices since 2000.  In comparison, real prices faced by commercial and industrial customers have remained relatively flat.
International comparisons in the International Energy Agency’s (IEA) 2017 In Depth Review of New Zealand found that residential electricity prices have grown from low levels much faster than in other IEA countries.  It also found that residential prices in New Zealand were well above the IEA average in 2014, while industrial prices were below the IEA average.
In addition, rapidly changing technologies and business innovations present opportunities and challenges to the operation the electricity system.  Emerging technologies can contribute to the transition to a lower emissions economy through renewable energy solutions, increasing the efficiency of the grid and enabling greater energy consumption control for the consumer.  To benefit from technology we need a regulatory framework that is sufficiently enabling. 
In this context, the Government will undertake a review to investigate whether the electricity market is delivering efficient, fair and equitable prices to end-consumers.  It will also assess whether the electricity regulatory framework will continue to be appropriate as we look to the future.
Overarching Objective
The objective of the review is to ensure that the New Zealand electricity market delivers efficient, fair and equitable prices as technology evolves and we transition to a lower emissions future, taking into consideration the requirements of environmental sustainability and the need to maintain security and reliability of supply – the energy trilemma.
Links to wider work
The review will take into account crossovers and linkages with existing and planned work, including the work of the Electricity Authority on transmission pricing, work on how to reach 100% renewable electricity by 2035 by the new Interim Climate Change Committee and Climate Commission, and the work of the Productivity Commission on its low emissions economy inquiry.
Scope
The review will examine whether the prices paid by end-consumers for electricity are efficient, fair and equitable.  Relevant perspectives on fairness and equity include:
Whether suppliers of electricity services have the ability to extract excessive profits over time[1].
Whether all consumers have access to affordable electricity services, noting this depends on many factors other than electricity prices (including housing quality and income levels).
Whether the costs of providing electricity services are or should be socialised or spread evenly across different classes of consumers (e.g. households and businesses), or across regions, or urban and rural communities. 

The review will:
Consider the entire electricity supply chain: generation, transmission, distribution, and retail. 
Evaluate whether the regulatory framework governing both the competitive aspects of the electricity market and the monopoly aspects (i.e. transmission and distribution) are delivering efficiency and fairness.
Consider the ability of the market and regulatory framework to enable and benefit from emerging technologies and innovation in business models.

In considering whether prices are efficient, fair and equitable, the review will take issues of security, reliability and environmental sustainability into account.
Information collection
The review will collect information and report on:
The key components of retail electricity prices, how they have changed over time and how they compare internationally.
Variations in price across different customer groups.
The proportion of household income spent on electricity bills and how this varies between different customer groups.
The financial performance of suppliers across the supply chain.

Competition
The review will consider:
The existence of, or potential for, factors that may form barriers to entry or limit competition across the supply chain.  This should include, but not be limited to, the impact of vertical integration in parts of the supply chain.
The existence of, or potential for, informational asymmetries, and the impact on electricity customers with differing behavioural patterns (and therefore different consumption profiles).
The existence of, or potential for, regulatory failure – including the impact of the low fixed charge regulations, and the impact on differing customer segments.
The role and effectiveness of the current regulatory framework in promoting competition, including at the boundaries between contestable and non-contestable services.
The respective roles and functions of the separate regulatory agencies over the electricity sector.

Equity
The review will consider:
The impact of market conduct and regulation on a range of customer segments.  This should include, but not be limited by, regional distributions, household income levels and broad consumer group (i.e. residential, industrial, and commercial).
The nature of cost allocations and level of any cross subsidisation between consumer groups (including businesses and households, and urban and rural communities), including the impact of the low fixed charge regulations.
The regional distributional aspects of transmission pricing. 

Future technologies
The review will consider:
The potential impacts of emerging technology on services and prices, and how this may affect different customer groups. 
The current regulatory framework and its ability to promote the potential benefits from emerging technologies.

Guidance on scope
The review is expected to make findings and recommendations at a level of detail appropriate to a policy review.  It is not required or expected to make findings or recommendations about matters of technical regulatory detail such as how regulated weighted average cost of capital should be determined, or at how many hubs financial transmission rights should be traded.
In considering issues relating to the economic regulation of natural monopoly networks applied under Part 4 of the Commerce Act, the review should be mindful that this regulatory framework is also applied to the gas and international airport sectors, and any changes could have significant impacts on these sectors that would need to be carefully considered by the Government.  The review should also be mindful that the input methodologies set independently by the Commerce Commission have been subject to extensive consultation, expert analysis, and review by the High Court.  This previous scrutiny, the technical complexity of the issues involved, impact on investment and regulatory certainty, and their cross-sectoral application means the Government is likely to exercise considerable caution in considering changes to the Commerce Commission’s input methodologies.
The review is not expected or required to evaluate the performance of regulatory bodies against their existing statutory objectives, but may make findings and recommendations about regulatory frameworks and institutional arrangements.
Process and timeframe
The review will determine its own process, but is expected to involve wide engagement on issues and draft findings.
The review may be structured in stages, with initial stages focusing on determining facts and building evidence.  The scope of further stages would be developed upon the findings emerging from the first stage. 
The final report should include recommendations for any improvements to the regulatory framework, structure and design of the electricity market that are considered warranted. 
The final report will be delivered to the Minister of Energy and Resources by April 2019.
 
[1] The purpose of regulation under Part 4 of the Commerce Act includes that ‘suppliers […] are limited in their ability to extract excessive profits’, so the review may draw on existing information about relevant regulated services.