Andrew Little – New Zealanders want a better justice system

Minister of Justice Andrew Little in response to the Te Uepū report – Transforming our Criminal Justice System.


New Zealanders from across the country are calling for the criminal justice system to be overhauled, says Justice Minister Andrew Little.

The Minister today released the interim report He Waka Roimata from Te Uepū Hāpai i te Ora Safe and Effective Justice Advisory Group, which captures feedback from New Zealanders on the current state of the justice system and offers insights on how it can be improved.

“I welcome the first report from Te Uepū, which clearly demonstrates a public appetite for long-term sustainable and enduring transformation in the justice system,” says Andrew Little.

“This report follows comprehensive engagement with the community and shows New Zealanders want to see less offending, less re-offending, and fewer victims of crime, who are better supported.

“The report provides sober reading. There are many stories and examples shared by victims, families, offenders and organisations that are upsetting, especially those that demonstrate failings in the system that could be avoided through simple, early and appropriate interventions.

“The report also offers hope. The overwhelming sense is that we can make change for the better, and deliver safer and more effective justice for all New Zealanders.

“I’d like to thank everyone who has given their voice especially those who have been victimised.

“Te Uepū is now developing reform options for the Government that it believes will contribute to a safer and more effective justice system,” says Andrew Little.

The interim report can be found at: http://www.safeandeffectivejustice.govt.nz/about-this-work/te-uepu-report

Digital services tax proposals to target multinationals

The avoidance of paying tax by multinational companies is well known, but an effective solution is difficult to come up with. The Government has proposed two options.


Ensuring multinationals pay their fair share of tax

Finance Minister Grant Robertson and Revenue Minister Stuart Nash today proposed two broad options to ensure offshore digital companies no longer enjoy tax breaks which are not available to local businesses.

“Our number one preference remains an internationally agreed solution through the OECD,” says Mr Robertson. “However if the OECD cannot make sufficient progress this year we need an interim solution. Other nations have already taken this step.”

“The UK has announced it will introduce a two percent DST from April 2020. Austria, the Czech Republic, France, India, Italy and Spain have also enacted or announced DSTs.

“We need to protect our economy and the integrity of our tax system. Modern business practices, digitalisation in particular, mean that a company can be significantly involved in the economic life of a country without paying tax on income or turnover.

“Multinational companies like social media platforms and e-commerce sites generate income through cross-border digital services rather than face-to-face retail,” says Mr Robertson.

The DST outlined in a discussion document released today would apply to:

  • platforms which facilitate the sale of goods or services between people, such as Uber and Airbnb and eBay;
  • social media platforms like Facebook;
  • content sharing sites like YouTube and Instagram; and
  • companies which provide search engines and sell data about users.

“A DST would be narrowly targeted at certain highly digitalised business models. It would not apply to sales of goods or services, but to digital platforms who depend on a base of users for income from advertising or data.

“The value of cross-border digital services in New Zealand is estimated to be around $2.7 billion. The estimated revenue of a DST is between $30 million and $80 million, depending on the design,” Grant Robertson said.

Revenue Minister Stuart Nash says the Tax Working Group concluded New Zealand should continue to participate in the OECD discussions but also stand ready to implement a DST if a critical mass of other countries move in that direction.

“The OECD is seeking approval for its digital economy work programme from the G20 group of large economies at a meeting in late June. The progress made at the OECD to date has not been sufficient to allay the concerns of several countries, who have announced or introduced DSTs as unilateral interim measures.

“Any DST in New Zealand would be an interim measure. The Government would look to repeal it if and when the OECD’s international solution was implemented,” says Mr Nash.

The two options are:

  • Changing the current international income tax rules, to allow more taxation in market countries.  This option is currently being discussed by the OECD and the G20 group of large economies.
  •  Applying a separate DST of three per cent to certain revenues earned by highly digitalised multinationals operating in New Zealand. The discussion document seeks feedback on how a DST might work in practice.

“The Government is committed to future-proofing the tax system to ensure it can handle changes to how people work and how business is done,” Mr Nash says.

“The significance of the digital economy is only going to grow over the coming decades. We need to keep adapting to ensure multinationals who do business here are paying their fair share of tax.

“We’ve passed legislation to collect GST on remote services, and to ensure multinationals pay their fair share of tax if they have a physical presence in New Zealand, and we have legislation before parliament to ensure we collect GST on low-value imported goods,” says Mr Nash.

The discussion document can be found at taxpolicy.ird.govt.nz. Consultation closes on 18 July 2019.

 

Second inquiry by State Services over budget leak

The State Services Commission has announced they investigate statements made and actions taken by the Secretary to the Treasury Gabriel Makhlouf following the leak of budget data two days before budget day last week.

This is in addition to an inquiry into the leak itself, announced last week.

Makhlouf seems to have handled things poorly, and the Government was messy with their handling as well.

But two inquiries as a result of the National Opposition ferreting for something so they could grandstand and embarrass the Government.

What has been achieved overall? More self inflicted discrediting of Parliament and politics in general. I don’t see anything positive from all of this.

There is no benefit to the public.

Last week:  Inquiry into unauthorised access to Budget material

The State Services Commission will undertake an inquiry into how Budget material was accessed at the Treasury.

The Secretary to the Treasury, Gabriel Makhlouf, asked the Commissioner to inquire into the adequacy of Treasury policies, systems and processes for managing Budget security.

“Unauthorised access to confidential budget material is a very serious matter,” said State Services Commissioner Peter Hughes.

“Mr Makhlouf has asked me to investigate and I am considering my options. This is a matter of considerable public interest and I will have more to say as soon as I am in a position do so.”

While there is no evidence of a system-wide issue, Mr Hughes has asked Andrew Hampton, the Government Chief Information Security Officer, to work with the Government Chief Digital Officer, Paul James, to provide assurance that information security across the Public Service is sound.

“This is an important issue because it goes to trust and confidence in the Public Service and in the security of government information,” said Mr Hughes.

“The inquiry will seek to understand exactly what has happened so that it doesn’t happen again.”

Today:  Investigation into statements made and actions taken by the Secretary to the Treasury

State Services Commissioner Peter Hughes has today announced an investigation into recent questions raised concerning the Chief Executive and Secretary to the Treasury, Gabriel Makhlouf, and his actions and public statements about the causes of the unauthorised access to Budget material. 

The investigation will establish the facts in relation to Mr Makhlouf’s public statements about the causes of the unauthorised access; the advice he provided to his Minister at the time; his basis for making those statements and providing that advice; and the decision to refer the matter to the Police.

Mr Hughes said the questions that have been raised are a matter of considerable public interest and should be addressed.

“It’s my job to get to the bottom of this and that’s what I’m going to do,” said Mr Hughes.

Mr Hughes has asked Deputy State Services Commissioner, Mr John Ombler QSO, to lead the investigation. It will be done as quickly as practicable and the findings, and the Commissioner’s view of them, will be made public.

“Mr Makhlouf believes that at all times he acted in good faith,” said Mr Hughes. “Nonetheless, he and I agree that it is in everyone’s interests that the facts are established before he leaves his role on 27 June if possible. Mr Makhlouf is happy to cooperate fully to achieve that. I ask people to step back and let this process be completed.”

Neither Mr Hughes or Mr Makhlouf will be making any public comment until the investigation is finished. Mr Makhlouf will be working as usual during this period.

The investigation announced today is separate to the inquiry announced last week into the unauthorised access of Budget information. The Terms of Reference and who will lead this inquiry, which is expected to take some months, will be announced shortly.

What about an inquiry into why politicians waste so much time (and public service time) doing negative crap that has no real benefit to the country?

‘Digital and media expert group’ advising on social media regulation revealed

It has taken an Official Information Act request to reveal the members of a digital and media expert group assembled by the Prime Minister to advise her on possible regulation of social media.

Information about the objectives of the group was withheld – “I have considered the public interest considerations”, but surely secrecy is not in the public interest here.

NZ Herald (6 April 2019): Ardern changes down a gear from speedy gun reform to social media landscape

The areas of policy in which Ardern will be more deliberately paced are in regulation of social media, and other issues that impinge on media generally, free speech and the free exchange of ideas. The effects would be more wide-ranging and could be insidious.

Ardern has put together a group of digital and media experts who met with her for the first time in Auckland yesterday to discuss what happened and may be a sounding board and think tank for future policy proposals.

NZ Herald (8 April 2019):  Jacinda Ardern calls for global approach to block harm on digital platforms

Prime Minister Jacinda Ardern says the global community should “speak with one voice” when it comes to blocking harmful content on social media platforms.

Ardern has criticised the role of social media in the Christchurch terror attack on March 15, and she met with a group of digital media experts in Auckland on Friday to learn more about the issue.

“I wanted to make sure I had the views of those that work in the [social media] space, particularly given that questions are being raised around what role New Zealand could and should play in this debate at an international level.”

Many people ‘work in the [social media] space’. Meeting with an unnamed group is only going to get a small number of views.

She said she would be happy to say who she met with, but would seek their permission to do so first.

So if people she meets with don’t want to be revealed Ardern would keep this secret?

Matthew Hooton spotted the reference to the ‘expert group’ so put in an OIA request asking who the experts were, and also who had been invited but couldn’t attend. Yesterday he received a response.

Official Information Act request relating to the digital and media expert group the Prime Minister met with on 5 April 2019.

The group provides an informal way to test policy ideas and inform government thinking about its response to the role of social media in the events of 15 March 2019 in Christchurch. The people currently involved are:

  • Jordan Carter, Chief Executive, Internet NZ
  • Nat Torkington, technologist
  • Miriyana Alexander, Premium Content Editor, NZME
  • Rick Shera, Internet and Digital Business Law Partner, Lowndes Jordan
  • Michael Wallmansberger, cybersecurity professional, independent director; Chair of the CERT NZ Establishment Advisory Board
  • Victoria Maclennan, Managing Director, MD OptimalBI Ltd; Chair of the Digital Economy and Digital Inclusion Ministerial Advisory Group; Co-Chair, NZRise
  • John Wesley-Smith, GL Regulatory Affairs, Spark
  • Lizzie Marvelly, NZ Herald columnist, Villainesse.com co-founder and editor

Not all people involved in the group attended the meeting on Friday, 5 April 20129.

The Office and the department of the Prime Minister and Cabinet assembled the group to have a mix of technology sector, media and legal expertise. The Government Chief Digital Officer and the Minister for Government Digital Services, Hon Dr Megan Woods, provided input on their selection.

To the question for “5. Information on future meetings and the objectives and work programme for the group”:

With regards to question five no formal work programme has been established.

Information was withheld on future meetings and the objectives, and also on these requests:

  • What were the objectives for the group at it’s first meeting?
  • All notes taken by officials or ministerial staff at the first meeting.

So until now we had a semi-secret advisory group, and the objectives and work programme are still secret.

What happened to Ardern’s Government’s promises of openness and transparency?

Ardern’s Chief of Staff closed his OIA response with:

In making my decision, I have considered the public interest considerations in section 9(1) of the Act.

From the Act:

9 Other reasons for withholding official information

(1) Where this section applies, good reason for withholding official information exists, for the purpose of section 5, unless, in the circumstances of the particular case, the withholding of that information is outweighed by other considerations which render it desirable, in the public interest, to make that information available.

I would have thought that it was desirable in the public interest for discussions on social media regulation to be as open as possible.

Social media is used by and affects many people. This sort of secrecy on an advisory group on possible social media regulation is alarming.

Consultation should be as wide as possible, and given the medium involved, that should be easy to do.


Martyn Bradbury makes a reasonable point: Ummmmmmmmmmmmmmmmmmmmm shouldn’t an advisory board to the PM on censoring the internet require some academics and experts on civil rights and freedom of speech?

Dunne calls ‘sophistry and bollocks’ on party posturing on cannabis referendum

Peter Dunne has blasted the Government and the Opposition, calling their posturing on the proposed cannabis referendum sophistry and bollocks.

sohistry: The use of clever but false arguments, especially with the intention of deceiving.

bollocks: Nonsense; rubbish (used to express contempt or disagreement, or as an exclamation of annoyance)

So quite strong language from Dunne.

Newsroom:  Sophistry and bollocks on the referendum

Next year’s referendum on recreational cannabis will be the first Government-initiated referendum not to have an immediate definitive outcome. Despite being styled as a binding referendum, it will, in reality, be no more than an indicative vote whether or not people wish to change the legal status of cannabis used for recreational purposes along the lines to be set put in a proposed Bill to accompany the referendum.

But this Bill will not even be put before Parliament, let alone passed, until after the referendum has been held, so voters are being asked to take a great deal on trust.

The Justice Minister has given a commitment that the current three Government parties will treat the outcome of the referendum as binding, and that the Bill will come before the next Parliament. But he has given no assurances that the Bill will be the same as that to be released before the referendum, or that it will not be substantially strengthened or weakened by the select committee process to follow, or even when during the term it might be introduced and passed.

Meanwhile, the Leader of the Opposition says he cannot say what his party’s position will be until they see the proposed legislation. The Minister tries to justify his position by saying that no Parliament can bind its successor Parliaments.

This is, to put it politely, pure sophistic bollocks.

sophistic bollocks: deceitful nonsense

Every piece of legislation passed and regulation promulgated by every New Zealand Parliament since our first Parliament met in May 1854 has to some extent or another bound successor Parliaments. Indeed, if those successor Parliaments have not liked laws passed by their predecessors, they have either repealed or amended them.

That is the stuff of politics and political discourse is all about, and governments have always reserved the right to upend the legislation of an earlier government if they have not liked it, and to replace it with something more akin to their own way of thinking.

From the referendum on compulsory peacetime conscription in 1949, through to the 1967 and 1990 referenda on extending the Parliamentary term to four years, and those referred to earlier, governments of the day have used the process judiciously to allow the voters to determine controversial issues that either the politicians cannot decide upon, or, in the case of electoral law changes, should not decide upon.

And the prime example of the dangers of having a binding referendum with little defined, and then trusting politicians to follow the will of the majority, is Brexit. It is not just a mess on leaving the EU, it’s making a mess of the whole political system in the UK.

The notion of a government-initiated referendum that might or might not be binding, or implemented quite as people expect, has been completely foreign to all of those earlier examples. Yet that is precisely what New Zealand now faces with this Government’s, all things to all people, recreational cannabis referendum.

But it is actually worse than that, which could produce more uncertainty than it seeks to resolve.

On the assumption the referendum passes, the country faces a period of uncertainty while the legislation is considered and wends its way through the Parliamentary process, over at least most of 2021, and possibly the early part of 2022, assuming the Government decides to proceed with it as a priority, and that is by no means a given.

I can’t remember how many times I have heard the current Labour led Government say a promise or policy is ‘not a priority’, which is doublespeak for ‘get stuffed, we’re not doing it now’.

Trust politicians?

All this uncertainty creates a potentially extraordinarily confusing situation, which could have been avoided had the specific law been in place before the referendum, to be triggered by a positive vote.

Everyone would have known not only where things would stand once the law changed, but it will also occur immediately, removing instantly the uncertainty likely to accrue from the inevitable post referendum delay and confusion the government’s current approach will surely cause. However, without that, the current disgruntlement about the inconsistent way the current law on cannabis operates, is likely to give way to a new disgruntlement about its replacement.

The way this issue has turned out is another example of how this unwieldly administration seems at sixes and sevens when it comes to major policy development.

Nothing ever seems to be able to be implemented quite the way it was promoted two years ago when the Government took office. The compromises necessary to keep Labour, New Zealand First and the Greens may well be examples of MMP government in practice but they are increasingly looking like weak excuses for missed opportunities.

Is cannabis law reform therefore about to join welfare, tax reform, electoral reform and a raft of other things this Government says it would “love” to do properly, but, when the crunch comes, just cannot ever quite manage to bring together in a cohesive and comprehensive way?

The only think making the deceitful nonsense from the Government look so bad is the matching deceitful nonsense from the opposition.

 

 

 

Little ‘transformational’ about Government so far

Jacinda Ardern promoted her Government as being transformational, but apart from transforming Winston Peters and Shane Jones into well funded promoters of their own interests these is not much transforming going on.

Ardern opened her year claiming that this would be her Government’s year of delivery, but what they have delivered so far has been underwhelming.

The just announced welfare ‘reforms’ have been paltry – see Welfare advisory group – 42 recommendations, 3 to be implemented.

Tim Watkin: Government is running out of chances to be ‘transformational’

Strike one: Capital Gains Tax. Strike two: Welfare reform. The Labour-led government is running out of chances to be the “transformational” administration Jacinda Ardern promised in the 2017 election campaign.

Today the Welfare Expert Advisory Group handed the government a radical blueprint to not just tinker with welfare, but – in their words – to make “urgent and fundamental change”.

It was scathing about sanctions against beneficiaries, saying evidence shows they do little but create more harm to those already at the bottom of society. And it recommended a massive 47 percent increase in current benefit levels.

Those would be hugely controversial reforms… or, you could say, transformational. And they are not of the cuff ideas.

The current and previous Children’s Commissioners have urged such substantial benefit increases as the most effective way to tackle child poverty.

What people seldom consider though is that since then wages and salaries have continued to grow. Super, linked to wages, has grown to. But other benefits – with any increases linked to inflation, not wage growth – have not been increased nearly as much. Until, that is, Sir John Key and Bill English famously raised them in 2015. So the gap between work and welfare has grown since the 1990s.

That’s why the report today says, “The level of financial support is now so low that too many New Zealanders are living in desperate situations”.

In sum, the argument in support of this radical prescription is that you can raise abatements here and offer support there, but the best and least bureaucratic way to tackle poverty is to – wait for it – give the poor more money.

So as part of their coalition deal, Labour and the Greens commission this report. They get the transformational advice most of them would have wanted. How do they respond?

Welfare Minister Carmel Sepuloni agrees the welfare system is not working.

Marama Davidson agrees the welfare system is not working.

And then they commit to ignore the report’s big recommendations.

They say no to up to 47 percent benefit increases, preferring “a staged implementation”. The call for “urgent change” is rejected. Remarkably, Ms Davidson has put her quotes into the same press release, tying the Greens to this approach, when they could have been dissenting from the rafters.

The political and institutional reality is that no government can make these changes overnight. But the cold water thrown on this report underlines what we’ve learnt about this government in its handling of tax, its debt level, labour reform and more.

It is not just incremental, it looks timid.

If the Ardern administration wants to be the transformational government she and her allies think they are in their hearts, they are running out of issues.

A lot of transformation has been limited by NZ First, who seem to have got most of what they want while limiting Labour initiatives (like the CGT) and hobbling the Greens.

Much may depend on what the Government come sup with on climate change, the issue Ardern describe as the nuclear free issue of the present time. Announcements on climate change have been delayed months already. There have been further delays, but promises for next week.

RNZ: NZ First voters will be happy with Zero Carbon Bill deal – Peters

New Zealand First leader Winston Peters says his party’s voters will be happy with the deal he’s struck with the Green Party over the Zero Carbon Bill.

Climate Change Minister and Green Party co-leader James Shaw this week delayed the release of two reports from the Interim Climate Change Committee until the government makes a decision on how to respond, which will contribute to the final climate change legislation.

Mr Peters wouldn’t be drawn on what the specifics of the bill are but did give an inch when RNZ asked whether his voters would be happy with the legislation, replying, “yes”.

That won’t be encouraging for those wanting transformative action on climate change.

Mr Peters said he couldn’t comment on when the bill would go to Cabinet because that was a matter for the Prime Minister but he understood it would be “sooner rather than later”.

Asked if it would be on the agenda at Cabinet on Monday, Mr Peters said he couldn’t answer that question.

Ardern and Shaw will have a lot of questions to answer if they fail to measure up on climate change. Their reputations are depending on actual transformation.

The future of the Greens in parliament may well depend on this one.

 

Census failures and political accusations

The 2018 census has been a bit of a disaster, with the first use of extensive online responses, and a large reduction on the number of people who took part. This had led to significant delays in releasing what data they have gathered as Stats NZ has been doing what they can to fill the gaps in data.

The problems may impact on things like health funding, education planning and electoral boundary fixing.

And political accusations are flying, with National blaming the Minister of Statistics James Shaw, and Shaw and PM Jacinda Ardern blaming the last National government for underfunding the budget.

But this has been questioned – the 2013 census budget was $72 million, while the 2018 census budget was $117 million.

Planning for the census started while National were still in Government, but the actual census was done after Labour-Greens-NZ First took over.

RNZ – Census 2018: Stats NZ sets September release for ‘robust’ data

Stats NZ says it has plugged enough of the gaps in last year’s census to be able to start releasing data from September, but some data – including iwi statistics – are too incomplete to be regarded as official statistics.

Using a methodology that combines 89 percent of real census data and 11 percent of other government administrative data, Stats NZ said it now had records for 4.7 million people in the dataset.

In a statement, government statistician Liz MacPherson said the data now met the quality criteria for population structure information, meaning it could be used for planning, population-based funding for DHBs, and electorate boundaries.

“This means Stats NZ will use 2018 Census data to update the official population estimates and projections that many organisations use for their planning,” Ms MacPherson said.

Earlier this month, Ms MacPherson admitted that nearly one in seven people did not complete the census. The low response rate has delayed the data release twice.

“The release of data has been delayed twice because of the complex and careful work required to lift the quality of the census dataset,” Ms MacPherson said.

She said she wanted to make it clear this dataset was reliable, robust, and based on maths, not guesswork.

While government records helped to fill in gaps, Stats NZ said it could not be used for all the census topics and as a result some data might not be released as official statistics.

Newsroom:  Māori miss out in Census 2018

Data relating to iwi affiliation, for example, will not be available for the 2018 Census.

A lack of iwi affiliation data could have an impact on Treaty settlements.

A Te Arawhiti spokesperson told Newsroom it used iwi affiliation to build understanding of the groups it was negotiating with and to create regional profiles and help the public sector with iwi information.

The data was also a “secondary” factor the Crown considered when developing its Treaty settlement offers.

The spokesperson said Te Arawhiti would work with Statistics NZ and iwi to gather the best usable data from 2018.

Data on Māori ethnicity had been collected accurately, and would be able to be used – just not at the level of iwi.

The Government has announced extra funding, and has slammed the last Government for cutting funding.

James Shaw:  Stats Minister confirms funding for Census fix

Extra funding has been confirmed in this year’s Budget to fix issues arising from the 2018 Census and to ensure the next one is the best it can be, the Minister of Statistics announced today.

“Stats NZ has now confirmed it will provide reliable, quality 2018 census data to calculate how many electorates will be needed for next year’s General Election and to revise electorate boundaries where necessary,” James Shaw said.

“It had to delay other work and re-allocate funds to do it.  As a result there’s a shortfall of $5.76 million needed to complete the delayed work, and that’s being covered in this year’s Budget,” James Shaw said.

“There’s also Budget approval this year of $10.36 million to enable Stats NZ to get ahead of the next census. The money will develop the business case for the 2023 Census and start development work on it.

“The previous National-led Government decided to shift the Census to a mostly online survey and, at the same time, directed Stats NZ to cut costs over two census cycles,” Mr Shaw said.

Moving to a mostly online survey has been contentious. It appears that not enough effort was put into making it easy for people to still do it offline.

But the cost cutting accusations have been challenged.

The way data was collated was changing, and that rate of change is being accelerated.

Newsroom:  Annual census could replace five-year form-filling

The five-yearly national census could become an annual affair as the official statistics agency uses more of the data constantly collected by government agencies rather than rely on declining response rates from individual citizens.

The agency had been testing and refining models for use of administrative data for seven years already. It had intended to use an increasing amount of such data from the 2023 census onwards and instead accelerated its modelling processes to create a statistically robust 2018 census result, McPherson said.

Some 1.2 percent fewer people participated in the census than anticipated. Data gaps left by people not completely filling in their forms meant partial information equivalent to around 500,000 citizens was drawn from administrative data sources rather than census forms filled in on census night, March 6 last year.

“The team at Stats NZ has risen to the challenge and delivered a new way of confidently combining the strengths of census and administrative records to create the 2018 census dataset.

“There are now records for approximately 4.7 million people in the census dataset. The number of records is 1.2 percent, or 58,000 people, less than our best estimate of the population on Census Day 6 March 2018. In 2013, the official census undercount was 2.4 percent, or 103,800 people.

McPherson said the 2018 data was robust enough to allow the re-setting of electoral boundaries for the 2020 election and the population funding models used by public hospitals to determine their budgets, contrary to speculation from critics of the census process.

Change was inevitable. The transition seems to have been stuffed up.

 

Labour response to Tax Working Group final report

Jacinda Ardern not ‘ruling anything in or out’ after capital gains tax recommended by Working Group

Prime Minister Jacinda Ardern won’t commit to any tax reform despite the Tax Working Group report released today recommended a comprehensive capital gains tax.

It’s hardly comprehensive – it is more comprehensive than the current tax on property for developers and speculators, but the recommendations have some significant exclusions.

“We’re going to give the public a little bit of time, we’re going to take a little bit of time to form some consensus around the Government’s response,” she said.

“As you can see in the report there are some areas where everyone agrees, and there are some areas where the group did not, it’s our opportunity as government to go away, take a little bit of time, build some consensus and then come back to the public.”

“We are not ruling anything in or out at this stage.”

But Minister of Finance Grant Robertson and Minister of Revenue Stuart Nash have fronted for the Government  – here is their official response:


Government response to Tax Working Group report

The Coalition Government will take a measured response to the final report of the Tax Working Group (TWG), Finance Minister Grant Robertson and Revenue Minister Stuart Nash said today.

“We welcome the release of the report and thank Sir Michael Cullen and the TWG for their hard work,” the Ministers say.

“The independent report finds that overall our tax system is clear and simple but there is room for improvement. There is some unfairness that we need to address. We will work through ways to do this to make the system fairer and more balanced,” says Mr Robertson.

“The overall findings confirm that there is no need for a major overhaul of the system,” says Mr Nash. “Our response will preserve the key principles of our existing broad-based low-rate tax system. In the words of the Prime Minister, we will not throw the baby out with the bathwater.”

As the Working Group has said, the Government is not bound to accept all the recommendations it put forward. There are options to accept some, and/or to phase or sequence aspects of the packages proposed by the Group. Both Ministers said it was highly unlikely all recommendations will need to be implemented.

“We will seek technical advice on addressing the unfair and unbalanced elements identified by the TWG and make further announcements in April on any measures to enhance the fairness and integrity of the tax system,” Mr Nash said.

“Our aim is to ensure the system is fair for families and businesses and that it offers balance across the wider economy,” Mr Robertson says.

“We look forward to discussing the recommendations with our Coalition and Confidence and Supply partners as we work to find consensus on the best overall package. We will work to get the balance right,” he says.

“I am also happy to reaffirm the commitment made when the TWG was established that no changes arising from the report will be implemented this term. We also set out some clear bottom lines. In particular, the family home, increases to income tax and GST, and an inheritance tax are off limits and this remains the case,” says Mr Robertson.

Mr Nash also confirmed that tax reform initiatives separate to the work of the TWG will continue in the meantime. “We remain vigilant to ways the current tax system fails to address global economic and social forces which affect economic activity. These deficiencies are being acted on through our existing programme of reform.”

The Ministers noted that the Coalition Government has already moved to restore fairness and balance through a series of business-as-usual reforms:

  • Digital Economy. As announced earlier this week we are taking steps to ensure companies in the digital economy who do business across borders pay their fair share of tax. A discussion document on the options for a design of a digital services tax will be released in May, and we continue to work with other countries for a global solution;
  • Multinationals. The aggressive tax planning of some multinational companies who do business here has been tackled through the Base Erosion and Profit Shifting (BEPS) legislation which came into force in 2018;
  • Bright line test. The previous Government’s bright-line test that determines whether you pay tax on residential property investments sold within two years of purchase was extended by this Government to include those sold within five years;
  • Ring fenced losses. Losses on residential investment properties are to be ring-fenced, to remove the ability of property investors to pay less tax on other income;
  • Research and Development. We are encouraging innovation and investment by business with a package of R&D tax incentives that come into force from 1 April 2019;
  • GST on offshore suppliers. Domestic retailers will finally be on a level playing field with foreign companies who sell low value goods into NZ and don’t collect GST;
  • Double Tax Agreements. The ability to detect and prevent tax evasion involving taxpayers who operate in both NZ and offshore jurisdictions is enhanced by DTAs. We have updated the DTA with Hong Kong, a major financial centre in Asia. Updated DTAs with China, Korea and Fiji are also on the Government work programme;
  • Hidden economy and tax evasion. We increased the ability of IR to go after tax cheats, especially in the hidden economy, with more funding for compliance and enforcement;
  • IR Business Transformation. The BT programme of modernisation within IR makes it easier to eliminate punitive secondary tax for those who hold down more than one job, and to automate tax refunds each year;
  • Families Package. Measures in the Families Package targeted low and middle income families including changes to Working for Families;
  • Business Advisory Council and Small Business Council. The PM’s Business Advisory Council and the Small Business Council have been tasked to come up with a strategic approach to supporting business across central agencies.

Timeline:
Ministers expect to release the Government’s full response to the Report in April 2019 following detailed discussions with officials and consultation between Government parties.

As previously indicated, it is the Government’s intention to pass any legislation to implement any policy changes arising from the report before the end of the Parliamentary term. No policy measures would come into force until 1 April 2021 – giving New Zealanders the chance to vote on any decisions made by the Government.

 

 

Year of reckoning for Ardern Government

The Labour led Government has to step up and prove it is as progressive and transformative as Prime Minister has promised.

In the Speech from the Throne at the beginning of the current term:

The programme I will outline today is ambitious.

This government is committed to major investments in housing, health, education, police, and infrastructure.

This will be a government of transformation. It will lift up those who have been forgotten or neglected, it will take action on child poverty and homelessness, it will restore funding to education and the health systems to allow access for all, it will protect the environment and take action on climate change, and it will build a truly prosperous nation and a fair society, together.

This will be a government of aspiration.

There will be a progressive tax system where everyone pays their fair share, according to their means…

This ambitious plan to take real action on climate change…

A nation in which fairness and equality of opportunity are not just aspirations but facts. And a nation in which all communities are empowered.

Last year was in the main underwhelming. Much was put on hold pending work groups and inquiries.

This year the rubber needs to hit the cycleway.

Sam Sachdeva – 2019: the year of action at Parliament?

A stream of working groups

For Jacinda Ardern’s Government, the biggest task may be dealing with the stream of reports and recommendations that start to come in from the various working groups it has set up since taking power.

Derided by National as an expensive abdication of responsibility and defended by the Government as necessary work after years of neglect, the truth probably lies somewhere in between.

What is undeniable is that the cost of running the groups will be eclipsed by the dollar figures attached to the recommendations that they make.

While the books are in healthy condition, Finance Minister Grant Robertson has already signalled to the Labour faithful that fiscal prudence is a guiding principle – an understandable position given accusations of economic vandalism hurled at left-wing parties, but one which could lead to disquiet if the governing parties are seen to be falling short of their voters’ expectations.

2019 may be the year when the public gets a better sense of whether the Government will be as truly transformational as Ardern has suggested, or if it may fall short of the hype (although it will be years or decades until we know for sure).

We will have to wait and see how things pan out through the year.

 

Increase in electric vehicle numbers, fleet still tiny

The Government has significantly increased the number of electric vehicles in it’s fleet.

NZ Herald:  Just how green is the ministerial car fleet?

The Government has confirmed it intends to transition its full fleet, including the 32 BMW 7-series vehicles, to emissions-free vehicles by 2026.

In total, 29 per cent of all ministerial vehicles – including Crown and self-drive cars are electric vehicles (EVs). That’s up from 2 per cent this time last year.

A major increase, with plans to continue converting the fleet to EVs.

The complete Crown fleet is made up of 72 vehicles, both owned and leased.

But a tiny fleet.

EVs aren’t viable for everyone yet. The up front cost will put many people off, with few fully battery powered vehicles and chargeable hybrids costing from about $50 thousand. With reduced energy costs the life time cost may be lower, and the Government can ‘afford’ to invest up front, but many people will be reluctant to do this.

This comes not long after the number of electric vehicles (EVs) on New Zealand’s roads passed 10,000 – that’s up from just 210 five years ago.

Although that’s a dramatic increase, it makes up just 0.25 per cent of New Zealand’s total vehicle fleet.

A tiny fraction of cars on the road.

Apart from around town driving there are other drawbacks. One major one is the limited range of EVs – it is improving, but still well behind the range of a car on a tank of petrol.

There is also only a small number of charging stations around the country.

And even if you can find a charging station on a trip you have to wait until the car is recharged. This takes much longer than pumping petrol.

One option without the limitations are hybrid EVs that use a petrol engine supplemented by battery power. These are much more competitively priced – new Toyota Corolla hybrids cost much the same as conventional Corollas. But they only reduce fuel use by up to a third, a significant saving making these economically attractive, but only a partial solution in reducing fossil fuel use.

Another issue I haven’t seen addressed – if there was a major shift to EVs, where would the power come from to charge them? Most of our current power supply is renewable, mainly hydro, with some wind.  A big increase in wind generation would create continuity of supply problems because of weather variability. Wind power can only supplement on demand power sources.

The Government is setting a good example switching to EVs, but they would do much better if they came up with a plan for how to fuel the inevitable increase in EV use.