edithatogo/nz-hansard-corpus huggingface dataset:
Williams Arena; Brown SimeonARENA WILLIAMS (Labour—Manurewa): Thank you Madam Chair. I want to ask the Minister three questions about the difference between the provisions which will apply before July and the provisions which will apply after July. The first question is about given that there are a number of councils that will be referring parking fines into the court systems what procedural unfairness exists between those councils that progress them quickly and those councils that progress them slowly? We might assume because we haven't been provided this in the documents that smaller councils progress these matters with greater periods of time involved because the administration between levying the fine and then progressing it to enforcement might perhaps be longer. I'm asking about that procedural unfairness because different rates will apply at different times but essentially committing exactly the same offence in one town might result in a different result for claiming an offence in another town and I want to understand what that difference is.The second question is: how many court sessions are in train now? Because my colleague the Hon Dr Duncan Webb has been asking questions about how the delay in timing will affect prosecutions that are on foot now. We haven't got any information to understand the size of that problem. The Minister simply answered that the answer was the calendar but what we're trying to get to here is how many people are impacted by what is essentially a procedural unfairness here given that there is a change of law and a change of timing for exactly the same offences being prosecuted in exactly the same way.The third question is: have the courts taken these changes into account in their systems? And the fourth question is: has an appropriation been made for the Minister of courts for any flow-on costs expected from this?Hon SIMEON BROWN (Minister of Local Government): To answer the member's question there is no procedural unfairness because the point of this whole part is to ensure that for fines collected before that date there is a lower amount; after that date there's a higher amount and the imposition is on the council not on the individual. Then the question there is around the cost of actually implementing it. I would just like to remind members that it is well worth reading the cost recovery impact statement which actually even states the estimated cost to implement.
Webb Duncan; Brown SimeonHon Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you to the Minister for pointing that out because he actually informed me of some of the mechanics there that I wasn't fully aware of. That was very useful. So thank you. Always happy to cooperate if the Government knows what it's doing.But one of the questions I do have is about the tail here because as the Minister says the new regime applies only to fines imposed on or after 1 July and the old section continues to apply in respect of a fine imposed before or recovered after 1 July 2024. But I guess the question I have is this: there's going to be a whole lot of fines out there—you know hundreds of thousands of these things—and some of them grind their way through the courts slowly. Is he confident that there's a system in place where you're going to be able to silo off these ones that might be six months 18 months old and have to be dealt with quite differently because this is going to be presumably two entirely separate systems and what's the process for separately tagging—well the language of the Act is the fines under the old section and making sure they're distinct from the fines under the new section which is the amended section.So it's really a pretty simple question because what we don't want to see is a whole lot of confusion and the Invercargill situation cropping up where we had to go back and get the IT experts in unwind the whole thing and start doing additional payments. So it's really about that shrinking tranche of fines which were imposed prior to 1 July but where they go to court after 1 July and are therefore subject to the old section—what's the system for making sure that that all works.Hon SIMEON BROWN (Minister of Local Government): The answer to that question is called the calendar.
VoteA party vote was called for on the question That debate on this question now close.Ayes 68New Zealand National 49; ACT New Zealand 11; New Zealand First 8.Noes 49New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.Motion agreed to.CHAIRPERSON (Barbara Kuriger): The question is that the Hon Dr Duncan Webb's tabled amendment to clause 4 to replace 14%" with "5%" be agreed to.A party vote was called for on the question That the amendment be agreed to.Ayes 49New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.Noes 68New Zealand National 49; ACT New Zealand 11; New Zealand First 8.Amendment not agreed to.CHAIRPERSON (Barbara Kuriger): The question is that Ingrid Leary's tabled amendment to clause 4 to replace "14%" with "0%" be agreed to.A party vote was called for on the question That the amendment be agreed to.Ayes 49New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.Noes 68New Zealand National 49; ACT New Zealand 11; New Zealand First 8.Amendment not agreed to.A party vote was called for on the question That clause 4 be agreed to.Ayes 68New Zealand National 49; ACT New Zealand 11; New Zealand First 8.Noes 49New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.Motion agreed to.CHAIRPERSON (Barbara Kuriger): The Hon Dr Duncan Webb's tabled amendment to insert new clause 4A to provide compensation for victims and complainants is ruled out of order as being outside the scope of the bill.The Hon Dr Duncan Webb's tabled amendment to insert new clause 4A to provide discretion to the court in the percentage of fines retained is ruled out of order as being outside the scope of the bill."
Swarbrick Chlöe; Brown SimeonCHLÖE SWARBRICK (Co-Leader—Green): Thank you very much Madam Chair. I'd like to return to the line of questioning that I put to the Minister earlier which unfortunately we're yet to elicit a response to and that is particularly around the considerations that may have been given to the impact on local government revenue. In fact we have heard a lot from this Minister including throughout the election campaign when it comes to the money that local government has to play with to meet the challenges of our time and that infrastructural deficit.We heard just before in responses to other questions particularly from the Hon Dr Duncan Webb that the Minister was saying that if we did not make this increase from 10 percent to 14 percent then we would end up with basically the shortfall being paid for out of general taxation. Now this is a really important point and a question that I want to get a response from the Minister on. Because actually not all too recently we had a bill in front of this House in the form of the Housing Infrastructure (GST Sharing) Bill from the ACT Party. And we had a really interesting contribution from the member which called this a sensible piece of pragmatism which is sorely missing in this House." Going to the point that this was about GST or Government revenue sharing which the Minister has just said that he is opposed to with local government that contribution calling this "a sensible piece of pragmatism which is sorely missing in this House" was from none other than the Hon Simon Watts now our Minister of Revenue.To that effect my question for the Minister is whether those statements that he offered in response to the questioning from the Hon Dr Duncan Webb about how he does not intend to use general taxation in order to help support local government is to be seen as a movement away from the kind of support that we've seen not only from the ACT Party historically but also actually from New Zealand First who's campaigned on policies such as GST sharing. So my question—CHAIRPERSON (Barbara Kuriger): We're a bit out of scope so I want to see the question in scope please.CHLÖE SWARBRICK: My question for the Minister is did he have any meaningful consideration for other revenue raising measures that local government may have in the consideration of this legislation?Hon SIMEON BROWN (Minister of Local Government): Well I just want to remind members that this is a very narrow section in this bill. It is simply about replacing 10 percent with 14 percent. And as I answered that member when she asked her question earlier about the total cost impact all of the entities which are affected the total amount that this will cost for all entities including local government is $285000 in the next financial year."
Kuriger Barbara; Brown SimeonClause 4 Section 73 amended (Payment of fines to local authorities and other organisations that conduct prosecutions)CHAIRPERSON (Barbara Kuriger): Members we now come to clause 4. This is the debate on clause 4 Section 73 amended (Payment of fines to local authorities and other organisations that conduct prosecutions)". The question is that clause 4 stand part. Chlöe Swarbick. Chlöe Swarbrick: Thank you Madam Chair—CHAIRPERSON (Barbara Kuriger): Oh sorry—can I just let the Minister go first? Chlöe Swarbrick: Absolutely. CHAIRPERSON (Barbara Kuriger): Thank you. Hon SIMEON BROWN (Minister of Local Government): Thank you Madam Chair. Look this is a very narrow clause. It simply replaces "10%" with "14%" in relation to the payment of fines to local authorities in relation to how much the Crown retains from those fines to effectively cover the costs of running the administration of it. The Government chose that figure of 14 percent based on advice to align this with basically the fees charged by private debt collectors when collecting infringement fees for local authorities in order to ensure that they were recovering their costs appropriately. The ministry's advice to increase the proportion of fines retained to 14 percent was based on its understanding of the nature of fees charged by private providers but it was also taking into account that the proportion of the fine retained by the ministry is a contribution towards the costs of collection whilst private debt collectors are profit-driven. In that instance there the alternative for councils would be to use an external private debt collector and of course they would—based on this advice—charge a higher percentage because of course they would also be taking a percentage of that as profit. So 14 percent is looking at what the underlying costs are which is ultimately why we're making that change—to ensure that it's a cost-recovery model. CHAIRPERSON (Barbara Kuriger): Third time lucky—Chlöe Swarbrick."
VoteA party vote was called for on the question That debate on this question now close.Ayes 68New Zealand National 49; ACT New Zealand 11; New Zealand First 8.Noes 49New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.Motion agreed to.CHAIRPERSON (Barbara Kuriger): The question is that clause 3 stand part.A party vote was called for on the question That clause 3 be agreed to.Ayes 68New Zealand National 49; ACT New Zealand 11; New Zealand First 8.Noes 49New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.Clause 3 agreed to.
Kuriger BarbaraCHAIRPERSON (Barbara Kuriger): Members the vote on the closure to clause 1 was incorrectly recorded as Ayes 68 Noes 47. The result of the vote was actually Ayes 68 Noes 49. The record will be corrected accordingly.
Kuriger Barbara; Swarbrick ChlöeClause 3CHAIRPERSON (Barbara Kuriger): Members we now come to clause 3 and this is the debate on clause 3 Principal Act". The question is that clause stand part.CHLÖE SWARBRICK (Co-Leader—Green): Thank you very much for the opportunity to ask the Minister a number of questions about this Public Finance (Fines Collection Costs—Budget Measures) Amendment Bill.The questions that I would ask the Minister—and am hoping here for a bit of a back and forth—are whether he considered in the introduction of this legislation and in fact in the consideration leading up to the introduction of this legislation the fact that—the last time that I checked—back in 2016 the average amount of spending that occurred at a local government level in the OECD was approximately 11 percent per the local and central government proportions. Sorry the average was 30 percent in the OECD. But here in Aotearoa New Zealand we have less than half of that at approximately 11 percent. This is something that I've heard the Minister talk about quite a lot—the fact that we need to see more resourcing for local government in this country to be able to meet the challenges of the crises that it is facing in the infrastructural deficit.So when it comes to the fact that this bill will increase the proportion that central government can take back from local government when it comes to the collection of these fines I want to know whether the Minister had any consideration for the fact that local government is currently starved of resourcing and funding and whether he looked at any other potential avenues to support them with revenue generation.Those are questions for the Minister and I would hope that we can open up a bit of a back and forth here.CHAIRPERSON (Barbara Kuriger): Could we please hold that question to clause 4 because the "Principal Act" is basically all around increasing the percentage the Crown retains from the amount of fines recovered. When we get into clause 4 we talk about the local authorities there so if we could just hold that question."
VoteA party vote was called for on the question That debate on this question now close.Ayes 68New Zealand National 49; ACT New Zealand 11; New Zealand First 8.Noes 49New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.Motion agreed to.A party vote was called for on the question That the Hon Dr Duncan Webb's tabled amendment to clause 2 to replace 1 July 2024" with "1 July 2025" be agreed to.Ayes 49New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.Noes 68New Zealand National 49; ACT New Zealand 11; New Zealand First 8.Amendment not agreed to.A party vote was called for on the question That clause 2 stand part.Ayes 68New Zealand National 49; ACT New Zealand 11; New Zealand First 8.Noes 49New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.Clause 2 agreed to."
Wade-Brown Celia; Brown SimeonCELIA WADE-BROWN (Green): Thank you Madam Chair. I would like to ask the Minister whether he considers that increasing the costs to council after they have done all the work on consultation on the long-term plans and annual plans when they've been looking at their budgets they're trying to keep rates down they're working very hard in their costs and—bingo!—on 1 July they start having an increase—CHAIRPERSON (Barbara Kuriger): I'm not hearing about commencement; I'm hearing about cost at the moment. Has the member got a question about the commencement date?CELIA WADE-BROWN: Yes the commencement date of 1 July 2024 is in the coming long-term plan or annual plan period that councils have already consulted on. And actually my colleague Duncan Webb's amendment doesn't go far enough. It's a minor improvement but it should be from 1 July 2025 because otherwise there's no opportunity for councils to make more precise their budget as I think they are being asked to.So again I see you embodying the spirit of Minister Goldsmith but in your role as Minister of Local Government I assume you can give us some answers as to why you think you can impose this when the long-term plans are all but agreed.CHAIRPERSON (Barbara Kuriger): I want to make it very clear that the Minister is here in his role—I was going to say replacing or substituting Minister Goldsmith so it's not about the Minister's other portfolios unless he wishes to expand on that but he doesn't need to.Hon SIMEON BROWN (Minister of Local Government): No one Madam Chair can replace the Hon Paul Goldsmith but what I would say is in terms of the member's question in terms of 1 July 2025 versus 1 July 2024 as outlined in the Cost Recovery Impact Statement the anticipated revenue from increasing the percentage in the next financial year is only $285000 and of course that will be spread across you know all of the different organisations—councils entities which are applicable for that particular percentage. So the Government considers that to be very minor.
Williams Arena; Brown SimeonARENA WILLIAMS (Labour—Manurewa): Thank you Madam Chair for my first opportunity to ask a question of the Minister. I have a new line of questions for the Minister about the commencement date which relates to some information that this Parliament has learnt today about payment providers.Now members who have been following along closely with the post-Budget debates will know that three months is the time required for most payment providers both on a private provider basis and when acting for the Government to implement changes into their system. That was widely canvassed and is now on public record from the Hon Simon Watts. We also know from that Minister that he was able to consult with the payment providers for one month before today's date—about one month—because that is the time period that he presented to the House as a three-month period which was required for consultation. But there are only two months before this legislation was introduced into this House and the date on which it would commence. So we can assume that there was a month there for the Minister to consult.So my questions to the Minister are: which payment providers are providing the parking fines for councils and which ones for the courts? Are they the same ones that deliver those services like payments to employees that would need to take into account changes to the income tax rates? About the providers have those providers been consulted with for about the same period—for about one month prior to the introduction of this bill? Is that sort of the standard for this suite of bills which are about Budget measures? My last question before I move on is: do the payment providers need to take into account different measures on the fines side to those that are on the courts side given that the courts side are regulated in a different way and are a collection of a different kind of public levy?Hon SIMEON BROWN (Minister of Local Government): The fees are and the percentage is ultimately collected by the Ministry of Justice—and they will simply adjust how much they charge and how much they retain based on what the law and the regulations allow.
Brown SimeonHon SIMEON BROWN (Minister of Local Government): Oh look I thank the members for their questions. As they may be able to—oh sorry I'll bring the microphone down. Is that better? Thank you.Hon Member: Stand up.Hon SIMEON BROWN: Oh I've got to stand up—sorry I'll stand up. I'll stand up straight—is that better? I should stop slouching I'm sorry. Good questions there from the members. Obviously this bill does one part of the changes that the Minister of Justice is proposing. The bill deals with the additional anticipated revenue from increasing the retainings based on increase to 14 percent from 10 percent on 1 July 2024.As can be seen in the Cost Recovery Impact Statement there's also additional revenue from increasing the court costs and filing fees additional revenue collected through increase to enforcement fees and as members will be able to read there is a total on the bottom which outlines the total increased fees that this measure is increasing.Ultimately the reason for increasing the anticipated revenue from the retainings is because there is increased costs in recovering fines. As outlined in the general policy statement the increase is to ensure that this can cover the costs which have increased over time and it will help recover Crown costs. That is good public policy to ensure that good cost recovery is implemented across the activities that Government does. That is what this bill does.
McAnulty Kieran; Brown SimeonHon KIERAN McANULTY (Labour): Thank you very much Madam Chair. I appreciate that a lot. I didn't think I had a chance because I'm not sure if you've noticed Madam Chair but I'm not the tallest bloke and Duncan Webb was standing right in front of me but you picked me so thank you.While I'm still waiting for a response to what was a genuine and sincere proposal for an alternative title from the Minister I do have a question. A question that actually I think touches at the heart of this and certainly at the heart of our concerns that we've raised and that is what level of consultation was made with the local government sector.Now the reason I ask this question and that I'm so interested in this is it's actually the exact same question that I asked the Minister during the committee stage of the water reforms repeal bill. I asked the question of the Minister by my count six times. You know what's funny? He didn't answer once. That was interesting because I had a suspicion throughout that the Minister actually hadn't widely consulted the sector leading up to that on that specific proposal within the bill. As it turns out it appears that that is the case.So I think it's important that the committee gets a response from the Minister around this because ultimately it is the local government sector that is affected by this. We understand the rationale—whilst we do not agree with it we get that the Minister wants to do cost recovery hence my suggested alternative title. But at the end of the day it is the local government sector that loses out from this. They lose where the Government gains regardless of the justification or the reasons.Now if it is indeed the case that the Minister hasn't consulted with the local government sector that would be a shame indeed. In fact it would be an outrage to propose a bill under urgency as part of the Budget measure whilst they swear in their contributions that it isn't part of the Budget or anything to do with tax cuts even though it's in the title—although I propose it shouldn't be for that reason but never mind; we've made that point.What I'm saying here is the committee actually deserves to know the level of consultation with the local government sector. It may be actually that there has been considerable consultation—and that's fine. It might be as part of that consultation that the local government sector has said Yep fair enough. You gotta recover costs. We've also incurred costs as everyone has in the current moment but sure. Take 4 percent of what we would have got to cover your costs." If that is the case who knows that might actually change our mind. But it's important that the committee knows.Hon SIMEON BROWN (Minister of Local Government): I refer the member who's just sat down to page 10 of the cost recovery impact statement."
Rutherford Tom; Pugh MaureenTOM RUTHERFORD (National—Bay of Plenty): I move That debate on this question now close.CHAIRPERSON (Maureen Pugh): I'm not quite sure we've exhausted all of the questions on this particular clause.
Meager James; Pugh MaureenJAMES MEAGER (National—Rangitata): I move That debate on this question now close. CHAIRPERSON (Maureen Pugh): As I've just said it's a more fulsome debate than a clause by clause debate. So we have got a bit more material I think.
VoteA party vote was called for on the question That the Taxation (Budget Measures) Bill be now read a third time.Ayes 68New Zealand National 49; ACT New Zealand 11; New Zealand First 8.Noes 49New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.Motion agreed to.Bill read a third time.
Lu NancyNANCY LU (National): A majority of average-income Kiwi households will be better off from 31 July following the passing of this bill in Parliament later today. This bill gives effect to the coalition Government's promise to New Zealanders who are suffering with the cost of living crisis. Let me set the record straight: this bill is fully funded so won't add to inflation pressures. This is what a fiscally responsible Government should do and will do. I'm honoured to be the last member to contribute to this bill. So I'm very proud to commend this bill to the House.
Hamilton RyanRYAN HAMILTON (National—Hamilton East): It's really challenging while we listen to the drivel from the other side that's been there for six years; and I'm so glad we're bringing back reading writing and maths because there's one thing they don't seem to understand: you don't borrow to fund tax cuts. You let people keep more of their own money. I know they think it's funny. It's ironic. Actually it's about reducing your spending. It's something you didn't learn and that's why you're now in Opposition. And while the member Chlöe Swarbrick yelled at us for nine minutes in her debate she didn't properly read the regulatory impact statement from the Inland Revenue Department which says it is estimated that the tax package which includes a $25 increase to the in-work tax credit will reduce child poverty by around 14000 plus or minus 6000—so that's 20000 to 12000 children. We're reducing child poverty. So maybe it's time that you went back to school and did your own reading writing and maths. I commend this bill to the House.
Unkovich Tanya; Brownlee GerryTANYA UNKOVICH (NZ First): Once again I rise on behalf of New Zealand First in support of the Taxation (Budget Measures) Bill and I'm going to keep it brief. This bill is going to make a difference in the lives of many hard-working New Zealanders and that is why we will continue to deliver on what we campaigned on. That is why I'm very happy to commend it to the House. Thank you.Hon Dr Duncan Webb: I seek the Māori Party call Mr Speaker.SPEAKER: Just one moment—thanks very much for your advice but I'm in the middle of ruling so if you just let me do that before you offer your opinion I think we'll make better progress. So we have a similar split in the 10th call which is Labour and National speaking; it's Labour and Te Pāti Māori on this one. I think if we were to say that if Labour swapped in this place with Te Pāti Māori and took a 10-minute call now that would most likely leave a 10-minute call for National at 10. So with a 10-minute call—and I hope this doesn't prove too difficult or too much strain but I'll call on the Hon Dr—Ricardo Menéndez March: Point of order. Just confirming that the sixth slot will still be a split call with the Green Party having a five-minute second call.SPEAKER: No the Green Party doesn't—oh the Green Party has the sixth one. Oh I see the problem. OK in that case the Green Party should've taken the first five minutes in this. So look it's messy because the party hasn't got a representative here for a speaker at the moment—and that's not implied criticism or otherwise. I think in that case we'll take a five-minute call from Ricardo Menéndez March.
Wedd Catherine; Brownlee GerryCATHERINE WEDD (National—Tukituki): I rise to support this bill because it is all about supporting hard-working New Zealanders to keep more of what they earn. After 14 years they will finally be getting tax relief on 31 July. So I commend this bill to the House. SPEAKER: I call the Hon Peeni Henare for a split call.
Smith StuartSTUART SMITH (National—Kaikōura): Thank you Mr Speaker. As the nearly quarter of a million hits on the tax calculator website have shown today Kiwis are very eager to see this Taxation (Budget Measures) Bill be passed. So it's with great satisfaction that I commend it to the House.
Pugh Maureen; Verrall Ayesha; Watts SimonCHAIRPERSON (Maureen Pugh): I'm not going to put that question because I think there is still some detail that could be extracted but it's getting quite thin. I call the Hon Dr Ayesha Verrall. Hon Dr AYESHA VERRALL (Labour): Thank you Madam Chair. An area of importance to the health sector is the number of highly trained people that we have working overseas. Many of our young doctors undertake training overseas doing fellowships—as I did—in other jurisdictions in order to bolster their qualifications before ultimately coming back home to New Zealand. Just last week we met the president of the New Zealand Medical Students' Association—she reported she had $140000 of student loan debt before she even graduated. Now it would be normal even desirable for people in her situation to spend some of her training overseas and we're learning today that additional burdens of repayment are going to be put on those young doctors.I want to ask the Minister what modelling has been done what advice has been received on the likelihood of our talented young people returning home when they face higher penalties in terms of student loan debt repayments should they do so? We have over a thousand perhaps 1300 specialist vacancies in our hospitals; we have multiple junior doctor vacancies at our hospitals. That is part of what's contributing to the junior doctors being on strike at the moment—it's the high workloads that they face. So for these reasons I want to know about any impacts on particularly strategically significant workforces that this student loan additional repayment burden is going to have.Hon SIMON WATTS (Minister of Revenue): Well I'm glad the member Ayesha Verrall has realised that one of the opportunities that we do have is to encourage our doctors back to this country. One of the good things about the student loan scheme is that when they come back to New Zealand from overseas and have been here longer than six months they don't pay any interest on their loan. So there's a really good incentive for the health system in terms of workforce to come back to New Zealand and to set up roots and to work here in the health system because you won't pay any interest on your student loan when you're back home here in New Zealand.
VoteCHAIRPERSON (Maureen Pugh): The question is that debate on this question now close. Dr Lawrence Xu-Nan: Point of order. Point of order. Point of order. CHAIRPERSON (Maureen Pugh): Those of that opinion will say Aye"; to the contrary "No". When a vote is under way we do that in silence.Dr Lawrence Xu-Nan: I've been calling point of order sorry Madam Chair. It's just that we have an amendment that hasn't been mentioned at all—by my colleagues.CHAIRPERSON (Maureen Pugh): We're putting the vote now. I've heard the "Ayes". Those to the contrary please say no.A party vote was called for on the question That debate on this question now close.Ayes 68New Zealand National 49; ACT New Zealand 11; New Zealand First 8.Noes 49New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.Motion agreed to.CHAIRPERSON (Maureen Pugh): The question is that Arena Williams' tabled amendments to clause 44 be agreed to. A party vote was called for on the question That the amendments be agreed to.Ayes 49New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.Noes 68New Zealand National 49; ACT New Zealand 11; New Zealand First 8.Amendments not agreed to.CHAIRPERSON (Maureen Pugh): The question is that Camilla Belich's tabled amendment to clause 44(2) be agreed to.A party vote was called for on the question That the amendment be agreed to.Ayes 49New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.Noes 68New Zealand National 49; ACT New Zealand 11; New Zealand First 8.Amendment not agreed to.CHAIRPERSON (Maureen Pugh): The question is that Francisco Hernandez's amendment to delete clause 44 be agreed to.A party vote was called for on the question That the amendment be agreed to.Ayes 49New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.Noes 68New Zealand National 49; ACT New Zealand 11; New Zealand First 8.Amendment not agreed to.CHAIRPERSON (Maureen Pugh): Arena Williams' tabled amendment to delete clause 44 is out of order as being the same in substance as an amendment previously not agreed.A party vote was called for on the question That Part 5 be agreed to.Ayes 68New Zealand National 49; ACT New Zealand 11; New Zealand First 8.Noes 49New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.Part 5 agreed to."
Williams ArenaARENA WILLIAMS (Labour—Manurewa): Thank you Madam Chair. I'm looking forward to the Minister in the chair Simon Watts answering my questions about IRD's powers to recover what he has said is 90 percent of the student loan debt and the questions of my colleague the Hon Barb Edmonds about the IRD's ability to do this and whether he has sought advice on this because given his last answer we must be expecting a huge uptick in IRD's ability to reclaim that debt given that in the financial year ending June 2023 they only managed to recover $16000 of it. He must have some new tricks up his sleeve and I'm really interested in him answering the questions that I put to him which he hasn't answered for the committee.But I want to ask a new line of questions to the Minister. The first is: does he agree with his colleague the Hon Penny Simmonds who said on 30 May The late payment interest for overseas and New Zealand based borrowers"—and New Zealand - based borrowers—"will also increase by 1 percent."The second question of five I have about that is where that is in the bill. Thank you."
Woods MeganHon Dr MEGAN WOODS (Labour—Wigram): Oh it is me. Thank you—thank you Madam Chair. I just have a follow up question for the Minister around the research and development tax incentive and I thank the Minister for has very useful and informative answers he gave to my earlier contribution.But my question is in response to clause 43(2) and I asked the Minister about the rationale and the reasons why it is that there's a retrospective element to this clause of the bill and the Minister hasn't answered on that. So I just would like it confirmed 43(2)—Hon Simeon Brown: Well only if you ask good question.Hon Dr MEGAN WOODS: I am answering questions—if you'd like to take a call Mr Brown I suggest you do.In terms of the retrospective element of clause 43(2) the Minister has told us there's probably only around 10 companies that are in this situation of having the wrong filing name in their return. My question for the Minister is whether he took advice on whether there were administrative fixes to this either by officials within Inland Revenue or whether there was ministerial discretion that could be used. Because what I'm understanding: this is a legislative fix that's taking the time of the House for 10 or fewer companies—what advice he was given by officials then what options he considered when making this policy decision?I don't disagree with what we're trying to fix. There will be companies—and only literally a handful of them—that have filed under the wrong name and should be eligible for this tax rebate and we're fully in support of that. But just trying to understand why it was that the Minister opted to insert clause 43(2) into this legislation rather than going for an administrative fix.
Xu-Nan LawrenceDr LAWRENCE XU-NAN (Green): Thank you Madam Chair. I'm flabbergasted at the fact that we're talking about penalising our own people overseas who are trying to gain international experience—which I'm sure is something that the governing parties are interested in—and then bringing it back home. But we are now creating this barrier for them to come back home. Sometimes I do wonder about the Government's priorities.So there are two parts to this particular section. There is the first part that we're looking at which is the increase of the rate by 1 percent for five years which we've said but five years makes a lot of difference. It's the difference between whether you're eligible to vote or not. For five years for the interest on the student loan for overseas New Zealanders. However it also means there is a second part which is the increase on the late payment by 1 percent. So that's 2 percent.Now the question to the Minister—and this is genuine. I would like to get some clarification from the Minister for those overseas New Zealanders which I have mentioned before that currently over 70 percent of overseas New Zealanders are unable to make their payment which again would then become late payment. In these kind of cases would these overseas New Zealanders get penalised by 1 additional percent as the base of their student loan payment on top of that an extra 1 percent as part of their late payment fee? Is that going to be the case that those who are unable to pay—and that's more than 70 percent we heard it. And the Minister has mentioned before that over 90 percent of the late payment that we're seeing right now are from overseas New Zealanders. So in these cases when we have this incredible number of people who are unable to make their payment due to a variety of reasons I mentioned because of the fact that maybe they are studying overseas they are gaining their higher education overseas.I can say to you in my own profession when I was doing my masters and my PhD I was encouraged to go overseas for my PhD because if you want work in academia apparently you need to have that overseas experience. And this is something that you see in academia in general. So for these people who will not be earning that much of an income—in fact will be paying sometimes exorbitant fees overseas to international institutes in order for them to take up post-graduate education or if they're in a precarious employment situation or they might be overseas looking after a family member so is unable to take work—are they being penalised for 1 percent of the base interest rate and yet when they are late on their payment being penalised by an extra percent for their late payment on top of that? So if the Minister could provide that clarification that would be great.
Watts SimonHon SIMON WATTS (Minister of Revenue): Thank you very much Madam Chair. The fair value increase as a result of the change in the interest rate is $20.5 million and that will flow through as a result of the increase by 1 percent.Prior questions in regards to the increase in interest on loans and being referred to as a tax is simply just not the case. When you borrow money you pay interest and when you increase the interest rate on that loan to pay someone else that's not a tax. So just for clarity a couple of the members were drawing that conclusion and it's not one based on fact.
Watts SimonHon SIMON WATTS (Minister of Revenue): Thank you very much Madam Chair. In response to that question in regards to the considerations—absolutely we explored all options that were available that would avoid the need to have to undertake a legislative change. But official advice through to me was clear that the only way in which this could be affected was through legislative change. We didn't have the options around administrative change or any other discretion within the commission's power. So we are where we are. We did kick the tires in regards to that to make sure that was the only pathway because there's plenty of other things that we can be doing. But that's the reality of where we landed.To the Hon Barbara Edmonds' question in terms of the value—we are reflecting when we talk about increasing the value of the scheme the fair value of the scheme at a Crown accounts level. So the immediate effect of changing that will increase that value of the overarching book.
Watts SimonHon SIMON WATTS (Minister of Revenue): Thank you very much to the members for those questions. I'll start with the research and development tax credit question. So my officials advise me that it is less than 10 taxpayers who are potentially caught within that. The fiscal consequence of remediation for those taxpayers as a result of this change is probably less than $10 million in terms of fiscal implementation. I don't have any operational detail in terms of what the nature of those taxpayers are but that's the scale of the size. I think the reality is that the change that we're making is sensible and pragmatic for the reality of making errors in that regard.In regards to the broader policy questions around the research and development tax credit and the role in which it plays you know not confined and relevant necessarily to this aspect of the bill but more broadly obviously it's an area that we're having an ongoing review on because it is an important aspect in terms of our broader economic growth agenda.The question raised by the Hon Duncan Webb in regards to I think it was clause 44(2) and (3) in terms of the base interest rate" definition aspects simply there Duncan Webb what we're just reflecting is that the changes that we're proposing is only for five years. So in effect it will come in and then it will come out. When I'm saying that I'm referring to the 1 percent increase and hence why you've got two aspects of definition there that flow through. It allows the reality of the five-year implementation to revert back to what it is before we make that subsequent change."
Watts SimonHon SIMON WATTS (Minister of Revenue): Thank you very much Madam Chair. Well we're nearly there aren't we? We're nearly there aren't we? You can hear on this side of the House—hey we are nearly there.Look in regards to the question that was asked about payment of debt IRD have a wide range of options available for those that are in hardship who genuinely have the inability to pay due to their financial circumstances. We are not talking about those individuals; we are talking about those individuals who simply make decision that I do not want to pay my student loan." For those individuals it is absolutely fair and reasonable that there should be enforcement and compliance to ensure that the Government gets the money back that they are owed. That's what we're talking about here. The change in regards to the percentage is dealing with the value of the scheme—that's what will affect that change. But do not confuse or conflate the reality of these people that potentially are in genuine hardship cases—there are procedures and protocol around that. We are talking about a large number of people that genuinely are choosing to say "I am not going to pay this back.". That is not appropriate and that is not taking personal responsibility for the fact that they owe this Government money."
Watts SimonHon SIMON WATTS (Minister of Revenue): Thank you very much Madam Chair. Unsurprisingly with a budget process we don't consult with the public before we release the budget. So in this case we didn't consult with student loan borrowers before making the announcements yesterday but that's no different to any budget process in that regard. The key challenge that we are reflecting here is the change in value due to the implications of inflation. We've time-bound that. We haven't made it a permanent difference. So we are going to look to reverse that back to the status quo within a five-year period. And that simply just reflects the uniqueness of both the inflationary environment and also the implications around the interest rate on that loan. And that is a scenario that we haven't seen play through historically but it is our point of view that we do want to revert back to the status quo in that regard.I think what is interesting in a broader context—slightly outside of here but in terms of you asked about student loan—nearly 90 percent of that outstanding student loan debt is owed by overseas borrowers. And the significance of the outstanding debt owed by taxpayers in which we inherited in October is significantly higher than where it was in 2017. And student loans are an area of which we've also seen significant growth. Hence why in the Budget we've allocated $116 million to increase enforcement and compliance to collect the money that is owed to the Government because every dollar that we don't collect is a dollar that potentially needs to be found from somewhere else. And that is the work. And within that allocation of compliance funding there is specific money ringfenced for targeting the collection of money that is owed in regards to student loans.
Hernandez Francisco; Webb DuncanFRANCISCO HERNANDEZ (Green): Thank you Madam Chair. So just for a little bit of context this part of the bill is something that's actually relevant to my portfolios. I'm the tertiary education spokesperson for the Green Party—something that aligns well with my student politics background. My question is around the changes to the student loan scheme that's being proposed. Are there any planned further changes that this Government is considering and if not will he rule out scrapping interest free student loans for New Zealand - based borrowers? Because that's something that's really concerning to us here. The interest free student loans is a really good way to make sure that people are able to study.And the second part of my question is that obviously a lot of the tertiary institutions in the country are in tough times at the moment—partly induced by the COVID economic crisis and partly induced by the border shutdowns and the lack of international students. So my question around this is has there been any analysis or modelling done on how kind of disincentivising study might affect the further viability of our tertiary institutions like the world-class one in Dunedin called the University of Otago? Thank you.Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you Madam Chair I've got a very short probably question. Over here we have been looking at clause 44 and we're actually quite perplexed because it seems to do two quite inconsistent things. I understand how the base rate works generally—you take an average of the five year - bond rate and then you add a percentage to it. And I've got the definition of base interest rate" from the student loan Act in front of me and it notes that you add 0.74 of a percent to the rate to get the actual base rate. But clause 44 says firstly "replace '0.74' with '1.74'". That makes sense; you get a bit more money for the Government there. But then in the very next subclause it says "replace '1.74' with '0.74'" and 1.74 doesn't appear in the definition section. So unless the Minister is doing a little circle and replacing it and then unreplacing it it actually seems to be a bit of an Alice in Wonderland nonsense provision. It may be that it's just a drafting error because the Minister's been under a bit of pressure and this is a bit rushed and hasn't been given the scrutiny that perhaps it should have had in a select committee but it's actually a really simple quick question: is it a drafting error or if it's not a drafting error can the Minister explain where the "1.74" is in the definition in clause 41 that he's replacing with "0.74"? Because for the life of me I can't see it."
Kuriger Barbara; Watts SimonPart 5 Other amendments CHAIRPERSON (Barbara Kuriger): Members we come to the debate on Part 5. Part 5 is the debate on clauses 40 to 44 other amendments to Tax Administration Act 1994 and Student Loan Scheme Act 2011. The question is that Part 5 stand part.Hon SIMON WATTS (Minister of Revenue): Thank you very much Madam Chair. I thought it would be useful to provide a little bit of context in regards to the changes that are being proposed in this part of the bill because they are specific in nature and just will be helpful in order for us to get to any questions if there are any.The research and development tax incentive the RDTI allows businesses undertaking eligible R & D activities to claim a 15 percent tax credit on eligible R & D expenditure. To participate in this process a business must enrol and submit an application for approval and then file a return subsequently. Under the current status quo if a business makes a mistake that invalidates that approval then they will not be eligible for the R & D tax credits.One of the specific mistakes that they could make is when they have the wrong entity that is listed on the application process. Under the current legislation there's no ability for the Commissioner to take into account a simple error and mistake and remedy that. They simply are ineligible to be able to claim that credit which obviously doesn't sound—and nor is in our assessment—fair and reasonable and hence why we're proposing to make a change to ensure that if such a small number of taxpayers do make such mistakes then there is discretion by the Commissioner to make changes.