Advocacy Report Reader

Environment & Infrastructure

Transforming Recycling Consultation Document

Published: May 17, 2022

Stage: Ongoing

Priority: Medium

Submitting To: Ministry for the Environment (MfE)

Issue for Business: The Government wants to improve recycling rates in NZ given that they are generally low per capita compared to many other countries. MfE has issued a Consultation Document which covers 3 broad proposals. 1. Container Return Scheme (CRS) 2. improvements to household kerbside recycling, and 3. Separation of business food waste.

Action: BusinessNZ has put in a submission generally supporting the sentiment outlined in the Consultation Document towards improving the rate of recycling but outlining a broad range of issues which need to be addressed before any of the proposals are finalised and/or implemented.

Outcome: Awaiting Government Decisions

Economy

Dividend Integrity and Personal Services Income Attribution

Published: April 29, 2022

Stage: Mid way through process

Priority: High

Submitting To: Inland Revenue Department (IRD)

Issue for Business: Unlike our standard submission process, BusinessNZ and the Corporate Taxpayers Group (which share a very similar membership base) prepared a joint letter on this discussion document that was sent to the Ministers of Finance, Revenue and Small Business on 28 April. The letter is included in our submission and outlines our main concerns with Inland Revenue’s proposals. Overall, we do not support the key proposals outlined, and believe they represent a significant overreach and will apply far wider than transactions which have been deliberately entered into in order to avoid the 39% tax rate.

Action: Submission sent 29 May.

Outcome: Awaiting submission review.

Economy

Driving Change: Reviewing the Road User Charges System

Published: April 20, 2022

Stage: Ongoing

Priority: Medium

Submitting To: Waka Kotahi NZ Transport Agency

Issue for Business: NZ Transport Agency wants to recover costs of damage to roads while also addressing other issues with little relation to distance travelled or vehicle weight within RUC.

Action: BusinessNZ is seriously concerned about the use of RUCs as a de facto mechanism for achieving other government objectives, such as promoting greater use of EVs to lower greenhouse gas emissions. The net impact is likely to be less money available for spending on roads as different transport modes are cross-subsidised by petrol-and diesel-powered vehicles. Second, many so-called externalities associated with on road transport - greenhouse gas emissions and accidents for example - are respectively already covered by the Emissions Trading Scheme (ETS) and by accident compensation (funded by the Motor Vehicle Account via petrol levies, Motor Vehicle Registration levies and vehicle insurance levies). One of BusinessNZ’s key points in our submission is that if after a thorough review of the RUC system, in government’s opinion there is a sound public policy reason for the continued cross-subsidisation of any new or existing road users e.g., EV owners, the nature of the subsidisation should be made transparent, and funding provided from general taxation. The funding will then show clearly in the government accounts, allowing the quality of the expenditure to be judged alongside all other areas of government expenditure.

Outcome: Awaiting Government decisions

Economy

Tax, Foreign Investment and Productivity draft long-term insights briefing

Published: April 14, 2022

Stage: Early in process

Priority: Medium

Submitting To: Inland Revenue Department (IRD)

Issue for Business: BusinessNZ took the opportunity to submit in September 2021 on IRD’s previous Document that consulted on its proposal to focus its 2022 Long Term Insights Briefing (LTIB) on tax and its impact on investment and productivity. We agreed on this focus given investment and productivity are important factors affecting long-term living standards in New Zealand. Therefore, we are pleased to see the release of the current Document, and broadly support the LTIB process whereby key future issues are examined by Government Departments every three years. The Document examines a number of potential measures to initiate a process of discussion around how to improve New Zealand’s inbound investment. Therefore, BusinessNZ outlines its priorities for future work. Overall, we believe a reduction in the company tax rate is the best initial step forward, although as mentioned in the Document there is no one silver bullet, so any option(s) chosen will also require broader remedial changes to the tax system.

Action: Submission sent on 14 April 2022

Outcome: Awaiting review of submissions

Economy

Tax Administration in a Digital World: An officials’ issues paper to support future tax administration

Published: March 31, 2022

Stage: Early in process

Priority: Medium

Submitting To: Inland Revenue Department (IRD)

Issue for Business: IRD are currently looking at possible policy changes required to support a more digital tax system. This covers frameworks for considering policy changes, and what the shift to digital could mean for a more digital tax system, taxpayers, Inland Revenue, and digital inclusion. It also covers specific areas for feedback, including: • The regulatory framework applying to external parties, including intermediaries and other entities which interact with the tax and payments system; • The rules, frameworks and scope of data sharing; and • How tax legislation could support a more digital future. To assist IRD in terms of their early thinking around a more digital tax administration system, members may recall BusinessNZ (with the assistance of the BusinessNZ Tax Group) released a white paper in November last year entitled The Future of Tax Administration in New Zealand. The Paper looked at how New Zealand’s tax administration could be improved with better technology and more partnerships with the private sector. The BusinessNZ Tax Group white paper can be viewed here: https://www.businessnz.org.nz/__data/assets/pdf_file/0009/229896/BusinessNZ-Future-of-Tax-Administration-Paper.pdf We note there is much cross-over between the BusinessNZ Paper and the IRD one. Overall, we support the work IRD are doing in this space, and believe the IRD Paper is a good first step to ensuring a collaborative effort between Government and the private sector takes place.

Action: Submission sent on 31 March.

Outcome: Awaiting submission review.

Energy

Price discovery under 100% renewable electricity supply

Published: March 16, 2022

Stage: Done

Submitting To: Electricity Authority

Issue for Business: The paper describes how our electricity supply system is likely to change physically with 100% renewable electricity supply and the likely impact on prices. The paper identifies seven key issues to be addressed: Real-time co-ordination, Ancillary services, Accurate price signals, Demand-side flexibility, contracts, orderly transition, and competition. In general, we agree with MDAG’s views on how electricity supply is likely to change and with the issues identified. This submission provides our view of the future according to our modelling, some general comments on the issues identifies, as well as some other wider risks to consider.

Economy

Submission on Te Ara Paerangi – Future Pathways Research, Science, and Innovation Green Paper

Published: March 16, 2022

Stage: Early in process

Priority: Medium

Submitting To: Ministry of Business, Innovation and Employment (MBIE)

Issue for Business: ExportNZ/BusinessNZ welcomes the opportunity to contribute at this early stage on the Ministry of Business, Innovation, and Employment’s (MBIE) Te Ara Paerangi – Future Pathways Green Paper for the Research, Science, and Innovation (RSI) sector. A thriving research and innovation sector is vital to keeping New Zealand businesses and exporters competitive on the international market, improving the sustainability of our business sectors, and ensuring that our future economy is productive, resilient, diverse, and able to leverage new opportunities.

Action: ExportNZ/BusinessNZ welcomes MBIE’s review of the Research, Science, and Innovation sector. ExportNZ/BusinessNZ are committed to playing an active role throughout this new process, including participation in the upcoming reference group. Our comments in this submission will be more general and will form the basis of our position on the sector going forward.

Outcome: Ongoing

Export & Trade

ExportNZ Submission on the International Treaty Examination of the UK-NZ Free Trade Agreement

Published: March 13, 2022

Stage: Ongoing

Priority: Medium

Submitting To: Parliamentary Foreign Affairs, Defence, and Trade Select Committee

Issue for Business: Export New Zealand (ExportNZ) welcomes the opportunity to submit on the international treaty examination of the UK-NZ Free Trade Agreement (UK-NZ FTA).

Action: ExportNZ believes the UK-NZ FTA achieves these aims and we support the ratification of the UK-NZ Free Trade Agreement.

Outcome: Ongoing

Energy

Onshore fuel stockholding

Published: February 28, 2022

Stage: Done

Submitting To: Ministry of Business, Innovation and Employment (MBIE)

Issue for Business: The consultation paper discusses various levels of stocks to be held physically onshore by fuel wholesale suppliers as a means to increase our fuel security in the event of a fuel disruption, how to implement this requirement and various proposed structures to manage this requirement. We note changes to the refinery are unlikely to impact on fuel security in the case of domestic supply interruptions but may increase the risk of disruption in an extended closed border event. We acknowledge increased fuel stocks held within New Zealand would provide security against this particular scenario, however we caution that any moves to increase security must be balanced against the increased costs faced by consumers.

Environment & Infrastructure

Our Future Resource Management System

Published: February 28, 2022

Stage: Ongoing

Priority: Medium

Submitting To: Ministry for the Environment (MfE)

Issue for Business: Policy proposals where Ministers have made initial decisions on matters beyond the scope of the Natural and Built Environments Exposure Draft.

Action: BusinessNZ has made a submission to MfE pointing out that while BusinessNZ was supportive of the intent of many of the changes outlined in the Draft Natural and Built Environment Bill (2021), we were concerned as to how these would be implemented in practice. The Discussion Document has continued to effectively kick for touch in respect to Freshwater Allocation. It just says that “The Government has committed to working to achieve efficient and fair allocation of freshwater resources having regard to all interests, including Māori and existing and potential new users” (page 16). This is a cop-out: resource allocation issues, including dealing with over-allocation etc, need to be addressed. The distinct danger is that if account is not taken of such factors, government will be able to ride rough-shod over existing rights. If it does so, the effect on investment will be chilling.

Outcome: Awaiting Govt decisions

Economy

Residential Building Supplies Market Study – Preliminary Issues Paper

Published: February 4, 2022

Stage: Early in process

Priority: Medium

Submitting To: Commerce Commission

Issue for Business: The Commerce Commission has stated that the purpose of this market study is to look at whether competition is working effectively within the residential building supplies industry and if not, what might be done to improve it. While BusinessNZ supports well-functioning and competitive industries, we are also conscious of the disruption such studies can cause, not to mention the potential for regulatory outcomes that do not align with any problems identified. Simply put, any market study that the Commerce Commission undertakes needs to be done properly. Therefore, BusinessNZ has raised some key aspects that we believe the Commerce Commission needs to keep in mind going forward with the investigation.

Action: Submitted to the Commerce Commission on 4 February

Outcome: Awaiting next stage of year-long investigation.

Energy

Market Monitoring Review of Structure, Conduct and Performance in the Wholesale Electricity Market

Published: December 22, 2021

Stage: Done

Submitting To: Electricity Authority

Issue for Business: Reviews electricity spot prices (from January 2019 up to and including the first two quarters of 2021) to assess whether electricity spot prices were determined in a competitive environment. Undertaken in response to sustained high spot prices since the Pohokura outage, asking if spot prices reflect underlying supply and demand fundamentals. We note the data do not provide any conclusive evidence to suggest there are competitive issues to be addressed. We urge the Authority to be cautious about the conclusions it draws from this analysis and proposing any changes where there is a lack of evidence.