Advocacy Report Reader

Immigration, Education, Skills & Training

The future of workforce supply

Published: February 9, 2023

Submitting To: BusinessNZ

Issue for Business: Business New Zealand asked Sense Partners to summarise the current state and outlook for New Zealand’s pipeline of talent, related issues, and opportunities. We found that labour shortages have intensified over time and will intensify further with an ageing population. The issue is global and hence the competition for talent will also be global. While we have used immigration as an important source of labour in the past, we will need to be more consistent and deliberate on our immigration policy in the face of global demand for talent.


Five-year review of the Monetary Policy Committee Remit that guides monetary policy decisions

Published: January 27, 2023

Submitting To: Reserve Bank of New Zealand

Issue for Business: The purpose is to get feedback on the Remit that guides decision-making by the Monetary Policy Committee (MPC) on monetary policy and Official Cash Rate (OCR) Adjustments.

Action: BusinessNZ's submission broadly supports the policy discussions on issues outlined within the Consultation Paper, including the Reserve Bank's recognition of the need to avoid having too many objectives for monetary policy and hence the decision to deem distributional and climate change issues as being 'out of scope'.

Outcome: The Reserve Bank will use feedback to inform their advice to the Minister of Finance on whether the Remit should be replaced or amended.


Fuel Industry Amendment Bill

Published: January 23, 2023

Submitting To: The Economic Development, Science and Innovation Select Committee

Issue for Business: The Bill is amended in two consequential ways. First, it gives the Commerce Commission the power to investigate competition within New Zealand's fuel industry, and subsequently recommend introducing price regulations. Second, it gives the Minister the ability to impose price regulations, that could be the same as, or different to, the Commission's recommendations. BEC is strongly opposed to the amendment to Bill. To start with, BEC believes that there is inadequate evidence to demonstrate uncompetitive behavior on behalf of fuel suppliers. The amendment gives the power of price controls. BEC is opposed to implementing price controls. BEC's submission outlines the vast negative and unintended consequences that often arise from price controls. The Bill lacks any cost and benefit analysis, including no terms of reference. BEC is concerned that the price of fuel risks being set by political pressures, rather than more efficient market forces. The Bill will likely worsen competition, as artificially lower prices do not send a signal to potential competitors to enter the market. Price ceilings increase demand, and in this case is contradictory to New Zealand's aspirations of reducing fuel consumption, and meeting the climate target of net-zero by 2050.

Outcome: Ongoing. The Bill still sits in the Select Committee.


Crown Minerals Amendment Bill

Published: January 23, 2023

Submitting To: The Economic Development, Science and Innovation Select Committee

Issue for Business: The amendment to the Bill introduces and amends several changes. Firstly, the Bill introduces statutory requirements for the mineral extracting sector to engage with iwi and hapu. BEC supports the underlying premise and intent of the amendment. However, BEC questions the policy problem, considering the industry largely has a good working relationship with iwi and hapu already. The statutory requirement runs the risk of creating a tick-box exercise, with the industry complying with the minimum. Secondly, the Bill amends the wording 'promote' the prospecting and extraction of crown owned minerals with ''manage.'' The amendment also changes ''promote permitting'' with 'offer permits from time to time.' BEC notes that these last two amendments seem minor and relatively insignificant. However, they both send a clear anti-mining signal, and is likely to deteriorate investor sentiment towards New Zealand's minerals sector. Throughout the submission, BEC reiterates the ongoing importance of adequate critical minerals supply throughout the energy transition. BEC believes the changed wording should not proceed.

Outcome: Ongoing. The Bill remains in select committee.


Sustainable Biofuel Obligation Bill

Published: January 11, 2023

Submitting To: Environment Select Committee

Issue for Business: The Sustainable Biofuel Obligation proposed that fuel suppliers had to reduce their emissions by at least 1.2% in 2023, and increase their reductions out to 2030, by using blended biofuels. In BEC's original submission in July 2022, BEC outlined that the obligation's start date April 1 2023, provided insufficient time for suppliers to build the necessary infrastructure and inform consumers on the safety of biofuels. We recommended at least a two year delay, or a reduced target in the initial years. Following BEC's July 2022 submission, the Government extended the timeline for the biofuels implementation by one year. The new starting date will be April 1 2024. However, the reductions target for year one would increase from 1.2% to 2.4%. This places significant strain on the industry to source limited global supply. The proposal has been introduced in parliament. BEC's submission reiterates the tradeoff between implementing this obligation and price. Among many other factors mentioned in this submission, BEC states the lack of clarity given about the exact sustainable nature of international supply. Land use change and feedstock uncertainty must be addressed.

Action: We spoke at the select committee about the submission, outlining the potential cost to consumers and the problems of global supply constraints, and the estimated supply concerns in the future. We reiterated the significant cost of updating infrastructure and flow on cost.

Outcome: The Government decided to abandon the Sustainable Biofuels Obligation due to cost of living considerations.


Business Payment Practices Bill

Published: December 21, 2022

Submitting To: The Economic Development, Science and Innovation Select Committee

Issue for Business: BusinessNZ submitted on the Bill that would create the legislative framework for transparency around business-to-business payment terms and practices in New Zealand.

Action: Completed

Outcome: Awaiting report back from the Select Committee


Promoting competition in the wholesale electricity market in the transition toward 100% renewable electricity

Published: December 14, 2022

Submitting To: Electricity Authority

Issue for Business: The Electricity Authority (EA) decided to investigate competition in New Zealand's wholesale electricity market after sustained high prices since 2018. The EA launched this investigation in 2020. The Authority wanted to know if there was a problem with competition in the wholesale market, and if there was a problem, they wanted to know what extent does anti-competitive behavior led to insufficient generation and high prices.

Action: BEC has written a submission generally supporting the Authority's findings -- that higher prices were caused by underlying supply and demand conditions, not competition. We supported the vast majority of the Authority's recommendations which included actions to invite other Ministries to act on policy uncertainty, capital investment

Outcome: The Authority concluded that sustained higher prices over the observation period, between 2018 to 2021, was likely explained by underlying supply and demand conditions. The Authority concluded that there was insufficient evidence to justify significant intervention and structural change. The Authority believed substantial changes would create uncertainty , and most likely lead to lower levels of generation and thus higher prices. BEC supported the EA's conclusions. However, BEC acknowledges the significant higher prices paid by users in the last three years. This is a large risk for New Zealand's competitiveness. We are also open to investigating additional market structures, such as capacity mechanisms, as sufficient capacity is increasingly becoming a problem, as the price of carbon and thermal increases into the future.

Employment Relations

Consultation on ACC’s Accredited Employers’ Programme

Published: November 6, 2022

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

Issue for Business: ACC is recommending changes to the Accredited Employers Programme which allows large employers to cover their employees’ claims for work injuries in return for a reduction in their ACC employer levies. BusinessNZ's submission to MBIE responds to the proposed changes.


Taxation (Annual Rates for 2022-23, Platform Economy and Remedial Matters) Bill

Published: October 31, 2022

Submitting To: Finance and Expenditure Select Committee

Issue for Business: While the Bill covers various tax issues, BusinessNZ has concentrated its discussion in relation to both information reporting and GST for the platform economy, as well as Fringe Benefit Tax changes for certain public transport fares subsidised by an employer.

Action: Submission sent to Select Committee.

Outcome: Awaiting Select Committee report.


Inefficient Price Discrimination in very large contracts

Published: October 31, 2022

Submitting To: Electricity Authority

Issue for Business: In August 2021, the Electricity Authority (EA), in conjunction with their review into the wholesale market, released a paper on the possibility of Inefficient Price Discrimination within very large contracts of electricity, in particular, contracts with 150MW>. The EA believed contracts like Tiwai resulted in higher bills for consumers. BEC submitted that there remains insufficient evidence to prove this claim. The EA announced intervention in August this year, with a proposal to amend the code.

Action: BEC responded to this proposed code amendment in opposition for four reasons. Firstly, it would likely create uncertainty and regulatory risk, hurting investor sentiment in New Zealand (an extra barrier to investment in matters like hydrogen) . Secondly, the proposal was overly and unnecessarily intrusive, especially clause 13.271, which allows the EA to request ANY information. Thirdly, the proposal limits contractural freedom. Lastly, there remains insufficient evidence to prove generators sell below cost.

Outcome: Awaiting the Authority's decision

Export & Trade

Three Year Review of the CPTPP – Inclusive Trade Action Group

Published: September 30, 2022

Submitting To: Ministry of Foreign Affairs and Trade (MFaT)

Issue for Business: At the time of signing the Comprehensive and Progressive Trans Pacific Partnership (CPTPP), New Zealand, together with Canada and Chile, signed the Joint Declaration on Fostering Progressive and Inclusive Trade (attached). The Joint Declaration founded the Inclusive Trade Action Group and, amongst other provisions, committed New Zealand to reviewing the effectiveness of the CPTPP three years after entry into force. MFAT asked for input into this review process.

Action: ExportNZ wrote a letter to MFAT with our feedback on the impact of the CPTPP on inclusive trade.

Outcome: MFAT will finalise their review in October 2022.

Export & Trade

Modernising Our Export Assurances Systems: Legislative Options

Published: September 29, 2022

Submitting To: Ministry for Primary Industries (MPI)

Issue for Business: MPI requested feedback on legislative options for food and fibre exports to help them regulate in response to overseas market access requirements.

Action: ExportNZ and the New Zealand International Business Forum wrote in support of Legislative Option One which would allow for for the legislation for new export requirements to be put in place for food and fibre exports that are outside the scope of the Animal Products Act and Wine Act.

Outcome: Awaiting the next stage of the process, expect MPI to have selected an option and will consult again.