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Bills introduced to Parliament

12 March 2020

Two bills have been introduced to Parliament.

Child Support Amendment Bill

The Child Support Amendment Bill amends the Child Support Act 1991. It aims to simplify penalty rules, introduces payment of financial support by compulsory deduction, imposes a time bar of four years, and inserts a new definition of "income" in to the legislation.

The child support scheme will move to Inland Revenue's new systems and processes in April 2021, and this move is seen as creating opportunities to improve the administration of the scheme.

The bill would move the second phase of the initial penalty to 28 days after the due date. The intent is to give Inland Revenue time to contact the customer with the aim of working with the person to get them back on track.

The $5 minimum penalty rule will no longer apply. he penalty charged at the expiry of the due date will be 2% of the outstanding balance. That aims to ensure that the 2% penalty imposed is in proportion to the amount outstanding.

For people new to the child support scheme, a grace period will apply during which late payment penalties will not be charged. The grace period will start on the first due date and will apply for the following 60 days. It will allow a liable person time to adjust to making financial support payments.

A newly liable person will pay their financial support obligations by automatic deduction from source deduction payments made by their employer. That will be regardless of whether or not they have defaulted on their obligations. The amendment will encourage compliance by helping newly liable parents get their payments right from the start.

There will be time limits placed on reassessing child support years by introducing a rule that would restrict reassessments of a child support year to a 4-year period from the end of the relevant child support year. That proposal will reduce uncertainty for parents.

The definition of income used for child support is amended to better reflect a parent’s financial capacity by incorporating investment income and no longer offsetting losses from earlier years.

If passed, the Act will come into force on 1 April 2021.

Gas (Information Disclosure and Penalties) Amendment Bill

The Gas (Information Disclosure and Penalties Amendment) Bill has been introduced by Energy Minister Megan Woods. It amends the Gas Act 1992 to provide for enhanced information disclosure requirements for the gas market and to ensure that settings around enforcement and penalties are suitably robust.

Information provided by MBIE says prolonged natural gas supply outages at the Pohokura production station in 2018, combined with planned outages at other production stations and dry spring conditions, led to record gas spot market prices and high electricity wholesale prices. These outages have highlighted a number of issues in relation to the transparency of information in the gas market, which can have a wide range of effects.

The policy to be given effect to by the bill was captured by a discussion document released in 2019, Options for amending the Gas Act 1992.

The bill amends section 43F of the Act, which sets out the scope of regulation-making powers, to enable gas governance arrangements to be made that provide for a broad regime for the disclosure of information about matters that may have a significant downstream impact or may contribute to the risk of critical gas shortages. The bill also clarifies the existing policy intent that regulations made under section 43F for arrangements relating to outages and other security of supply contingencies may apply across all industry participants and consumers (excluding domestic consumers).

Also amended is the penalty regime for industry participants by increasing the maximum pecuniary penalty able to be imposed by the Gas Rulings Panel from $20,000 to $200,000. This amendment addresses concerns about the low level of civil pecuniary penalty able to be issued by the Gas Rulings Panel, particularly for situations where a wide range of consumers may be affected by a potential breach. The bill brings the penalty limits into alignment with the equivalent penalty under the Electricity Industry Act 2010.

A new civil pecuniary penalty is introduced to replace the current criminal penalty, with a maximum of $200,000. The intention is for this penalty to be used to deter breaches of regulation by consumers who are not classified as industry participants. The bill also makes a number of supporting changes to enforcement provisions in the Act, and seeks to clarify current practices around these.

Some provisions in the bill would come into force on the day after the date of Royal assent, with the rest coming into force by Order in Council, with a six-month limit imposed.

Last updated on the 12th March 2020