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Parliament passes three bills and adjourns

26 March 2020

Three bills were introduced and each given three readings by the House of Representatives on Wednesday, 25 March. The House adjourned at 5:31pm after agreeing to a motion that it adjourn until 2 pm on Tuesday, 28 April 2020.

A further two bills not related to the just-declared National State of Emergency were also introduced.

Imprest Supply (Third for 2019/20) Bill

This bill was introduced by Finance Minister Grant Robertson. It is required to ensure that the Government has sufficient supply to implement Cabinet decisions made or otherwise finalised after the contents of the 2019/20 Estimates were closed off in excess of the amounts appropriated in the Appropriation (2019/20 Estimates) Act 2019 and authorised in the Imprest Supply (Second for 2019/20) Act 2019 and to meet contingencies.

Clause 4 states the purposes of the legislation as being to authorise expenses and capital expenditure to be incurred by the Crown and Offices of Parliament during the 2019/20 year in advance of appropriation in an Appropriation Act; and to authorise capital injections to be made to departments and Offices of Parliament during the 2019/20 year in advance of authorisation under an Appropriation Act.

The Imprest Supply (First for 2019/20) Act 2019 provided the sole financial authority from the start of the 2019/20 financial year until the Appropriation (2019/20 Estimates) Act 2019 came into force. The Imprest Supply (Second for 2019/20) Act 2019 provided financial authority additional to that provided in the Appropriation (2019/20 Estimates) Act 2019. This bill sought financial authority additional to (and not in substitution for) that provided in the Imprest Supply (Second for 2019/20) Act 2019.

The  bill was given three readings. It comes into force on the day after it receives the Royal assent. Clause 3 provides that the Act is repealed on the close of 30 June 2020.

COVID-19 Response (Taxation and Social Assistance Urgent Measures) Bill

The omnibus bill was introduced by Revenue Minister Stuart Nash. It amends several pieces of legislation: the Income Tax Act 2007,  Tax Administration Act 1994, Goods and Services Tax Act 1985, Social Security Act 2018, Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 and also the Commissioner's Table of Depreciation Rates.

The policy proposals in the bill are all aimed at assisting the Government’s response to the economic impacts of the COVID-19 outbreak. It includes targeted measures aimed at providing relief to those that have been economically affected by the COVID-19 outbreak. The Bill also includes measures aimed at addressing the broader economic impacts of the outbreak.

Because of the short timeframe available for developing a policy response to COVID-19 no public consultation was undertaken on the proposals in the bill. As such, the tax policy measures within the bill were not been developed in accordance with the Generic Tax Policy Process. The key measures in the legislation are:

  • Reintroduction of depreciation deductions for non-residential buildings.
  • Increasing the threshold for having to pay provisional tax from $2,500 to $5,000.
  • Temporarily increasing the $500 threshold to $5,000 for deduction of the full purchase price of assets for assets purchased in the 12 months from 17 March 2020.
  • Bringing the application date of broader refundability for the R&D tax credit forward by one year, to the 2019–20 income year, to help businesses retain their R&D capability during the COVID-19 outbreak.
  • Allowing Inland Revenue to remit interest on a late tax payment if the taxpayer’s ability to make the tax payment on time was significantly adversely affected by the COVID-19 outbreak. The ability to remit interest applies only to tax payments that were due on or after 14 February 2020.
  • An amendment to the rules governing Inland Revenue’s ability to share information with other government departments. Inland Revenue is now allowed to share information with other government departments to assist those agencies in their response to the COVID-19 outbreak.
  • Removing the work hours eligibility requirement from the in-work tax credit (IWTC). This is an income-tested cash payment of $72.50 per week ($3,770 per year) to working families with children. To be eligible families must be normally working at least 20 hours a week (sole parents) or 30 hours a week (couples). Removal means that working families who have a reduction in working hours as a result of COVID-19 do not lose their eligibility for the IWTC.
  • Allowing people on a temporary visa, who would not otherwise meet the Working For Families tax credit residence criteria, to qualify for WFF if they receive an emergency benefit from the Ministry of Social Development.
  • GST will not apply to payments of the COVID-19 wage subsidy and leave payments from 17 March 2020 until the date that the Goods and Services Tax (Grants and Subsidies) Amendment Order 2020 came into force (on 24 March). This added the COVID-19 wage subsidy and the COVID-19 leave payment to the schedule of non-taxable grants and subsidies in the Goods and Services Tax (Grants and Subsidies) Order 1992.
  • Restoring the Winter Energy Payment rates from 2021 onwards to their current rates of $450 per year for single people with no dependent children and $700 per year for couples and people with dependent children. The rates for the WEP have been doubled by Order in Council to $900 per year for single people with no dependent children and $1,400 per year for couples and people with dependent children. However, this increase in the WEP rates is intended to be temporary and apply for 2020 only.

The legislation was given three readings. Most will come into force on the day after it receives the Royal assent, but a number of provisions have restrospective application or come into force on a later date.

COVID-19 Response (Urgent Management Measures) Bill

This omnibus bill was introduced by State Services Minister Chris Hipkins. It was introduced under Standing Order 263(a) as the amendments dealt with an interrelated topic that can be regarded as implementing a single broad policy. That single broad policy was to put in place the necessary arrangements in order to implement COVID-19 Alert Level 4, or where arrangements are essential to respond effectively to the outbreak of COVID-19.

The bill focused on putting in place measures to allowing for the court system to respond as necessary when issues are identified, to lessen the economic impacts for tenants from COVID-19, and to centralise the direction provided to education entities so as to provide consistency and coherence across them in the response to COVID-19.

The bill amends the the Education Act 1989, the Epidemic Preparedness Act 2006, the Local Government Act 2002, the Local Government Official Information and Meetings Act 1987, and the Residential Tenancies Act 1986. It makes the following measures in order to implement Alert Level 4, or respond effectively to COVID-19:

  • The Secretary for Education is enabled to issue directions to the governing authorities of education entities including to require them to open and close and to provide education in specified ways such as distance learning.

  • District Court Judges are added to the list of those that can alter the rules of the court.

  • Local government and Civil Defence Emergency Management Groups are enabled to attend meetings by audio or visual link, and to otherwise support the effective operation of those meeting.

  • It enacts rent freezes and restricts termination of tenancies.

The bill received three readings. It comes into force on the day after the date on which it receives the Royal assent.

Last updated on the 26th March 2020