Telecommunications (Development Levy) Amendment Bill

Clause 3, entitled “Principal Act”, amends the Telecommunications Act 2001, which is the principal Act. This amendment is an amendment to an amendment of the Telecommunications Act 2001 that was passed in 2011. The 2011 amendment was about changes to the telecommunications development levy, where the imposition of a levy was made on telecommunications provided—[Interruption] I am very happy for you to take a call, Mr Williamson. That would be quite useful. I am sure it would further the debate. The levy was imposed on telecommunications providers who received a minimum of $10 million gross revenue annually, and that levy was established to contribute to the cost.

The issues, which I think have been canvassed well tonight, were around non-urban telecommunications infrastructure—that is, infrastructure in rural New Zealand. I do not think that anyone has argued about that or has a differing view about the purpose of the telecommunications development levy—namely, that we need more infrastructure for rural broadband. We think that is a good thing, but the matter at hand is about this amendment bill tonight, which is going through all its stages under urgency. This clause, “Principal Act”, is about where it came from, what it is actually intended to do, and the way in which it is being done. That is the issue that the Labour Party has with this piece of legislation before the Committee.

I am hoping that the other parties in the Chamber tonight have had enough of the debate canvassed for them to be clear about the strength of the views that have been espoused by the Labour Party about why it is so important that when an amendment is going through that actually imposes a new levy—a tax; the departmental report has been very clear that this is a tax—that it is a significant matter that should not be allowed just to pass without due process.

There are so many other things sitting behind this, around the Rural Broadband Initiative version 1 and whether or not it has actually been successful. And here we are voting on an amendment to provide more money for version 2. There is a lack of evidence, a lack of process, and a lack of accountability from the Government, which has expended that money—that $300 million—in the past 5 years for a programme that it is now planning to re-fund.

In the meantime, there are many other ways that the lack of rural broadband is being dealt with throughout New Zealand, which, again, members have talked about tonight. Communities are actually trying to do it for themselves, and are doing it in conjunction with rural local providers, and are doing it more successfully and are bypassing the scheme that has been funded by the Government, because it is just not working. Here we are about to commit another $150 million in the same vein, with no scrutiny, no evidential base, and with even the regulatory impact statement telling us that there is no achievement of the policy directives relating to it, because they have not been evaluated. So it seems to me that it would be irresponsible, and even negligent, to actually approve this bill.

The clause that we are currently debating is clause 3, which directs the Committee to the principal Act, being the Telecommunications Act 2001. I think that it is important for the Committee to bear in mind the history of the development of that Act—in terms of the shaking of the Chairman’s head, which means that one might want to stay somewhat closer to the detail of the Act. Therefore, this is not the occasion on which to go into the Fletcher inquiry and the review that followed the legislative process, which, as I recall, was a full process that included a very wide set of consultations with the community. It led later to amendments to the Act, in around 2005-06, following a 6-month review called, if I remember rightly, the “Stocktake Review”, at which every single company was brought in and the nature of the issues confronting the industry were surfaced and a set of quite far-reaching amendments were brought into play, which broke up the incumbent telecommunications monopoly, which unbundled the local loop, which set in place, I think, a pretty proactive regulatory framework that brought completion to bear in the industry, while at the same time protecting consumer rights and property rights.

The CHAIRPERSON (Hon Trevor Mallard): I am going to interrupt the member now to remind him—[Interruption]—that the Committee has accepted the principle of the change. Who said that? The member will stand, withdraw, and apologise.

💬 Jacqui Dean: I withdraw and apologise. I raise a point of order, Mr Chairperson. I am just seeking your clarification. For what am I withdrawing and apologising?

The CHAIRPERSON (Hon Trevor Mallard): You are withdrawing and apologising for yelling out while I was on my feet. You were the member who pleaded guilty, I think, to making the noise. Is that right?

💬 Jacqui Dean: Is the Chair asking me a question?

The CHAIRPERSON (Hon Trevor Mallard): I will apologise to the member if I have got it wrong, but I thought the member was the member who yelled out and that she did indicate that she was. That is why the member withdrew and apologised.

💬 Jacqui Dean: Yes, I did. It is just that I was pointing out to the member that it is the normal procedure of this Committee that when the Chair is on his feet, members sit down, and I was merely reminding the member of that fact. I was trying to be helpful. If I am guilty of anything, I—

The CHAIRPERSON (Hon Trevor Mallard): The member will now resume her seat—[Interruption]—and I will remind her that when anyone in the Chair is on their feet, the member should sit down. It is the role of the Chair to enforce that rule, and not the role of any other member. Although I might need some coaching, the member is welcome to do that at some stage outside the Chamber.

Mr Cunliffe, going back to the point that I was making: this is a very narrow bill. It is the most substantive clause in the bill but it is a very narrow bill, and it does not go back to either the origins of the Act or the 2005 reforms. I think one might be able to go to the amount we are talking about and that shape of it.

Thank you for the clarification, Mr Chairman. I guess the point that I was trying to come to, albeit a little slowly, is that the process that this amendment here is following is so different from the process that the principal Act went through on several occasions. Here we are going through a process of urgency without the benefit of a select committee—and I know that that is something that you, Mr Chairman, will be taking into account by allowing for a full debate of these albeit quite specific clauses.

The reason that that is an issue is that a number of members have made the point that there has been no evaluation of the existing $300 million programme that is enshrined in legislation, including its sunset clause. Mr Chairman, you may not have been privy to the statement from the Telecommunications Carriers Forum that drew attention to the fact that this new tax is overriding provisions made in law for the sunsetting of the previous obligations. That is a serious matter; one which members—certainly of this party, if not this side of the Chamber—would wish to see investigated thoroughly by a select committee, which has the benefit of public submissions from the industry as well as consumer groups. I think I have made the point that I need to make.

In summary, this is amending a very substantive piece of legislation. It has fiscal consequences. I think it is now generally accepted by the House that this is a new tax—that this is a breach of an undertaking that the Government did give to the people of New Zealand that there would be no new taxes. I think that is now quite widely accepted around the House. It has certainly been stated on multiple occasions not only by individual companies but also by the industry group concerned, the Telecommunications Carriers Forum. And, as such, we are in the situation where we are amending, through urgency, a very important piece of tax law.

Earlier Mr Faafoi was going to draw the attention of the House to a matter that is close to Mr Bennett’s heart—that the generic tax policy process has been thwarted on this occasion. As members opposite well know, when a piece of legislation goes through—either by amendment to a principal Act, as in this case, or when it is a new Act that has revenue consequences—there is an established convention, during the generic tax policy process, that the accounting profession and the legal profession are consulted to ensure that there are no unintended fish-hooks in the design of the legislation, and there is a sharing process, normally over a period of about 6 to 9 months, where feedback is sought and consultation occurs. This way there are no surprises. The industry implementation issues are thrashed through. None of that—none of that—is occurring in this case. I am sure that Mr Bennett will want to rise to his feet and express his condemnation of the Minister for this outrageous breach of standard tax process; one that has kept the country safe over many years.

Recalling very briefly the impact from the previous clause around the commencement issues, there is no fixed date for commencement.

I move, That the question be now put.

No, this is the most substantive clause in this bill, and it has not been to a select committee. We are quite a long way off.

At this point I just want to speak to our Supplementary Order Papers.

We will wait until we get on to the Supplementary Order Papers. That is a separate debate, because you are proposing separate clauses.