Auckland Regional Amenities Funding Amendment Bill

This is quite an interesting little clause in the bill, and it’s something that the Governance and Administration Committee—who, obviously, did a really good job of working through this bill, hearing from submitters, and addressing a number of issues—did comment on in its report, actually. What was very, very unusual about the bill that passed its first reading and was sent to the select committee is that it didn’t actually have clarity around the commencement date.

I’ll just refer here to the select committee report. The committee here notes that “The bill as introduced does not state when the proposed changes would come into effect. We think it is important to make these transitional provisions clear. We propose that the changes would apply for a financial year that was in progress or recently completed when the legislation commenced, as well as for future reporting periods. We therefore recommend adding clause 4A”—which we’ll get to later—“which would insert new section 4A, setting out the transitional provisions in Schedule 1AA.” I think it is worthwhile, given that we’re having a good debate and really getting into the details of this bill, to hear from the member in the chair, Parmjeet Parmar, about what the rationale was in the first instance for there not being a commencement date. It is very unusual.

Generally speaking, when a piece of legislation, whether it’s a Government bill, a member’s bill, a private bill, or whatever, heads off to a select committee—when it’s drafted, in fact—it’ll have a commencement date. You want to know that your legislation’s actually going to take effect at a point. I do remember one debate in this House, going back to the last Parliament, where there was actually a piece of legislation that I don’t think had a clear commencement date, and, as a result, it never took effect and we actually had to remove it off the statute book. Obviously, no one wants their piece of legislation to fall into that trap, so it will be good to know from the member if there was a particular reason at the outset why there wasn’t a commencement date put in the legislation that was originally passed and sent off to select committee. I really would appreciate hearing from the member around that. It might be that there was a very good reason, and I think the committee of the whole House would want to satisfy itself—and this isn’t to cast aspersions on the select committee and its competence at all—that the member who proposed the legislation in the first instance is happy with what the select committee has done in terms of the change that it’s made there.

Secondly, in respect of this issue, I said before it’s unusual that there wasn’t a commencement date in the initial bill, but, actually, what the select committee itself has done is a little bit unusual as well. Here, again, I’ll just go back to the report to remind people. The select committee says this: “We propose that the changes would apply for a financial year that was in progress or recently completed”. Now, the “recently completed”—OK. But “We propose that the changes would apply for a financial year that was in progress”—that actually is quite unusual if you know a little bit about how organisations run their financial affairs and the importance of having year-to-year systems in place. So we’re actually proposing that for some of the entities that this bill covers, the rules will, effectively, be changed via legislation in the middle of a current financial year within which they’re operating. That is unusual. So, again, I’d like to hear from the member in the chair about her views on that, how she sees that operating. I would like to have some assurance that we have received some advice during the passage of this legislation, particularly at select committee—and I know the member herself sat on there, which was good—if we received advice from officials to assure us that that’s not going to create any problems in terms of the financial cycles of these organisations and that it’s not going to create confusion.

I do note here that the whole purpose of this bill is to ensure that we effectively end a situation in which there was confusion and a bit of a mismatch in terms of how organisations covered by the Auckland regional amenities funding legislation conduct their financial reporting. So let’s make sure, as we pass this legislation, that we’re not creating another set of confusion by having, as I say, just going back, changes that would apply for a financial year that was in progress coming in. That’s what this bill does—very unusual, noted in the select committee report.

So, again, I’ll just very briefly repeat those two questions. The first one is just understanding why there wasn’t a commencement date put in the original bill that was sent off to select committee; secondly—well, it’s actually three questions—the member’s comfort that there now has been a change made to that; and, thirdly, comfort and confidence from the member that that quite unusual change to allow these changes to come into effect during a financial year, not when one is completed and before the next one starts, is not going to create any additional problems for these organisations that we’re trying to assist. Thank you, Madam Chair.

Thank you, Madam Chair. I wasn’t quick enough off my feet earlier but I too had some concerns about this specific clause, which is around the commencement date, of course. Just to firstly, I guess, you know, emphasise the fact that I, too, share some of the concerns of the previous speaker, Michael Wood, in terms of why there wasn’t a commencement date at the start. I, too, find that a little bit odd, I guess, and would be keen for some clarity around that.

The second point that was made as well—and I look at this from the point of view of someone who has run a charity previously. If I had been told sort of halfway through the year that I potentially had to change the way I was doing things in terms of accounting, which, you know, is being accountable for huge sums of money that are entrusted to you, and you want to be—one wants to be; not you, Madam Chair—careful and cognisant of these matters when entrusted with such responsibility. So I, too, want a little bit of clarity around that.

But I’d go a step further, just bearing in mind the debate that we’ve had in this Chamber previously was around the change that this bill will make. That boiled down to, I guess, two different accounting standards. Not being an accountant myself or as well versed in the arts of finance as my colleague Dr Deborah Russell is, from my understanding of this, there are two separate standards. These specified amenities have actually been required, because of an anomaly in legislation and contradictions of various pieces of legislation, to adhere to both. And now that’s what this bill fixes, so that’s what we’re here for. Now, how that relates to my question around the commencement date is just going back to that point made by the Governance and Administration Committee in their report. They’ve said in their in their report, and I quote, “We propose that the changes would apply for a financial year that was in progress or recently completed when the legislation commenced, as well as for future reporting periods.” So my question there is not just the potential to confuse matters or to make things inadvertently more challenging for these amenities but also what change specifically. My understanding is that—this goes on to later clauses so I won’t go into too much detail—the retrospective validation then goes back to the fact that these amenities were actually, in fact, adhering only to one standard, and that’s what we’re also trying to fix, I understand. Correct me if I’m wrong, and this is to the member in the chair, Dr Parmjeet Parmar. But my understanding is we’re actually trying to fix things so that we, or this House, don’t inadvertently penalise registered charities who are doing some exceptionally good work across Auckland.

Then, to my understanding or my reading of both the bill and the report, that actually means that potentially there’s not a huge amount of change, because they were, in reality, adhering to only one set of financial reporting standards, which was the generally accepted accounting practice, and not—or it could have been the other way around: the International Financial Reporting Standards. I’m a little bit confused and would like a little bit of clarification around that as well. But, anyway, they were, in effect, adhering to one. We are changing things so that we’re not inadvertently penalising them for doing so because of an anomaly that was created in 2015 when specific changes that should have been made weren’t; so just a little bit of clarity.

Just to summarise, I’m looking for clarity around, firstly, the lack of commencement date at the start of the process; secondly, why these changes would apply in a slightly, I would think, convoluted manner—in the way that I’m reading this, in the middle of a year, potentially—and, thirdly, what change specifically was the select committee referring to in that particular paragraph.

The final point that I’ll make is that the last paragraph under that clarity of commencement date part of the report says, “We therefore recommend adding clause 4A, which would insert new section 4A, setting out the transitional provisions in Schedule 1AA.” When I look at Schedule 1AA, I’m actually a little bit confused about the specifics in that particular schedule. So, potentially, a little bit of clarification around what that means, because, as we know, we try and make sure in this Chamber that legislation is as clear as possible to people at the grassroots. I suspect if we struggle a little bit to decipher it, they would, potentially, too. So some clarification would be good. Thank you.

Thank you, Madam Chair. I’ll take a very quick call to just answer a couple of questions that came up. One question that came up is, through the changes that we are making through this legislation, just clarifying that we will not be penalising any charities. So this legislation actually is not changing the Charities Act itself; it is changing the Auckland Regional Amenities Funding Act 2008. So it’s not changing anything in the Charities Act.

The other question that came up about the commencement date—I see that the members have elaborated on new section 4A, inserted by clause 4A. That was to clarify the transitional provisions that were needed, because, depending on when the legislation goes through, we wanted to make sure that these regional amenities understood from when to apply the changes that will come into effect once this legislation has gone through. So that’s why it was clarified that it will apply to the year in progress, the year that would have just finished, and, obviously, to any future period. Thank you, Madam Chair.

Clause 2 agreed to.

Clause 3 Principal Act