COVID-19 Response (Further Management Measures) Legislation Bill (No 2)

I move, That the COVID-19 Response (Further Management Measures) Legislation Bill (No 2) be now read a first time.

Back in May—if we can remember back in May—the House passed the first COVID-19 Response (Further Management Measures) Legislation Bill. It was an omnibus bill that contained a very wide range of measures designed to enable businesses, local government, and others to more effectively manage the immediate impacts of the response to COVID-19 and to mitigate unnecessary and potentially longer-term impacts on society. It was a bill that largely dealt with administrative matters, as does this bill.

This is the second COVID-19 Response (Further Management Measures) Legislation Bill that I’ve been bringing to the House. It is a smaller bill, mainly administrative in focus, and it amends eight existing Acts of Parliament. The amendments are grouped into four schedules. The first amends the Local Government Act 2002 by extending deadlines relating to the financial reporting that the COVID-19 lockdown has made it difficult—if not, in some cases, impossible—to meet.

Schedule 2 concerns tax legislation. It addresses a number of issues that have arisen related to tax matters in areas including research and development and in-work tax credits. It extends the Inland Revenue commissioner’s powers to vary the time scales by which certain actions have to happen. It also allows remissions of interest on terminal tax for the 2020-21 tax year for provisional taxpayers that have been affected by COVID-19.

Schedule 3 addresses issues that fall within the domain of the Ministry of Business, Innovation and Employment. It offers continuity and certainty regarding the levy rates and groups determined by Accident Compensation (Experience Rating) Regulations, and extends reporting time frames for Crown research institutes.

The amendments to the Crown Entities Act, the Public Finance Act, and the State-Owned Enterprises Act are grouped together under Schedule 4. These amendments extend reporting time frames for a wide range of public organisations. It’s become clear that the disruption caused by COVID-19 means that it would be impossible for the usual quality of these reports to be consistently sustained across the public sector, so for this year only, the deadlines have been extended.

None of these provisions are going to grab any headlines. They’re common-sense solutions to the administrative issues that COVID-19 has brought about. But they do need to be in place before we all go our separate ways for the election, as many of the deadlines that are being moved fall before the House next sits. I don’t think these will be particularly controversial. During the committee of the whole House stage, of course, I’ll be happy to answer any questions that may arise. I commend the bill to the House.

It’s a pleasure to kick off this debate from this side of the House, and I want to thank the Minister the Hon Chris Hipkins for bringing this bill before us today. As we have heard from the Minister, this bill is an omnibus bill seeking to change eight Acts of Parliament to help make life a little easier for businesses and Government agencies that have struggled through COVID-19. I want to signal to the House today that National will be supporting this bill, and we want to explain exactly why we’re supporting it. Certainly, the purpose of the bill was to support businesses as they struggle through COVID-19, and we want to acknowledge the scale of what has been felt right across New Zealand from businesses large and small, and also Government agencies, after having to deal with lockdown and then the various levels of the alert system, and then now also faced with the challenges where, you know, we don’t have tourism back in New Zealand—and we’ve got deep challenges that we’re facing there.

Some of these changes—in fact, a lot of these changes—are reasonably uncontroversial and will help the businesses that are struggling, and the Minister outlined a number of those changes related to Schedule 1, that deals with the extension of reporting time lines, mainly for Government agencies, but those will be no doubt welcomed. Also in Schedule 2 the changes to enable R & D to be possibly treated as a tax credit and to now allow those tax credits to be applied, and also allowing IRD—I think this will be a really good change, actually—to have the discretion to change the due dates and deadlines to help supporting businesses through that. So this is a reasonably uncontroversial bill.

I do want to raise the issue that I don’t think that this is enough support for the business community. The challenge, just going back to some of the challenges that we face in the next 12 to 18 to 24 months, is extremely large, and Treasury predictions—and no doubt those will be updated as time goes on—indicate that there’ll be deep employment cuts that will be coming, particularly after the wage subsidy comes off later on next month. I like to say that we are in the eye of the storm. We had the first round of challenges and redundancies and business closures immediately post-lockdown and after the alert system went from level 3 to level 2, and now, actually, if you asked a lot of businesses throughout New Zealand, a lot of them are busy. Restaurants, cafes, real estate agents, DIY businesses, wholesale retail operations—they’re actually quite busy. I think it masks the challenges that we’re going to face in the next few years, because once that wage subsidy comes off, we’re going to have about 470,000-odd employees that are affected by that. Businesses will have to make those hard decisions and to lay off staff right across New Zealand. So whilst this bill addresses some of the, kind of, administrative burdens, I would say, that businesses will be facing as a result of COVID-19, this is by far not sufficient to address some of the challenges that these businesses will face in the next few years.

I do want to outline National’s position on what should be done to help address those challenges. One of the things that we’ve got to think about is anything we can do to make it as easy as possible to bring back those unemployed into the workplace, and that’s why we’ve got things that we’ve talked about, which is JobStart, which essentially gives employers the chance to get 10 grand, or $10,000, for hiring an additional staff member. Beyond all the tax and administrative burden, ideas like that, ideas like JobStart, will have a meaningful difference to the lives of small businesses and those that will be directly impacted by COVID-19.

Other things we can look at are around starting a business. There’s going to be a lot—tens and tens of thousands—that will be unemployed: white collar, blue collar, you name it. Now, what can we do to actually give those people an incentive to go out and start businesses and hire people?

💬 DEPUTY SPEAKER: I just want to caution the member that you need to relate all that to the bill that’s in front of the House.

Thank you, Madam Speaker. I’ll definitely do that right away. So, look, why I raise this is because the changes we’re dealing with in this bill seek to help ease the challenges facing small business and businesses right across New Zealand. I raise this in the context that that is part of the challenge that small businesses face, but it is not in any way going to make a substantial difference. So I raise that in context because, yes, we’re supportive of these administrative changes, yes, these changes will help ease some of the burden that these businesses will face post COVID-19, but we need to be realistic that in the next couple of months, in the next six to 12 months, these businesses will face even greater challenges, and that’s why we need bigger policy ideas and legislation that is going to help those changes.

So we’ll be talking more about those changes throughout this process, but I do want to signal that National is supportive of these changes. We want to help businesses out in any way we can, and I commend this bill to the House.

That was a very long speech by Mr Bidois, that didn’t really touch on the bill—a nice list of “if I was on the other side of the House”. But the fact of the matter is that what this bill does is really important, and it shows how—what appear to be minor rules throughout the administrative system, in relation to deadlines, tax, and the tasks that our bureaucracy must undertake, in a timely and effective way—important in fact they are. Of course they’ve all been disrupted. Of course we need to make sure that the important functions of reporting are still discharged in a timely way, but one which takes into account all of the disruption that has been caused. That’s simply what this bill does. It’s an administrative response to the disruption that’s been caused. It’s highly effective. Of course it’s going to be supported. I commend this bill to the House.

Thank you, Madam Speaker. It’s a pleasure to stand and make a contribution to the COVID-19 Response (Further Management Measures) Bill (No 2). National are happy to support this bill because, ultimately, we want to do all we can to support businesses who have faced severe hardship due to the impacts of COVID-19. There was no way that businesses could have prepared themselves better for the impacts and the aftermath of what’s happened. Many businesses were scrambling, and I know that many members in this House were dealing with a number of queries and supporting not only workers but business people who were just trying to understand what kind of support they got. And, of course, businesses, business owners, were very grateful also that they had access to the wage subsidy, but at the end of the day the wage subsidy wasn’t going to be able to support them in terms of some of the operational and fixed costs that they had that were still coming in even under lockdown, a time when they were having zero sales and zero revenue. I can speak personally on that. I have a small business, and it is a tough time, but I definitely appreciate that there was a wage subsidy to help mitigate that.

It is unfortunate that it’s taken so long, because, of course, businesses were calling out for help a lot earlier, and, actually, what would have been very, very handy was for many of our small businesses to get that cash injection in, and it’s unfortunate that the Government didn’t take on a scheme that we suggested, which is the GST refund scheme, which would have been based on the GST for the previous six months, up to 1 January. That would have been a fantastic way to support businesses—it was tied to the size of the business—to get some cash into their hands and help them through this time. But, ultimately, we do support the changes that will come under this omnibus bill, and we do welcome the extension of these statutory deadlines for the financial and auditing reporting by the Government agencies. It will relieve some pressure. It’s not, you know, support in terms of cash, but it relieves some of the pressure on businesses at this time.

We also welcome the amendments to the ACC regulations so that existing base levy rates will continue to apply next year and provide a bit more certainty to users. Businesses do want as much certainty as possible as they navigate in the coming weeks and months. Also, particularly, they want some certainty because they also understand that they will have to navigate the state of their businesses once the wage subsidy ends on 1 September. And I know that many businesses are mindful of what will happen and whether they can sustain their businesses through that period.

In terms of some of the changes, the National Party did suggest that the minimum wage increase be delayed for some period just to help relieve some of the pressure on small businesses, but, unfortunately, that did not happen. But we do welcome the amendments to the tax legislation which supports the R & D loan scheme and some changes around Inland Revenue, around dates and deadlines, to support businesses. And I do know that some business people I have met in recent times—actually, just in the last couple of weeks—have commented very positively on the Inland Revenue Department and how they have been very open and receptive and supporting of small businesses through this period. I support this bill to the House.

Thank you, Madam Speaker. I too rise on behalf of New Zealand First to support this COVID Response (Further Management Measures) Legislation Bill (No 2). Of course—this has been noticed—it’s an omnibus bill with a series of technical amendments, but they are actually really important amendments and there is some urgency in bringing them forward, particularly at this stage of the parliamentary cycle. So whilst this is not some of the big announcements around infrastructure and the like, in terms of the Government’s overall COVID response, it is a tidy up to the primary part of this legislation. It has been such a massive and complex response on such an unprecedented level both within the business community but also within the machinery of Government, and there are several Acts that we just need to provide some clarification on, particularly around the reporting deadlines and audits for the likes of our State-owned enterprises and local authorities. It gives the Auditor-General some ability to have some flexibility or extension of time lines, which is absolutely pivotal. They don’t have the option of just ignoring the law; they’ve got to keep within deadlines to make them more user-friendly and workable and appropriate, given the circumstances. It is a very important function that this bill provides.

I also note, as the previous speaker, Agnes Loheni, said, the R & D tax clarification is there. IRD is able to share information with Callaghan Innovation to ensure that loans aren’t treated as a Government grant for tax purposes and to ensure that the loan doesn’t prevent that businessperson claiming the R & D tax credits that this Government brought in, which is a very important part of driving innovation in research and development, which we know is such a critical part to raising the productivity of this country’s economy, which, of course, has lagged many of our OECD peers. One of the more important things I think we’ve done economically is to give those tax incentives to lift R & D up towards 2 percent of GDP. So that is important within this bill.

But most of these measures are pretty uncontroversial. They’re sensible, they’re necessary, and they’re common sense. So New Zealand First will support this bill. Thank you.

National is supporting these changes, albeit they are so very, very modest. I wonder whether there’s any business person in New Zealand today who has read that the Government is doing this and put it on the Order Paper, or who is listening to this debate, who is saying “Hallelujah! They’ve saved my business.” I really don’t think that’s that case. Whilst there is some assistance here, it’s actually just extensions and a bit of tinkering.

What would have been much more worthwhile is a bill before the House that actually addressed the significant harm that’s been done to so many businesses in New Zealand as a result of the lockdown and the Government having closed the economy down. The reason we should be looking at that and doing that for these businesses—it’s about the people that work for them. We know that so many of them are only there because the wage subsidy has a few more weeks to run, and there are businesses up and down New Zealand today who are not sure how they will keep their employees on. They’re having to talk to them about redundancy, and tens of thousands—in fact, Treasury says hundreds of thousands—of them are about to lose their jobs, and nothing in this—nothing in this—actually helps one of those businesses keep a single employee on.

We are supporting it because, actually, it does relieve some of the burden and give a touch more certainty to companies, but, ultimately, what really is necessary is some real action—not policies to keep pushing the problem further down until after the election, when the roosters will really come home to roost, but something that will deal with these challenges right now.

I tell you what I really would have liked to have seen in this bill is something, actually, for the tourism industry and all parts of the tourism industry, at least to give them some hope, if nothing more. We heard in the House yesterday the tourism Minister blaming travel agents—blaming travel agents—for the plight they find themselves in and accusing them of not being good New Zealanders because their job is to help New Zealanders go overseas and take money away. How naive that is—how short-sighted. I guarantee that the emails I’m getting thanking the National Party for raising the case and the challenges of travel agents are very different from the ones he’s getting in his inbox—I’m quite, quite sure of that. He has a chance to come back to the House and fix this, because I know we’re going through very quickly. What about a Supplementary Order Paper in later stages that fixes this bill that we see in first reading that actually does something for these businesses to give them hope?

So we’re supporting it because, actually, at the moment, any hope at all, any help at all, for businesses to keep going so they can keep people employed is worth considering, but, actually, it falls woefully short of doing anything that’s going to make any material difference for our businesses in New Zealand who continue to struggle and are facing redundancies and unemployment for their workers, and, in many cases, mounting debt, and, finally, businesses that will close.

E Te Māngai, tēnā koe. Tēnā koe e Te Whare. As I think has been well elucidated by speakers on both sides of this Chamber, this is a relatively non-controversial bill, and it appears as though we will have unanimous support for it at this first reading. I do, however, just feel as though, in rising to speak on behalf of the Green Party, it’s important to respond to some of the allegations or points of debate that were put forward by the Hon Todd McClay, who’s just finished speaking now.

💬 DEPUTY SPEAKER: As long as it relates to the bill.

CHLÖE SWARBRICK: Absolutely, Madam Speaker. That is with regard to the harm that the Hon Todd McClay was stating this Government did to businesses during the lockdown. This is, obviously, a bill pertaining to the COVID-19 response, so therefore falls broadly within that ambit. We are here talking about jobs. We are here talking about the ability for businesses to continue on and to employ people, provide that opportunity. So I really put it to other members of the National Party who will get to their feet and probably allege similar things to the Hon Todd McClay to offer some alternative—what they think could or should have been done differently. Because they frequently in the weeks prior to, and actually during, lockdown sought to reference the Australian approach. I really wonder, looking at the results of the Australian approach, whether they continue to advocate for it or, with the value of hindsight, are coming to reflect on that advocacy and the importance of the public health approach that we did take.

The Greens are obviously joining with the Government in support of this bill. We’ve been involved in the negotiation around changes to, for example, tax legislation, the Income Tax Act 2007, the Tax Administration Act 1994, the Public Finance Act 1989, the Crown Entities Act 2004, the Public Finance Act, the State-Owned Enterprises Act 2004, the Local Government Act 2002, the Crown Research Institutes Act 1992, the Accident Compensation Act 2001, and the Accident Compensation (Experience Rating) Regulations 2019. This is why this form of legislation is called an “omnibus” bill, because it does affect all of those different laws. That is the substance of what we’re debating today and, in the words of that member of the Opposition who just resumed his seat, it is relatively modest but none the less important to provide that sense of security and certainty for folks as the House seeks to finish its business this week, as we head into the election season.

Madam Speaker, just finally, this is probably the last time that I’ll be speaking prior to this House adjourning, and I just want to acknowledge the mahi that you have brought to your role as Deputy Speaker and to say thank you for that. I want to say thank you to all of my colleagues as well for what has been a very robust first term in Parliament, and I do appreciate the work that the Opposition has done in holding this Government to account. So I look forward to another term in Government, I hope, as we move towards this election season and put it to the general public, to New Zealanders, to reflect on this COVID-19 response. Kia ora, Madam Speaker. I commend this bill to the House.

Thank you, Madam Speaker. I think this will be the last time I speak in this House. Like Chlöe Swarbrick—she’s pretty sure that this will be her last time. I thought I had my last time earlier in the week, but you can see me standing here being whipped to speak for a few minutes on this bill. But I’m very pleased to have this opportunity to have another crack at the Government—any chance I get, it’s very welcome and I’m very happy to take that opportunity. I also wish you well, Madam Speaker, in the time ahead of you outside of this House, and I look forward to seeing you out there in the real world.

This bill, as has been mentioned, is a bit of a lost opportunity. It does some certain things, it extends some time limits, and it tinkers around the edges, really. There was an opportunity here to, for example, do something about the minimum wage—postpone that or extend that rather than increase it. We could have introduced some tax breaks to support those earners, those taxpayers, and, of course, we could have increased and changed some stuff in the Income Tax Act relating to depreciation rates, because depreciation rates are very important when it comes to people’s decisions around what they might or might not invest in, and investing is what needs to happen. Confidence of the investor is so important in this time when interest rates are so low, people continue to save money. In an economic crisis, we need people to reach into their pockets, feel confident about themselves, and invest, which will eventually create more jobs and have this country on a road that we will be very proud to walk on.

So, Madam Speaker, thank you for the opportunity. Tim van de Molen, I do expect this to be the last time I get up to stand in the House. I wish all members well in the future. Thank you.

This is a split call.

The Opposition might have a point if this bill was the Government’s only response to business, but in order to make their argument go through, they simply have to ignore the wage subsidy, the wage subsidy extension, the small-business loan scheme, the extra depreciation write-off, the tax carry-back scheme, the support for New Zealand exporters, and the extensive tourism relief package. This Government has put a great deal of effort into supporting business, and it will continue to do so. We cannot save every business but, by golly, we can make a jolly good effort at doing the best we can to help as many businesses as possible to get through.

So in the light of that—all the work that this Government is doing to support business—this bill contains a suite of tidying-up measures, measures to enable the business of Government to continue given the slowdown posed by COVID-19, and some important legislative requirements on various Government entities, which they simply could not meet because of the COVID shutdown. This bill enables them to meet that as a one-off with a special extended deadline. But it’s also got some measures that do help businesses very directly.

An amendment to the Tax Administration Act enables Inland Revenue to have a lot more discretion with respect to deadlines for filing, for paying taxes, and so on—a measure that takes the worry and stress off business, alongside all the other excellent measures we have in place for business. It also has, in this bill, a change to the ACC rules, so enabling the ACC levy for the next year to be held at the same rate as the current year. That’s an important measure as well, giving business certainty in uncertain times, and we anticipate keeping their costs at a reasonable level.

So this bill, along with the many, many, many other measures that Government has put in place to support business, works to ensure that everything keeps ticking over. It’s an excellent bill, and I commend it to the House.

In contrast to my parliamentary colleague Chlöe Swarbrick and my National Party colleague Alastair Scott, this isn’t my last contribution in urgency. I will be delivering some potboilers between now and midnight, I have no doubt, and then into the morning, and we will be debating right the way through to the end of the session. So I’m going to save the tearful farewells till later on for you, Madam Speaker.

I’ve got to say, in respect of this bill, a bill we support and particularly in respect of the elements that support businesses to sustain themselves through a difficult period—there is a theme emerging from this Government, and it’s all about COVID. It’s everything to do with COVID. I haven’t yet heard a satisfactory explanation as to why, because of a five-week lockdown, the massive machinery of State-owned enterprises cannot deliver their annual reports within the statutory deadlines already prescribed in law. Because, on the face of it, it looks like this is an important thing to be doing, but nobody’s actually explained why it is that these multi-hundred-million-dollar companies don’t have the wherewithal or the machinery to actually meet their statutory obligations. They kept going through the lockdown and we have been out of lockdown now for months. And so we’re now saying that a financial year end of 30 of June for our council-controlled organisations, for our councils, for our State-owned enterprises—they are in such parlous shape from a financial reporting perspective that they can’t meet their statutory deadlines.

I would be very interested to hear from the Minister in his second reading speech actually why this is, because we’ve heard an awful lot of the “because of COVID” excuse from the Government for delay. I note that the Auditor-General in his report on the management of the Provincial Growth Fund (PGF) said that because of, effectively, a five-week lockdown, a plan to analyse the benefits of PGF projects is going to be delayed by 15 months. Well, I mean, nobody’s actually got under the bonnet of this and said “Why?” Why is it “because of COVID”, when we’re now free and clear and we’re back into the rugby stadiums and we’re back into our workplaces, we’re back into our bars and restaurants, and it is, effectively, on a day-to-day basis, business as usual? Do we actually need all of the technical amendments that we are providing? We’re doing it under agency, so we’re not going to get the answers from officials, necessarily, but I do think it behoves us to not just say “because of COVID”, which becomes an excuse for every single delay the Government wants to put in place.

It may be appropriate. As an accountant, I can’t think of a reason why these very large organisations—with machinery that went through the financial reporting process and all of the other statutory obligations that they have in companies law and in the Public Finance Act—actually need the sorts of extensions that we’re granting them. So my support for this, and my party support for this, has to be caveated with an approach that says: when we do this stuff, we have to do it for a reason, and haven’t seen a good reason yet.

I call the Hon—oh, I call Greg O’Connor.

Oh, Madam Speaker—the same anticipation we have of Mr Woodhouse coming back into the House—very little. I just rise to take a brief call. I’m just reading some comments by an ex - Prime Minister of New Zealand, who was just saying that one of the first rules in a situation like this is that you throw out the rule book. What we are determined to do is to ensure that business, along with the rest of New Zealand, recovers and thrives in lieu of this COVID crisis. It’s legislation like this which is an enabler to do just that. To ignore what this once-in-100-year event is would be folly and foolish. So I have no hesitation in recommending this to the House.

Bill read a first time.

Second Reading