Public Finance (Fines Collection Costs—Budget Measures) Amendment Bill

Members, we now come to clause 2. This is the debate on clause 2, “Commencement”. The question is that clause 2 stand part.

Thank you for the opportunity to talk about the commencement clause. The commencement clause says: “This Act comes into force on 1 July 2024.”; that is, the start of the next financial year. That is the reason why that is the start of this Act.

Thank you, Madam Chair. You’ll see, I’m sure, that I do have a tabled amendment here, because it does seem to be a little precipitous to rush this through. I was reading the document that the Minister in the chair, Simeon Brown, referred to, the cost recovery impact statement, and just noticing that some of the constraints—this is right on the front page; it talks about constraints. For example, it mentions about halfway down the page there that Consumers Price Index data has been used as a proxy for the limited financial information, which provides a reasonable basis for decision making. That’s the problem, limited financial information, because it’s been done in a rush—

CHAIRPERSON (Barbara Kuriger): Link this to commencement, please.

Hon Dr DUNCAN WEBB: Yeah, no, this is the point, right?

CHAIRPERSON (Barbara Kuriger): Just link it to commencement.

Hon Dr DUNCAN WEBB: Absolutely, but my point is this has been done in a rush, and we need to just take a breath. So let’s just not rush into putting this into force. Of course, the fact of the matter is that we’ve rushed from one thing; we’re rushing into the next. All of a sudden, this change is going to come into force within one month, and that’s an extremely short period of time—a short period of time for systems to change but also a short period of time for local bodies, so that local bodies can make choices.

The cost recovery impact statement itself says that, on some occasions, local bodies choose different providers, and they may well, when they look at this and they say, “Oh, our costs are going up by 4 percent.”, they may want to change providers. Now, to do that within one month simply isn’t enough, because this is a lot of admin to do. You’ve got a lot of parking fines out there, a lot of enforcement notices; you might even have court cases in train, so you’ll have issued summons to people to appear, and the price that you have to pay to the Government has gone up and you’ve got no way out.

CHAIRPERSON (Barbara Kuriger): Please use the word “council” instead of the word “you”.

Hon Dr DUNCAN WEBB: Can I apologise, Madam Chair.

CHAIRPERSON (Barbara Kuriger): Thank you, Dr Duncan Webb.

Hon Dr DUNCAN WEBB: Sometimes, I do get excited about matters of such high importance—

CHAIRPERSON (Barbara Kuriger): Like commencement.

Hon Dr DUNCAN WEBB: —and the commencement date is what we’re talking about. My point is simply that councils ought to be entitled to make their own arrangements, and that ability has, effectively, been taken away from them.

My tabled amendment is very modest, actually. It was not some silly amendment that says, “push it out to the never-never.” It simply says let’s push it down the road to 1 January 2025, because what would happen then is all of the court proceedings which are currently in the system will be cleared out—because they don’t take too long, these traffic infringements and the like, usually—and the councils can then make a choice as to whether they want to continue using this enforcement mechanism or whether they want to go down a different road which might be more effective for them.

So it’s a very simple point, but the overall global point is this is just another bit of the rushed flavour of this legislation, because the Government wants to push it through and wants this money as quickly as possible. I’m saying, well, no, let’s just have a bit of reasonableness, a bit of fairness, a bit of justice and just stretch it out by six months, and one will be able to get one’s money in due course. I honestly can’t see what the rush is.

There’s a relationship thing going on here, right? The councils are going to have this thrust upon them. They probably didn’t hear—well, we didn’t hear about it until today; they didn’t hear about it, by all reports, until today. So it only seems reasonable, decent, and fair to give them an easing-in period which is a lot more than four weeks or a month.

It’s a very reasonable suggestion, and I actually would like to hear from the Minister why he has this commencement, which, whilst it’s not tomorrow—that would probably be impossible—is so quick. Is he confident that the relevant systems can be put in place to make this system work and for councils to make the appropriate decisions as to whether they opt in or choose to opt out of this, or whether this was simply plucked out of the air—either out of his own head, or did he receive advice on this date? Thank you.

I thank the member for the question. I didn’t pluck it out of my own head, because I’m doing this on behalf of my colleague the Hon Paul Goldsmith, of course, but I would just make the point, in terms of the time frame: no, we don’t agree with the member’s amendment to delay the date for another six months.

This is a Government of action, and we’re making decisions and we’re implementing a change. Ultimately, as we’ll get to when we get to the debate on the Schedule, the member, if he hasn’t read that part of the bill yet, will realise that the percentage increase only applies to fines which are issued after 1 July, and so all of those fines that he was incredibly concerned about which may already be in the system, the percentage continues over under the current law for those ones.

The percentage of revenue, ultimately, is collected progressively over time as those fines post that date are fined and then the decisions are made. So, actually, we think there’s plenty of time for this change to be bedded in, due to the progressive way in which this legislation—in which I think the decisions made by my colleague the Hon Paul Goldsmith were very sound, very evidence-based, and very good for supporting that cost recovery model.

Before I take the next call, I’m going to say this is a very, very narrow clause, and the purpose of committee stage is questions for the Minister. We’ve just had a full one around whether things would be in place on time, and we’ve heard the answer to that, so these questions must be apart from that and very clearly crafted to the Minister, because that’s the purpose.

Thank you, Madam Chair. I would like to ask the Minister whether he considers that increasing the costs to council after they have done all the work on consultation on the long-term plans and annual plans, when they’ve been looking at their budgets, they’re trying to keep rates down, they’re working very hard in their costs, and—bingo!—on 1 July, they start having an increase—

CHAIRPERSON (Barbara Kuriger): I’m not hearing about commencement; I’m hearing about cost at the moment. Has the member got a question about the commencement date?

CELIA WADE-BROWN: Yes, the commencement date of 1 July 2024 is in the coming long-term plan or annual plan period that councils have already consulted on. And, actually, my colleague Duncan Webb’s amendment doesn’t go far enough. It’s a minor improvement but it should be from 1 July 2025, because otherwise there’s no opportunity for councils to make more precise their budget, as I think they are being asked to.

So, again, I see you embodying the spirit of Minister Goldsmith, but in your role as Minister of Local Government, I assume you can give us some answers as to why you think you can impose this when the long-term plans are all but agreed.

I want to make it very clear that the Minister is here in his role—I was going to say replacing or substituting Minister Goldsmith; so it’s not about the Minister’s other portfolios, unless he wishes to expand on that, but he doesn’t need to.

No one, Madam Chair, can replace the Hon Paul Goldsmith, but what I would say is in terms of the member’s question, in terms of 1 July 2025 versus 1 July 2024, as outlined in the cost recovery impact statement, the anticipated revenue from increasing the percentage in the next financial year is only $285,000, and, of course, that will be spread across, you know, all of the different organisations—councils, entities which are applicable for that particular percentage. So the Government considers that to be very minor.

Thank you, Madam Chair, for my first opportunity to ask a question of the Minister. I have a new line of questions for the Minister about the commencement date, which relates to some information that this Parliament has learnt today about payment providers.

Now members who have been following along closely with the post-Budget debates will know that three months is the time required for most payment providers, both on a private provider basis and when acting for the Government, to implement changes into their system. That was widely canvassed and is now on public record from the Hon Simon Watts. We also know from that Minister that he was able to consult with the payment providers for one month before today’s date—about one month—because that is the time period that he presented to the House as a three-month period which was required for consultation. But there are only two months before this legislation was introduced into this House and the date on which it would commence. So we can assume that there was a month there for the Minister to consult.

My questions to the Minister are: which payment providers are providing the parking fines for councils and which ones for the courts? Are they the same ones that deliver those services, like payments to employees, that would need to take into account changes to the income tax rates? About the providers, have those providers been consulted with for about the same period—for about one month prior to the introduction of this bill? Is that sort of the standard for this suite of bills which are about Budget measures? My last question before I move on is: do the payment providers need to take into account different measures on the fines side to those that are on the courts side, given that the courts side are regulated in a different way and are a collection of a different kind of public levy?

The fees are, and the percentage is ultimately collected by the Ministry of Justice—and they will simply adjust how much they charge and how much they retain based on what the law and the regulations allow.

Look, I’d like to start my contribution just by saying that I know this is a very short clause and it’s to do with the date, but the issues raised by the Hon Dr Duncan Webb are real issues when it comes to the timing. The question I have is—and I’ll say it now and then I’ll give some context to it—did the Minister consider last week, when it came out in the media about the situation with parking fines in Invercargill, moving the date to ensure that there was enough risk and liability consideration to what would happen if the Invercargill situation happened?

Now, what happened in Invercargill—and the reason I’m interested in this is because I am the Labour buddy MP—is that that council is in the position of having to refund $500,000 worth of parking fines. It is something that the council can’t really afford to do. It’s got a small ratepayer base. It’s got a population of around 60,000 people.

CHAIRPERSON (Barbara Kuriger): Does this have something to do with commencement of the bill?

INGRID LEARY: Yes, it certainly does. It certainly does, Madam Chair, because—

CHAIRPERSON (Barbara Kuriger): Can you explain to us quickly how it relates to commencement?

INGRID LEARY: Absolutely. Thank you for indulging me, Madam Chair. So my question is: given what happened in Invercargill and given the very, very short commencement date, and given the questions that come up from the Invercargill situation about who bears the liability of the lost revenue from those fines, did the Minister consider moving the date to seek further advice about what would happen in a situation like this?

Now, this is not hypothetical; this happened. The situation was that parking fines between 1 July 2022 and 29 February 2022—it’s been revealed that they were incorrectly issued under a council by-law. The fines were for $40, and then $490,880 and 12,272 parking fines were issued. This is what I believe, if the Minister was prudent, and this came up in the media, which it did last week—did he say, “OK, have we given enough time to consider what would happen in that situation?” Because the council has decided to return that money to people who got those parking fines.

Now, the council may, in turn, I guess, try to seek recovery of those fines from the Crown. I don’t know if it’s going to do that, but if I was a Crown Minister, I would be asking myself: what risk management strategy do we need in place to make sure we’re protected from that? I don’t see anything in the commencement date or in the regulatory impact statement or in any of the other documentation that would suggest that there has been some attention brought to the question about liability.

I raise this in the context that $500,000 is a lot of money for a small council, and so they may seek just—I don’t know how they would do it, whether they would just ask the Minister, in the spirit of cooperation. Given that the Crown has recovered a certain amount of that money through this type of legislation, through the Public Finance Act, they may say, “Can you please give us back the amount that we have paid to you?”, or they might try and wear it.

So the question is very much about commencement, because everything might have looked in order, although I doubt it with the speed at which we’re going through this—but when something like that comes up and it exposes the Crown, through the exposure of the local council, I do think it’s prudent for the Minister to turn his attention to whether the date is simply too quick. And maybe, like Dr Duncan Webb saying to leave it for—I’m not sure how long he said; I won’t ask him, but perhaps a month, to seek some further advice and say, “What would happen in the case of an Invercargill-type situation?”

My final comments are that it’s really unfortunate because with the end of free public transport in Invercargill, the young people from the south cannot catch buses to the north to get to their sports games—

CHAIRPERSON (Barbara Kuriger): Now we’re a long way away from the commencement.

INGRID LEARY: Yes. I just wanted to make that point because $500,000 is a lot of money and a lot of exposure, and so I’d love the Minister to answer my question, please.

I move, That debate on this question now close.

The question is that the Hon Dr Duncan Webb’s tabled amendment to clause 2 to replace “1 July 2024” with “1 July 2025” be agreed to.

Members, the vote on the closure to clause 1 was incorrectly recorded as Ayes 68, Noes 47. The result of the vote was actually Ayes 68, Noes 49. The record will be corrected accordingly.

Clause 3 Principal Act