A snapshot of government policy

As the dust settles on September's general election, you might be contemplating what the new Government's policies will be and what this will mean for your businesses and private interests.

Below we provide a snapshot of our analysis on policy issues that you should consider factoring into your business and personal plans for the next three years.

We’re here to help – please contact us if you have any specific queries about how the Government’s policy might impact your business or person interests.

Climate change

Policy snapshotImplications for business or private interestsTimeframes for change
  • Adopt and make progress towards the goal of a Net Zero Emissions Economy by 2050 by introducing a Zero Carbon Act.
  • Restore the Emissions Trading Scheme (ETS) to put an effective price on carbon.
  • Ensure that the 2015 Paris Agreement is fully implemented.
  • Introduce an Independent Climate Commission.
  • Agriculture may be included in the ETS if the Climate Commission recommends that action is taken.
  • All new legislation to have a climate impact assessment analysis.
  • Establish a new cross-agency climate change board of public sector CEOs.
  • Plan the transition to 100% renewable electricity by 2035 (which includes geothermal) in a normal hydrological year.
  • Stimulate up to $1billion of new investment in low carbon industries by 2020, kick-started by a Government-backed Green Investment Fund of $100 million.
  • The agriculture sector being included in the ETS – whatever form that takes – would have significant cost implications for the sector.
  • There will be greater emphasis on the effects of climate change across all facets of business, not just those with an apparent environmental focus.
  • Greater investment in low carbon industries.
  • Depending on the recommendations of the PCE, we may see MfE, MPI and the EPA stripped of their climate change and ETS functions, with those functions moved to the new Climate Commission.
  • It is likely that MFAT will still retain direct control over negotiating climate change policies at an international level.
  • First 100 days: Set the zero carbon emissions goal and begin setting up the independent Climate Commission.

Conservation

Policy snapshotImplications for business or private interestsTimeframes for change
  • Stabilise and increase New Zealand’s indigenous wildlife population.
  • Increase use of 1080, while encouraging the development of more effective alternatives.
  • Significantly increase DOC funding.
  • Introduce a Tourism and Conservation Infrastructure Fund to improve DOC biodiversity funding and tourism infrastructure.
  • Protect the Maui’s dolphin from fishing or petroleum exploration.
  • Look to establish a Taranaki blue whale sanctuary.
  • Owners of rural forest land may see an increase in 1080 drops.
  • DOC may have a greater presence in local conservation areas.
  • Fishing and petroleum industries may see greater restrictions on the use of marine areas.  In particular, there may be reduced opportunity for fishing and petroleum exploration in the Taranaki region.
  • No immediate timeframes for change.
  • Aim is that New Zealand’s indigenous wildlife population be stabilised and increasing in 10 years, with species coming off the threatened list regularly.
  • Aim to be predator free by 2050.
  • Aim to achieve mainland predator eradication in areas of at least 20,000 ha and total eradication of mammalian predators from offshore island reserves by 2025.
  • Legislative amendments will take time to work their way through the regulatory channels.  So most of the “core” changes will not come into effect for over a year.

Energy

Policy snapshotImplications for business or private interestsTimeframes for change
  • Plan for a transition to a sustainable low-carbon economy.
  • Promote energy efficiency and ensure that at least 90% of New Zealand’s electricity is generated from renewable sources by 2025, with close to 100% by 2035 (as outlined in the Green’s confidence and supply agreement).
  • Encourage a secure electricity supply for New Zealand through increased diversity of supply from renewable sources.
  • Explore options for marine power generation.
  • Establish a moratorium until 2028 on any new fossil-fuelled baseload electricity generation.
  • Convene a cross-agency and cross-interest working group to undertake a wide-ranging review of the electricity sector.
  • Hold a full-scale review into retail power pricing.
  • Ensure all future purchases of Government vehicles are electric where possible.
  • Prepare an NPS on onshore oil and gas exploration to provide direction to councils.
  • More stringent environmental standards and safeguards around offshore oil and gas and minerals activities, as well as increasing penalties under the EEZ Act.
  • Oppose mining of coal lignite.

Electricity sector:
  • More regulation of the electricity sector, including changing how the generation, transmission and distribution sectors work together.
  • While government has set a goal of 90% renewable electricity generation by 2025, this is still heavily dependent on demand as no government subsidies have been announced. It is unlikely that there will be an increase in construction of consented but not yet built renewable electricity projects unless demand increases.
  • Government is pushing for diversity of supply, especially in regional areas.
  • Policies are likely to be introduced requiring that any surplus household electricity sold back to the grid (i.e. from solar power) is purchased at a fair price, linked to the wholesale price.Businesses will be unable to establish any new fossil-fuelled baseload electricity generation until at least 2028.

Oil, gas and minerals sector:

  • Businesses involved in offshore oil and gas and other minerals activities may find that more stringent environmental standards and safeguards apply, especially in the EEZ.
  • For offshore petroleum activities, physical rather than paper audits may become commonplace.
  • Parent oil companies may be made fully liable for any mistakes, spill clean-ups and financial losses in the EEZ by way of a bond or liability insurance or both.
  • Penalties for breaching marine consent conditions may increase.
  • Increased public participation in NZPAM’s block offer process, as well as closer scrutiny of the environmental effects of activities under this process.
  • Businesses involved in lignite development may have greater emissions costs under the ETS.
  • Review of retail power pricing is expected to start as soon as possible, and indications are it will be completed within 100 days of being put in front of Cabinet.
  • More electricity generated from renewable sources by 2025.
  • The majority of the central government vehicle fleet to be electric by 2025/2026.
  • No set timeframes for the majority of these energy policies, but regulatory reform (including the creation of new NPS) will take some time.

Environment (general)

Policy snapshotImplications for business or private interestsTimeframes for change
  • Retain the Resource Management Act 1991.
  • Consider reversing some changes made by National to the RMA.
  • Convene a panel of experts to determine whether the RMA remains fit for purpose.
  • Promote meaningful community participation in resource management.
  • Use National Policy Statements (NPS) and National Environment Standards (NES) to provide clear national direction.
  • Complete the NPS on indigenous biodiversity (on private land) and bring into effect.
  • Strengthen the EPA and give it a clear purpose to protect the environment.
  • Give the EPA a greater role over call-in and Board of Inquiry processes.
  • More monitoring of resource consent compliance.
  • Introduce a product stewardship scheme for tyres.
  • Better management of waste and hazardous substances.
  • Adequate regulation of genetic modification.
  • No immediate changes to RMA processes, although these may eventuate following a review.
  • The promotion of meaningful community participation in resource management processes may involve changes to Environment Court processes to encourage shorter hearings and limit expert evidence.
  • Changes to planning rules and regulations through an increased use, and strengthening of NESs and NPSs.
  • Increased frequency of resource consent compliance visits and tougher enforcement of conditions.
  • Increased monitoring of hazardous substance management and disposal.
  • Stricter regulation of GMO approval, use, labelling etc.
  • No immediate timeframes for change.
  • The majority of these policies, amendments will take time to work their way through the regulatory channels.  So most of the “core” changes, if pursued, would not come into effect for over a year.

Fisheries

Policy snapshotImplications for business or private interestsTimeframes for change
  • Ensure New Zealand’s fisheries are sustainable and that ocean habitats are protected.
  • An independent review of the fisheries management capability of the Ministry for Primary Industries.
  • Reviewing the performance of the Quota Management System (but not repealing it).
  • Obtaining accurate information on commercial fishing and working with the recreational fishing sector on improved representation of their concerns.
  • There may be targeted legislative reform to improve the management of New Zealand’s fisheries.  This could impact on resources currently allocated under the QMS.
  • No immediate timeframes for change. Legislative amendments will take time to work their way through the regulatory channels.

Forestry

Policy snapshotImplications for business or private interestsTimeframes for change
  • Establish a New Zealand Forest Service to be based in Rotorua.
  • Some of central government’s responsibility for forestry likely to be moved from MPI into the new NZ Forest Service following a review process.
  • Create a National Forest Strategy to develop a stronger domestic market for wood products.
  • Work with territorial authorities to complete forestry roading projects to ease transportation problems.
  • Develop an accelerated depreciation regime.
  • Purchases of interests in cutting rights to forests of more than 50 ha will be subject to the Overseas Investment Act process and must meet a national-interest test. (The definition of “overseas investor” will be modified to include a New Zealand-based contractor who has contracted 25% or more to one overseas customer.)
  • Marginal agricultural or unused land to be planted in forestry to help meet NZ’s 2050 climate change obligations.
  • Businesses will have to navigate new regulatory processes associated with the NZ Forest Service, and potentially new legislation to support forestry strategies Businesses involved in forestry operations will be given more support.
  • Accelerated depreciation rates may lower the cost of investment in the wood processing sector.
  • There will be more emphasis on training and employment in forestry related areas, potentially creating a more skilled workforce.
  • Purchases of forest cutting rights exceeding 50ha will become more difficult and expensive for foreign buyers as approval applications would need to be processed by the OIO.
  • No immediate timeframes for change.
  • Given the support for the New Zealand Forest Service, legislation to provide for the Service likely be fast-tracked.  However, splitting forestry functions off from MPI will take substantive legislative reform and may take some time to progress.

Housing

Policy snapshotImplications for business or private interestsTimeframes for change
  • Make existing homes sensitive land under the Overseas Investment Act.
  • Tax speculators by extending the bright line test to five years.
  • Build 100,000 affordable homes across NZ.
  • Establish a Housing Commission and an Affordable Housing Authority.
  • Initiate a rent-to-own scheme or similar progressive ownership model.
  • Undertake a comprehensive register of foreign-owned land and housing.
  • Greater regulation of landlords.
  • To meet the proposed building schedule, a significant amount of land will need to be developed across the country, especially in Auckland.
  • More regulatory powers to require that new houses are affordable.
  • First 100 days: making existing houses sensitive land.
  • First 100 days: Issue an instruction to Housing New Zealand to stop the state house sell-off.
  • First 100 days: Begin work to establish the Affordable Housing Authority and begin the KiwiBuild programme.
  • Build 100,000 high quality, affordable homes over 10 years, with 50% of them in Auckland.

Primary industries

Policy snapshotImplications for business or private interestsTimeframes for change
  • Progress the development of a Primary Industry Council and pan-sector strategy to fuel value-added growth for the sector and economy.
  • Re-establish an independent authority for food safety and biosecurity.
  • Invest in the capability development, attraction and retention of talent for primary industries.
  • Set baseline environmental standards that achieve social, environmental and economic outcomes.
  • Recognise the potential for aquaculture in promoting regional economic growth.
  • May provide greater access to a skilled workforce.
  • Primary industries may be subject to greater scrutiny in complying with environmental standards.
  • No immediate timeframes for change.  Legislative amendments will take time to work their way through the regulatory channels.

Tourism

Policy snapshotImplications for business or private interestsTimeframes for change
  • Establish a $75m a year Tourism and Conservation Infrastructure Fund to pay for projects that will improve the experience of visitors to New Zealand and enhance our natural environment.
  • Introduce a $25 per visit levy on international visitors (people not citizens or residents of New Zealand).
  • Make tourism a carbon neutral sector.
  • The tourism industry may experience an increase in government funded projects.
  • Government investment may be aligned with incentives to shift to increase carbon neutral options, such as use of solar, wind and/or hydro-power, and electric vehicles.
  • No immediate timeframes for change. Legislative amendments will take time to work their way through the regulatory channels.

Transport

Policy snapshotImplications for business or private interestsTimeframes for change
  • Require the Government’s vehicle fleet, where practicable, to become emissions-free by 2025/2026.
  • Significant investment in regional rail.
  • Investment in safe walking and cycling, frequent and affordable passenger transport, rail and sea freight.
  • Investigate a Green Transport Card to reduce the cost of public transport.
  • Reprioritise National Land Transport Fund spending to increase the investment in rail, cycling and walking infrastructure in cities and regions.
  • The East West Link will not proceed as currently proposed.
  • Make more funding available for transport projects of regional importance by doubling the funding range of $70-$140m to $140-$280m.
  • Begin work on light rail from the city to the airport in Auckland.
  • Prioritise safe cycling and walking, especially around schools.
  • Investigate shifting the port from Auckland to Whangarei.
  • Introduce a fuel tax for Auckland to partially fund Auckland transport infrastructure.
  • Less government emphasis on roading projects. More emphasis on non-road transport, such as rail, shipping and public transportation.
  • More regional transport projects are likely to be funded.
  • For nation-wide policies policy, there are no set timeframes.  Policies which require legislative amendments will likely take more than a year to pass through the appropriate channels.

For Auckland specific policies:

  • Building a Light Rail connection down Dominion Rd from the City Centre to Mt Roskill within four years.
  • Extending Light Rail to Auckland Airport within 10 years.
  • Developing a regular bus service from Puhinui and Manukau to the airport within one year, to be progressively upgraded to bus rapid transit and extended to Botany and Howick within 10 years.
  • Building a north-western Light Rail from the City Centre to Waimauku within 10 years.

Water

Policy snapshotImplications for business or private interestsTimeframes for change
  • Introduce a new NPS for Freshwater Management.
  • Require, via the NPS, that significant increases in the intensity of land use for livestock are no longer a permitted activity as of right under the RMA.
  • Improve water quality standards for urban and rural environments, while taking into account seasonal differences.
  • Protect waterways, wetlands and estuaries from excessive sedimentation and soil loss.
  • Work with Māori to restore the mauri to waterways subjected to pollution.
  • Support regional councils in implementing new standards and bottom lines.
  • Honour existing Crown Irrigation investment commitments.
  • Wind down future Government support for irrigation.
  • No resource rentals or tax for water in this term of Parliament, but, a royalty on exports of bottled water will be introduced.
  • Enhanced reporting obligations for regional councils as well as requiring the Audit Office to report on freshwater objectives.
  • Existing irrigation schemes are unaffected but the Government is unlikely to commit to any new proposed irrigation schemes in the future.
  • There is likely to be stronger regulation around discharges to water.
  • Labour has proposed that increased funding be made available to the agriculture sector for fencing to keep stock out of steams, and for riparian planting.
  • Resource consents for high intensity agricultural land use may become more difficult to obtain as a result of more restrictive planning rules.
  • First 100 days: Hold a Clean Waters Summit on cleaning up our rivers and lakes.
  • Improvement to water quality within 5 years.
  • The worst polluted rivers and lakes to be cleaned up over a generation.
  • Modifications to the NPS and legislative amendments will take time to work their way through the regulatory channels.

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