Legislation Notes

Tax Change for Pastoral Farmers

A new taxation law clarifying the deductibility of grassing and fertiliser costs is on its way. The new law aims to minimise compliance costs and the complexity of tax laws for farmers. The new legislation would:

  • confirm the immediate deductibility of grassing and fertilising expenditure that is not part of a significant capital activity on a farm, such as a dairy conversion;
  • provide that grassing and fertilising expenditure that is part of a capital activity is capitalised and amortised based on both having a useful economic life of three years;
  • define a significant capital activity as one that changes the nature or character of a farming activity, and that to qualify, the changes must involve a programme of other work and physical improvements; and
  • provide flexibility to set additional rates of amortisation for grassing and fertilising activities.

Proposed Ant-Spam Law

The Unsolicited Electronic Messages Bill would complement codes of practice, technical measures and consumer education to help fight spam. The bill would apply to emails, text messaging and instant messaging services by requiring that the sending of multiple commercial electronic messages of a marketing nature over these services be made only to recipients who have opted-in to receive such messages. Senders of promotional electronic messages will be required to abide by requests from recipients to opt-out of further mailings. The bill would also set out requirements relating to accurate sender identification and the provision of an unsubscribe facility.

Under the proposed legislation, the maximum penalties under the bill of $500,000 for organisations and $200,000 for individuals are designed as a deterrent to professional spammers who might be looking to operate from NZ. It is proposed that enforcement of the legislation will be conducted by the Department of Internal Affairs (DIA).

Veterinarians Bill

The Veterinarians Bill, which recently had its first reading, repeals and replaces the Veterinarians Act 1994 and provides for a more flexible governance structure. One main change is with registration. Currently only those holding a five-year veterinary science degree from recognised institutions are eligible for registration in NZ. The bill, if passed, would mean overseas veterinarians with four-year vet science degrees from non-recognised institutions are able to apply for registration.

The bill also gives the Veterinary Council wider options when dealing with complaints. New provisions aim to better align the Council's disciplinary powers to the seriousness of offences, and will allow it to impose penalties similar to those contained in the Health Practitioners Competency Assurance Act 2003.

Ngaa Rauru Kiitahi Claims Settlement Bill

This bill had its first reading in Parliament recently. The bill will settle the historical Treaty of Waitangi claims of Ngaa Rauru, based in south Taranaki. One of eight Taranaki iwi, Ngaa Rauru Kiitahi is situated between Patea and Whanganui. It has about 3000 members.

The bill provides for a $31 million cash settlement and the return of five sites of cultural significance, covering about 143 hectares. The settlement also includes a Crown apology to Ngaa Rauru Kiitahi for past dealings in breach of the Crown's Treaty of Waitangi obligations.

Taranaki iwi, like Ngaa Rauru Kiitahi, were seriously affected by confiscation of their land by the Crown in the 1860s. Ngaa Rauru Kiitahi were also subjected to the Crown's "scorched earth" policy and other military campaigns, resulting in loss of life and property. In one incident, government militia killed unarmed children.

Two further historical Treaty settlement bills - for Ngati Awa and Ngati Tuwharetoa (Bay of Plenty) - are also before Parliament.

Money Laundering, Terrorist Financing Laws

New laws will be introduced to counter money laundering and terrorist financing. There is currently no specific evidence that NZ is being exploited by international crime or terrorist groups to launder money or finance terrorism. However, the OECD's Financial Action Task Force has advised that changes are needed in our laws for NZ to be fully compliant with international standards.

Any legislation would feature the following:

  • a comprehensive monitoring framework to ensure all financial institutions meet standards for countering money laundering and terrorist financing;
  • persons providing money transfer or currency change services will be subject to a registration regime;
  • statutory requirements for financial institutions to comply with customer due diligence, and to implement internal anti-money laundering systems and procedures;
  • financial institutions will be required to obtain, verify and retain information concerning the identity of the originator of wire transfers through an amendment to the Financial Transactions Reporting Act (1996); and
  • officials will also consider the practicability of directors and senior managers of financial institutions in the insurance and securities sectors being evaluated to ensure that they meet the "fit and proper persons" criteria, which would bring them into line with the banking sector.

An interagency working group, chaired by the Ministry of Justice, will be consulting with the financial sector on the operation and funding of the anti-money laundering compliance monitoring framework and registration regime. This will report back to the government on progress by 30 April.

NZ Ratifies Cartagena Protocol on Biosafety

NZ has ratified the Cartagena Protocol on Biosafety, which regulates international trade in certain types of Genetically Modified Organisms known as "Living Modified Organisms" or LMOs. NZ's ratification means 113 countries have now ratified the protocol.

Easier Tax on Australian Unit Trust Distributions

Planned legislation would make it easier for NZ investors in Australian unit trusts to deal with associated tax matters. The law change will make it possible for NZ fund managers, on behalf of investors, to withhold tax on dividends from Australian unit trusts, thus saving many investors from having to file yearly income tax returns.

The measure will be completely voluntary - fund managers may choose to offer the service to their investors, and investors may choose whether or not to take advantage of it. Once enacted, the change will apply from 21 December 2004, the date of enactment of legislation that made distributions from certain Australian unit trusts taxable in NZ. The changes will be included in the current taxation bill by means of a Supplementary Order Paper.

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Contact for Enquiries

The Ministry of Agriculture and Forestry
Pastoral House
25 The Terrace
PO Box 2526, Wellington

Tel: +64 4 894 0100
Fax: +64 4 894 0720
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