CA ANZ are pleased to see the Governance and Administration Committee echoing our calls for a permanent suite of emergency response measures that could be turned on as required, when disaster strikes.

NZ Tax Team leader, John Cuthbertson FCA said: “CA ANZ has long advocated for such an approach in respect of a suite of tax measures lying in hibernation which could be selected from and activated on a timely basis in response to a particular event. This is really important given the increasing severity and frequency of adverse weather and emergency events.”

“A pre-prepared suite of available emergency response measures from which to tailor a bespoke event response just makes sense. It would address the key concerns of response timeliness and adequacy of public consultation, providing greater certainty when most needed.”

“It could be developed with full public consultation where the time pressures associated with having to respond to a live emergency event are removed.”

The Government recently came under heavy criticism when it introduced the Severe Weather Emergency Recovery Legislation Bill (the Bill) with allowance for a one-day public consultation period.

The committee recommended that the bill be passed but highlighted the need for a new emergency recovery framework.

“Repeatedly introducing bespoke legislation with truncated, urgent processes to respond to individual emergency events is not an appropriate long-term strategy for managing emergency situations.”

The committee acknowledged that every event is different but noted the similarities between this legislation and other previous legislations such as the Canterbury Earthquake Recovery Act 2011, the Hurunui/Kaikōura Earthquakes Recovery Act 2016, and the COVID-19 Public Health Response Act 2020.

“It is time for a new emergency recovery framework. Legislation should be introduced establishing such a framework. Developing emergency recovery legislation that is not directly connected with an emergency event would allow for adequate consultation before a piece of legislation comes to the House.”

CA ANZ advocated for the inclusion of the Taxing Acts (the Income Tax Act 2007, the Goods and Services Tax Act 1985 and the Tax Administration Act 1994) in Schedule 2 of the Bill as “Clause 7 provides for Orders in Council to be made to grant exemptions from, modify, or extend any provisions of an enactment referred to in Schedule 2.”

“Inclusion of the relevant Taxing Acts in the schedule would provide maximum flexibility to Inland Revenue, offering access to a fast and efficient mechanism to implement responsive tax measures to an emergency/recovery event on a timely basis, and to provide appropriate taxpayer certainty when necessary” said Cuthbertson.

Utility is derived from the ability to access such a mechanism, not how many times it is likely to be used.

No Taxing Acts have been added to Schedule 2 at this time. The Bill offers a stop gap measure to deal with the pressing needs of those affected by the recent specified weather and flooding events. The long-term solution lies with the development of a new emergency recovery framework. Work on this should commence now.

“Providing taxpayer certainty and direction in times of disruption and uncertainty when decisions need to be made should not be underestimated.”