Thomas Coughlan: Managed retreat, emissions pricing could slip as Parliament counts down to election

The clock is ticking on this Parliament. Photo / Mark Mitchell

OPINION:

There are just thirteen weeks, or 39 sitting days, left of this Parliament.

Ministers were reminded earlier this month to get their bids in for a slot in the busy legislative timetable. Of the thirteen weeks remaining, the equivalent of about three weeks will be needed to get through 32 hours of Budget and other financial cycle legislation.

Another week of sitting time has been set aside for the RMA replacement legislation, which is shortly due back from select committee.

Two pieces of legislation, each fiendishly complicated policy jobs, look like they may struggle to be introduced to Parliament before the last sitting day on August 31.

One piece of legislation, previously written off, looks like it may be introduced and even passed before the election.

On the struggling front: two thorny climate bills.

The first relates to managed retreat. This dropped on to the agenda ahead of the 2020 election with David Parker’s review of the Resource Management Act. The review recommended three pieces of legislation. The first two pieces - The Natural and Built Environments Bill and the Spatial Planning Bill - are currently in Parliament and await the report back from the Environment Committee (which will be delayed, but not enough that the bills will not be passed).

The third recommended bill was meant to legislate rules for handling the “retreat” of communities from climate-induced disasters. The review decided New Zealand needed a rulebook for deciding when and how to essentially declare when communities are at such risk of flooding that they need to be moved.

If that isn’t contentious enough, the system also needs to grapple with how much these homeowners should be compensated and how that compensation should be funded - a tax or levy of some kind appears to be the most likely.

A bill was originally proposed for the same time as the other RMA replacement bill. The timing was then delayed so that a bill would be introduced some time this term but not passed - it’s now acknowledged that even that may be a stretch.

National has said it’s keen to negotiate with the Government on a bipartisan framework, repeating the climate kumbaya that was the Zero Carbon Act.

Agricultural emissions may not make it to Parliament by the election. Photo / NZME

This may be needed to defuse the thorny issue of how to fund the system: a levy, a tax? But these negotiations may further delay the bill. National’s new climate change spokesman Simon Watts has yet to have a meeting with Climate Change Minister James Shaw.

The response to this year’s cyclones has delayed this further, with the Government wanting to make sure that cyclone rebuilding does not take place on land that should be abandoned.

In February, Shaw said he wanted to work quickly to ensure homes weren’t rebuilt where they shouldn’t be, warning that if the Government failed to move quickly, it would be too late to stop rebuilds happening in the wrong places.

Shaw’s proposal to gee things along is a national direction issued under the Resource Management Act, which would provide some immediate direction as to where one could or could not rebuild post-cyclone. It would not require legislation and could be implemented relatively quickly, following consultation. Other ministers are aware of this proposal, but it has not yet gone to Cabinet.

Despite not needing legislation, there is some talk about wanting to get a clearer sense of the general principles of the Government’s managed retreat legislation, at the same time as addressing the cyclone.

If a bipartisan approach is agreed, and there is every indication it will be, then not having legislation before the election is no great issue, as the bill would have a good chance of success after October.

Agricultural emissions are a different story - and it now seems likely Labour and the Greens will need to take this one to the polls, rather than resolving the impasse between them.

This, the most vexed of issues, has hung over the Government since Labour managed to get it into its coalition agreement with NZ First in 2017.

The torturous process towards agricultural emissions pricing began with the Interim Climate Change Committee (remember that?) in 2019, continued with the He Waka Eke Noa, the sector-led proposal, and was last heard from in December when the Government announced it would be watering down its own earlier proposal.

There’s a considerable gap between Labour and the Greens on the issue, with Labour keen to keep the emissions price as low as possible, while the Greens are keen for a higher price that would drive steeper emissions reductions. There’s a likelihood the divide will not be bridged and the Greens will take their own proposal to the polls in October, promising to force Labour’s hand if it strengthens its position in the next Government (which, if Labour and the Greens win, it certainly would).

Both sides have a point here. Labour does not want to lump costs on to farmers in the months before an election, giving it the incentive to lock something affordable down now, while the Greens have every incentive to hold off in the hope of a better result in October.

The Greens have little to gain by settling early and getting something on the statute books - National would probably repeal it if it won. They’ve got every incentive to hold off in the hope of something better.

David Parker's tax principles legislation could come in the Budget. Photo / Mark Mitchell

One piece of legislation that appeared to have fallen by the wayside, but has in fact survived, is David Parker’s bill on tax principles - a Tax Principles Act.

Parker announced this early last year, saying he believed a Government should be forced to state how its tax legislation met certain principles like fairness and efficiency.

Legislation was expected by the middle of 2022, but it was delayed.

Now it seems legislation could be announced within days - and could come with the Budget. It would use a Parliamentary mechanism giving it a truncated select committee process.

Tax fairness is one of the areas Prime Minister Chris Hipkins appears to have an interest. On becoming Prime Minister, he was fairly frank that he believed some New Zealanders were not paying their fair share.

Next Wednesday, Parker will release a report on the amount of tax being paid by the very wealthiest New Zealanders (research commissioned from IRD in 2021).

The most interesting thing hanging over this year’s legislative programme is whether the Government will find time to include tax changes in this year’s Budget. A tax bill is due in May (this is a regular, scheduled tax bill that is passed every year).