A study into New Zealand’s retail fuel market confirms that it has features which may not be consistent with a workably competitive market, Energy and Resources Minister Judith Collins says.
The Study found that retail fuel margins have increased significantly over the last five years while fuel margins for aviation and commercial road users have been flat or falling. It also found that higher petrol prices in the South Island and Wellington are not explained by higher costs in those areas.
“There were difficulties in comparing the information received from the companies, and some very specific information that was required could not be obtained.
“As a result, the Study doesn’t definitively answer whether fuel prices are reasonable or not. However, the Report does conclude that “we cannot definitely say that fuel prices in New Zealand are reasonable, but we have reason to believe that they might not be.”
“This is a very complex area and the Study takes us a significant step forward in our understanding. I have now instructed my officials to assess the recommendations of the Study and report back to me by November.
“Furthermore, the Market Studies powers announced recently by the Minister of Commerce and Consumer Affairs will give the Government the option to direct the Commerce Commission to undertake a further competition-specific fuel market study, backed by the ability to require comparable data across companies. There is currently no legal mechanism to do this.”
“I would like to thank Z Energy, BP, Mobil and Gull for taking part in the Study.”
The Fuel Market Financial Performance Study, MBIE summary of the Study and the Cabinet paper are available here.
Minister for Ethnic Communities, Judith Collins, will tomorrow address the annual EPIC NZ (Ethnic People in Commerce) conference at Sky City Convention Centre which will bring together New Zealand’s ethnically diverse business community.
EPIC NZ will strengthen the links between government and the ethnically diverse business community, while providing valuable insights into digital disruption, innovation, and how to succeed in an ever changing global economy.
“Diversity is essential for the growth of New Zealand’s businesses. Research shows diversity helps build a stronger economy and creates jobs by encouraging innovation, deepening links with international markets and providing the skills we need for growth,” says Ms Collins.
Small Business Minister Jacqui Dean will also attend the conference this year to address the large number of small businesses in the audience. The conference provides information and support to help small businesses thrive.
“We want to ensure all businesses, including small and medium businesses have the opportunity to realise the benefits from innovation and diversity. EPIC NZ will showcase the New Zealand business story, new trends, and provides a platform to connect participants with inspiring business leaders,” says Ms Collins.
“I am pleased to see that government agencies will also be in attendance, to provide businesses with the opportunity to engage and access the support and services available to them.”
“EPIC NZ helps build links and connections between ethnic communities and the broader New Zealand business community. New Zealand’s diverse and growing population brings a range of skills and experience that can help create jobs and opportunities for all New Zealanders.”
Further information including the conference programme and speakers is available on the Office of Ethnic Communities website: https://ethniccommunities.govt.nz/events/epicnz-conference-auckland-30-june-2017
Revenue Minister Judith Collins has today signed a new tax protocol between New Zealand and Hong Kong. The protocol updates the existing double tax agreement between New Zealand and Hong Kong, to allow full exchange of information on tax matters between the two jurisdictions.
Once in force, the updated double tax treaty will require both Hong Kong and New Zealand to automatically exchange tax information with each other, in line with the G20 and OECD Automatic Exchange of Information global standard.
“This will allow New Zealand to meet its international obligations to complete the first automatic exchange of information by 30 September 2018,” Ms Collins says.
Under the global standard, New Zealand financial institutions must review their accounts and compile information to be reported.
New Zealand’s existing double tax agreement with Hong Kong was signed in 2010 but was limited to exchanges of information on request.
“The protocol will remove this limitation to allow automatic and spontaneous exchanges of tax information to take place,” says Ms Collins.
The Second Protocol will come into force once both signatories have completed their respective legal requirements.
The Government has extended the eligibility for Warm Up New Zealand: Healthy Homes insulation grants to include low-income home owners in addition to landlords with low-income or high health need tenants, Energy and Resources Minister Judith Collins says.
The grants will provide 50 per cent of the cost of ceiling and underfloor insulation for low-income home owners, as well as low-income tenants who are already eligible. The grants will be available until the end of June 2018.
“Insulation reduces health risks caused by cold, damp housing and these grants will benefit our most vulnerable households.”
Government grants have been targeted at landlords with rental properties occupied by low-income tenants since mid-2016, and Ms Collins says landlords should act promptly to get a grant.
“Landlords must insulate their rental properties by 1 July 2019 so I would advise them to get in quick and secure a grant while these are available. It’s a case of first in, first served.”
Over the past eight years about 300,000 homes have been insulated through the Warm Up New Zealand insulation programmes- Heat Smart And Healthy Homes. The programme was due to end in June 2016 but Budget 2016 allocated $18 million to extend the Warm Up New Zealand programme for a further two years until the end of June 2018.
“Analysis shows the avoided health costs to New Zealand from insulating a house are on average $854 a year for Community Services Card holders.”
The Energy Efficiency and Conservation Authority runs the Warm Up New Zealand: Healthy Homes programme – find details at www.energywise.govt.nz.
Who is eligible for insulation grants?the main tenant or home owner must have a Community Services Card, or a respiratory condition and their income is just over Community Services Card level The house was built before the year 2000
Transport Minister Simon Bridges and Energy and Resources Minister Judith Collins have announced new measures to support the uptake of electric vehicles and improve energy efficiency in New Zealand.
The Energy Innovation (Electric Vehicles and Other Matters) Amendment Bill, which passed its third reading today, implements parts of the Government’s Electric Vehicles Programme, makes changes to the Energy Efficiency and Conservation Authority’s (EECA) levy funding, and clarifies how electricity industry legislation applies to secondary networks.
“With 99 per cent of transport energy coming from non-renewable sources, this Bill will help reduce transport sector emissions by encouraging the uptake of electric vehicles (EVs). We are already seeing an increase in EV uptake, with the highest number of EVs registered in a month in May 2017,” Mr Bridges says.
“The law change means heavy electric vehicles can be exempted from road user charges and road controlling authorities (such as councils and the NZ Transport Agency) will be able to make bylaws to allow EVs to use special vehicle lanes.”
Ms Collins says the Bill makes a few small changes to a number of laws, but the changes will have substantial benefits.
“We are also adjusting the way EECA recovers its levy funding, so it applies across three existing levies rather than one. By adding a transport fuels levy and a natural gas levy to the existing electricity levy, EECA will now be able to spread levy funding across more activities to find the greatest gain.
“We think there are opportunities to improve New Zealand’s energy productivity and reduce emissions by focussing on the transport and industrial sectors in addition to electricity efficiency,” says Ms Collins.
The Bill also addresses secondary networks which are electricity networks indirectly connected to the national grid, such as via a local distribution network. Secondary network providers are often providing services that are the same as those provided on a local distribution network, but may not be subject to the same obligations and requirements due to current uncertainty in the legislation.
Ms Collins says, “Our aim is to clear up any uncertainty for secondary network providers, to have consistent treatment across business who are providing a similar service to consumers. Clearing up this legislation is very important as secondary networks enable innovation in the supply of electricity. We want to be future focussed to allow New Zealanders to innovate with new electricity solutions.”
Note to editors:
In May last year, the Government set a target to double EV registrations each year to reach 64,000 by the end of 2021. An electric vehicle, or EV, has a different engine to a petrol or diesel fuelled car – it has a motor that is powered by a battery which can be charged by plugging it into an electric power point (a bit like charging your cellphone battery).
Energy and Resources Minister Judith Collins has today released the New Zealand Energy Efficiency and Conservation Strategy 2017-2022.
The Strategy, Unlocking our energy productivity and renewable potential, is a companion to the New Zealand Energy Strategy 2011-2021. It sets the overarching direction for Government and specific actions for the promotion of energy efficiency and renewable sources of energy.
Ms Collins says the goal of the Strategy is for New Zealand to have an energy productive and low emissions economy.
“Through this Strategy, we are encouraging businesses, individuals, and public sector agencies to take actions that will help New Zealand make the most of its clean, renewable energy sources and use energy more productively, which will benefit all New Zealanders,” says Ms Collins.
The Strategy focuses on three priority areas that will provide the most cost-effective opportunities for energy savings and emissions reductions for New Zealand: process heat, transport and electricity.
“Importantly, the targets are measurable, reasonable and practicable by 2022, and the Strategy includes a range of actions to help achieve them including the development of a new process heat action plan.
“The Strategy also works in conjunction with the Energy Innovation Bill and other Government policies and programmes, including the Electric Vehicles Programme.
“It is designed to provide clear direction for the energy sector over the next five years and will move New Zealand towards better energy productivity and lower emissions. I would like to thank all those who took the time to make written submissions on the Strategy earlier this year,” says Ms Collins.
The New Zealand Energy Efficiency and Conservation Strategy, Unlocking our energy productivity and renewable potential, is available at www.mbie.govt.nz/info-services/sectors-industries/energy/energy-strategies
Muslim New Zealanders will today celebrate the Islamic festival Eid ul-Fitr following the sighting of the new moon and will come together to celebrate at Parliament next week, Minister for Ethnic Communities Judith Collins says.
Eid ul-Fitr, is celebrated by Muslims all over the world when the fasting month of Ramadan is completed.
“For members of the Muslim community, Eid is about celebrating the special meaning of Islam in their lives. Eid also gives all New Zealanders opportunity to acknowledge the valuable contribution the Muslim community makes to our nation’s religious, cultural and ethnic landscape,” Ms Collins says.
“New Zealand’s diversity is one of our nation’s greatest assets. When we come together and connect at public celebrations such as Eid, we build trust and understanding between communities and appreciate new perspectives.”
New Zealand’s Muslim community is made up of more than 40 ethnicities and there are around 36,000 Muslims in New Zealand.
Creditors are poised to receive greater protection from businesses owing debts of more than $150,000 as the Government has now set a threshold for reportable tax debt, Revenue Minister Judith Collins says.
Changes to the law earlier this year allowed Inland Revenue to disclose information about companies with significant tax debt to certain approved credit reporting agencies. A recent Order in Council sets a threshold of $150,000. A company’s tax debt over this amount may be disclosed to certain credit reporting agencies.
Ms Collins says this information can be critical for smaller creditors who would otherwise be unaware they were dealing with a business that has a significant tax debt.
“Usually when a company’s tax debt reaches this level, it’s likely that other options to resolve the debt have been unsuccessful and Inland Revenue may be considering insolvency and enforcement proceedings. At this point the risk to other creditors is greatest.
“This approach we’re taking to debt is similar to the commercial approach. It means that smaller creditors dealing with a business carrying significant tax debt will be able to make more informed decisions about credit risks,” Ms Collins says.
The $150,000 tax debt threshold was decided after extensive consultation and will come into force on 29 June 2017. It is currently limited to companies.
The Government is proposing to make tax simpler for individuals, with people whose only income is from a salary, wages or investments no longer being required to file tax returns to receive tax refunds or to calculate any additional tax.
The consultation document, Better administration of individuals’ income tax, was released today by Finance Minister Steven Joyce and Revenue Minister Judith Collins.
“The Government is very keen to ensure that the tax system is as simple as possible so people can clearly see the link between their efforts and their after-tax income,” Mr Joyce says. “We started the process in Budget 2017 with the tax threshold changes and the removal of the Independent Earner Tax Credit, and this is the next step to a simpler fairer tax system.”
Ms Collins says currently, many people might be owed a refund or have tax to pay and not realise it.
“This could occur if they haven’t worked for the full year, they have fluctuating earnings, or some of their income has been taxed at the wrong rate,” Ms Collins says.
“It would mean that Inland Revenue will have better income information and will be able to calculate and issue refunds, or let people know if they have tax to pay without the need for taxpayers to do anything else.”
“Under this new system people will be much less likely to end up with large tax bills at the end of the year. They’ll be paying a more accurate amount through the year and receive any refunds automatically. This is good news for about three million taxpayers,” Mr Joyce says.
Submissions close on 28 July 2017. See www.makingtaxsimpler.ird.govt.nz for the detailed proposals.
New Zealand signs OECD Multilateral Instrument
A new treaty signed in Paris this week is a significant step forward in the fight against base erosion and profit shifting (BEPS), says Revenue Minister Judith Collins.
"Many BEPS techniques involve tax treaty abuse. The Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent Base Erosion and Profit Shifting (known as the Multilateral Instrument) allows a worldwide network of several thousand tax treaties to be quickly updated to adopt recommendations from the OECD’s BEPS Action Plan.
"Renegotiating all these tax treaties bilaterally to include the OECD recommendations would be too time-consuming to be practical. The Multilateral Instrument is an innovative solution, which allows these treaties to be rapidly updated,” she says.
The Multilateral Instrument includes articles on “permanent establishment” avoidance, treaty abuse, dispute resolution and hybrid mismatches. These address the key treaty-related BEPS issues. The extent to which these provisions are incorporated into New Zealand’s treaties will depend on the final positions of both New Zealand and our treaty partners.
While these positions will be confirmed upon ratification, preliminary positions will be made available by the OECD on its website.
Once both parties have signed and ratified the Multilateral Instrument, it will prospectively modify most of New Zealand's existing bilateral treaties. It is likely that New Zealand’s treaties will begin to be modified from 2019.
Ms Collins says the signing of the Multilateral Instrument by a significant number of jurisdictions demonstrates the power of a global solution to the BEPS problem.
“This has been almost two years in the making and I am very proud that New Zealand was heavily involved in its development," says Ms Collins.
Media contact: Julie Johnston 021 280 3253