Parliament legislated at great speed to change the tax laws but slowed down when MPs’ pay cuts were at issue

The Covid-19 emergency has been used by the government to justify legislative urgency and curtail Parliamentary scrutiny.

The aim was worthy – to introduce  a package of tax reforms. The process was shabby.

Urgency provisions were invoked to have the package legislated quicker you can say IRD.

Just as shamefully, the government moved smartly this week to scuttle a bill aimed at lopping the pay of all members of Parliament.  Finance Minister Grant Robertson denied Parliament the opportunity to consider this measure, promoted by Act leader David Seymour, by vetoing its introduction.

Revenue Minister Stuart Nash, in charge of the tax package, was unapologetic about the unseemly haste he intended should be taken.  He issued a statement to proclaim:

A significant package of tax reforms will be pushed through all stages in Parliament today to throw a cash flow lifeline to small businesses.

Nash was referring to the Covid-19 Response (Taxation and other Regulatory Urgent Measures) Bill, aimed (he said) at giving businesses more than $3 billion in tax refunds as they deal with the economic impact of the virus.

Rather than give any hint of being apologetic, the Minister was boastful:

“This response delivers the single biggest government support package to businesses via the tax system in modern New Zealand history, and more is yet to come.”

The changes had been signalled two weeks earlier and design features finalised after discussions between Inland Revenue and external tax practitioners.

The Minister said he was

“ … grateful to the accounting and legal profession and IR officials for their rapid work on this legislation.”

But he obviously saw no need to allow taxpayers’ elected representatives to examine the results for flaws.

It was  this autocratic carry-on which drew the ire of Idiot/Savant on No Right Turn.  He wrote:

“We’re in a state of emergency at the moment, demanding a quick policy response from the government. So, you’d expect some use of parliamentary urgency as a result, and it might even be justified. But even expecting that, I was shocked today to see the government introduce an urgent bill, with no debate on the first or second readings, and no committee stage.

“Its the most extreme urgency I have ever seen in our Parliament. It means there will be a debate, and a vote, but no real scrutiny, and no chance to correct the inevitable drafting errors. And of course, the opposition didn’t even get to see the bill until earlier today (its now online, so the rest of us can see it as well).

“Its as if the regular procedural abuses had become so normalised that they had to invent a new one just to stress that they were taking the pandemic seriously. Except that its not a way to get good legislation. Even the democratic fraud of an abbreviated select committee stage would have been preferable to this (and since it has retrospective application, its not as if that would make much of an implementation difference anyway).”   

In a crisis (the author said) he expected some urgency, where required – but:

“I don’t expect Parliament to essentially just give up on doing its job as a legislature and stop scrutinising legislation entirely. While this is a technical bill, it changes a very complicated area of law, which makes scrutiny essential just to avoid mistakes. This terrible process all but guarantees a fuckup, which will then no-doubt require equally urgent legislation to fix. Wouldn’t it be better if the politicians did their jobs properly in the first place?”

Well said.

The government was just as hasty when dealing with Act leader David Seymour’s bill to cut MPs’ salaries, but in this case the aim was to ensure it finished up in the legislative dustbin.

On the first day back in Parliament this week, Seymour put forward a bill that would result in all MPs taking a paycut, not just the Prime Minister and Ministers.

It was vetoed by Grant Robertson.

The reason?

Robertson told Heather du Plessis-Allan the government is working on its own bill

“The government is drafting a bill to deal with this exact issue and we are adopting the normal processes of consulting with all members of parliament, instead of just one individual putting up a bill.”

But Seymour told du Plessis-Allan he had not heard of such a bill, and nor had the National Party.

He said he had sent a copy of his bill to all the parties in parliament three weeks ago and invited improvements.

He heard back from the Greens and National but not Labour or New Zealand First.

He says MPs’ pay should be cut so that the same can be done under legislation that governs these things to people in the public sector.

Parliament has to change the law to allow the Remuneration Authority to make changes.

We have since learned from Prime Minister Jacinda Ardern that a proposed bill to allow MPs and councillors to take pay cuts is being drafted.

Ardern said she expected the legislation, which was being overseen by the Remuneration Authority, to be ready “shortly”.

The Taxpayers Union has been scornful of what happened, describing the veto of the bill to cut MP salaries as a disgraceful display of self-serving behaviour.

Taxpayers’ Union spokesman Jordan Williams said:

 “The MPs who used a veto to insulate their pay packets from the financial effects of COVID-19 should be ashamed.

“These politicians are willfully putting themselves out of touch with businesses and households, who have been forced to cut their cloth in the face of an economic shutdown.

“The veto also undermines the spirit of the Prime Minister’s earlier move to cut ministerial salaries. Why should back-bench MPs with few essential responsibilities be protected? Most of them have been sitting at home like the rest of us, but only they are insisting on full pay.

“No wonder trust in MPs is worse than for used car salesmen. Stuff like this shows they deserve it.”

But was this tart chis critique unfair?

The bill was vetoed by a Minister whose pay has already been cut, not by a backbencher whose pay would have been cut.


One thought on “Parliament legislated at great speed to change the tax laws but slowed down when MPs’ pay cuts were at issue

  1. More haste less speed – Nash stuffed it up.

    Will he resign – no way.

    Will he be sacked – no because incompetence is a requirement for Ministers in this government.

    Could Deborah Russell take this portfolio – oops she stuffed up in this area too. Was she advising Nash?


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