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Employment

Firearms reform 2025

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Government considers current legislation to be outdated and overly complicated

The government is currently undertaking a comprehensive reform of our firearms laws; it aims to modernise the Arms Act 1983 which it considers to be outdated and overly complicated. The overhaul is the fourth phase of a commitment to reform the firearms regulatory system following on from three previous phases implemented after the 2019 Christchurch mosque shooting.

Public consultation on the proposed changes took place earlier this year.

 

Proposed changes

Key proposals include:

  • Rewriting the Arms Act 1983 entirely to create a more coherent and effective legislative framework that balances public safety with the rights of lawful firearms users
  • Strengthening Firearms Prohibition Orders, expanding the criteria and allowing the courts to impose Orders on gang members and associates convicted of drug, firearms or violent offences
  • Reviewing the Firearms Registry to assess its effectiveness and identify areas for improvement. The government aims to ensure it is promoting public safety without imposing unnecessary burdens on lawful firearms owners
  • Transferring the Firearms Safety Authority (to be renamed the Firearms Licensing Authority) from the responsibility of New Zealand Police to the oversight of another government entity. The government believes this will enhance independence and effectiveness of firearms administration, and
  • Amending the regulations of shooting clubs and ranges to ensure their facilities are operating safely and compliantly while supporting legitimate activities of firearms enthusiasts.

 

Potential benefits

The proposed reforms have several potential benefits, including:

  • Improved public safety with stricter controls and strengthened Firearms Prohibition Orders
  • Better regulation and oversight to modernise outdated laws
  • More effective firearms licensing through an independent Firearms Licensing Authority, allowing police to focus their resources more on illegal firearms and gang-related gun violence rather than administrative licensing work
  • Enhanced gun owner responsibilities through increased requirements for safe storage, record-keeping and reporting, and
  • Stronger measures against gun trafficking through stricter background checks, licensing and a well-regulated system.

With each benefit, however, shortcomings follow. Potential drawbacks include:

  • Possible overreach and bureaucracy leading to inefficiencies, delays and higher administrative costs
  • Limited impact on criminals and gangs given most gun crimes involve illegally obtained firearms, unaffected by strict laws. Police unions have expressed concerns that moving licensing away from the police could weaken police ability to monitor gun-related crime
  • Compliance challenges, with some gun owners struggling to comply with new laws due to lack of awareness or financial barriers, such as affording secure storage or meeting new licensing requirements
  • Potential for unintended consequences, such as over-regulation leading to more non-compliance or a larger black market, and
  • Farmers and pest controllers who rely on firearms for work may face unnecessary restrictions affecting their business operations.

Federated Farmers has been particularly vocal about the rewrite, noting that the changes over the previous government’s term were ‘a whole lot of really silly, impractical amendments’ that have made it harder for people to access firearms.

Farmers have noticed how those changes have made it harder but cannot identify anything that has made it easier. Farmers have a genuine need for firearms and gun laws need to be more straightforward for those who need reasonable access to firearms.

The government has now completed public consultation; it aims to pass the new firearms legislation before the end of its current term in 2026.

Emissions Trading Scheme

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A change in approach?

The Emissions Trading Scheme (ETS) will turn 17 years old in September. An integral part of the Climate Change Response (Emissions Trading) Amendment Act 2008, the ETS has undergone significant change throughout its existence.

 

What is the ETS?

The ETS is New Zealand’s main tool for reducing greenhouse gas emissions. It essentially works by requiring participating businesses to measure and report on their greenhouse gas emissions. Businesses that participate in the scheme must surrender what is known as an ‘emissions unit’ for each tonne of carbon dioxide that they emit. One tonne of CO2 will cost you one emissions unit.

Over time, the government will reduce the number of units that are supplied into the ETS. The effect of this is that emissions units increase in demand as participating businesses buy and sell emissions units from each other. The price of emissions units in the ETS will (in theory) trend upwards, helping New Zealand to steadily move towards the goal of being a net zero emitter of greenhouse gas by 2050.

 

Recent developments in the ETS

There has been some concern regarding the conversion of productive farmland into forestry in order to gain emissions units. The government has announced changes to the ETS; its aim is to strike a balance between achieving New Zealand’s climate goals, and protecting the longevity of our most profitable farmland.

The government has signalled that the proposed changes to the ETS will be formally introduced to the House this year, with the new rules expected to come into force by October 2025.

 

All trees created equal?

The most significant proposed change to the ETS is the temporary prohibition of the registration of exotic forestry (non-native) for emissions units on Land Use Capability (LUC) 1–5 farmland. LUC separates land into eight categories based on an assessment of the land’s capability for use. LUC Class 1 land is the most versatile, with LUC Class 8 land being the least versatile.

At present, any tree can be planted on any farmland to earn emissions units (provided the tree species planted can reach at least five metres in height). This means there is no incentive to prioritise the planting of native trees over the planting of exotic species, such as the Radiata pine.

The proposed changes will also require ETS participants to exercise greater discretion in choosing which areas of farmland to plant on; should you wish to plant an exotic species, you must do so on your less productive land.

 

A flexible approach

The proposed rules are not entirely hard and fast as there is some wriggle room for ETS participants. Up to 25% of LUC Class 1–6 land on a farm can be used to plant exotic forestry for the purpose of registering it under the ETS.

The proposed new rules have also scrapped plans to include agricultural processors (meat processors, dairy processors, nitrogen fertiliser manufacturers and importers, live animal exporters) in the ETS. Agricultural processors had been due to enter the ETS from 1 January 2025, but the passing of the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill on 26 November 2024 has stopped this.

 

Why the changes?

The proposed changes clearly signal the government’s desire to promote the planting of native species. It appears, however, that consideration has been given to the idea that ETS participants have benefitted from the planting of exotic species that can be planted en masse and grow quickly. This practice will remain, with the caveat being that it will need to take place on less productive farmland.

Updates to the residential tenancies legislation

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Tenancy terminations and pets

The Residential Tenancies Amendment Act 2024 has significantly updated the Residential Tenancies Act 1986 and the laws governing the relationship between landlords and tenants.

Some of these updates took effect on 30 January and others are expected to  roll out in the remainder of 2025. These updates transform the rights and obligations of landlords and tenants – for better or for worse. We summarise the key updates below.

Termination of tenancies

No reason needed to terminate tenancy: Since 30 January 2025, landlords are no longer required to provide a reason to their tenants for terminating a periodic tenancy; they simply have to state they are giving 90 days’ notice of termination. For clarity, a ‘periodic tenancy’ is a standard tenancy with no end date, unlike a ‘fixed term’ tenancy which lasts for a set amount of time, say 12 months. Before 30 January 2025, landlords had to give grounds for terminating a tenancy, such as for demolition or extensive renovations.

Terminating on ‘special grounds’: Landlords now only need to give 42 days’ notice when they are terminating the tenancy on special grounds, including if a family member needs to live in the property as their main residence, or the property has been sold and needs to be vacated for the new owners to take over. Until 30 January,  landlords had to give 63 days’ notice.

More rights for tenants: The legal rights and abilities of tenants have also increased. Tenants now have up to 12 months to apply to the Tenancy Tribunal for an order declaring a termination notice to be unlawful and that the landlord has retaliated against the tenant for enforcing their legal rights, or in response to legal actions taken against the landlord by another person or body. If a tenant applies within 28 days of receiving the termination notice, they can request that the notice be cancelled.

Before 30 January 2025, tenants only had 28 days to apply to the Tenancy Tribunal in respect of a notice in general.

Tenants also now only need to give 21 days’ notice for ending a periodic tenancy. Previously, they had to give at least 28 days’ notice.

The Amendment Act also confirms that tenants may leave their tenancy at shorter notice if they, or one of their dependents, are experiencing family violence.

It will be interesting to see how these amendments play out, especially when reviewing future decisions of the Tenancy Tribunal, including where tenants dispute termination notices. We touch upon other changes and updates to the powers of the Tenancy Tribunal below.

As an aside, the ways in which landlords and tenants can give notice to one another has changed. The Amendment Act confirms that landlords and tenants can give notices in more modern ways, such as over text or messenger, rather than a physical written notice.

Pets

In the second half of 2025, we expect to see major law changes relating to pets kept in rental premises. Landlords will be able to require their tenant to pay a ‘pet bond,’ on top of their original bond, which can  be an additional two weeks’ rent on top of the original bond. A tenant must obtain their landlord’s written consent to keep a pet on the premises. A landlord may refuse the request only on reasonable grounds, including the premises not being suitable for the type of pet or vice versa. It could be that the breed of dog is too large, and/or the nature of the breed is considered destructive or aggressive and/or could be disruptive to neighbouring properties.

If a tenant’s pet dies during the tenancy, the tenant is entitled to ask for the return of the pet bond from the landlord less any compensation for any damage, and reasonable wear and tear attributable to the pet.

We look forward to seeing how these new rules relating to pets play out.

Tenancy Tribunal

Since 20 March 2025, the Tenancy Tribunal should become quicker and more efficient in its day-to-day operations. The Tribunal now has, for example, the ability to determine matters ‘on the papers’ (considering an application and response, then making a decision) without the need for a hearing.

In more complex and technical cases, and where there are major factual disputes, however, it is likely that the Tribunal will still require a proper hearing.

Issues affecting finance and settlement

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Natural disaster risk and insurance

When you have lending secured by a mortgage on your home, it will be a condition of that lending that you have full replacement insurance for your house. This is a requirement for any new lending (and your lender won’t allow you to draw down the loan without seeing evidence that this in place), and an ongoing requirement with existing lending.

Insurers are now commonly asking whether the local council has recorded that a property could be impacted by any natural hazards (for example, whether it is in a flood zone). If it is noted that the property is potentially impacted by a natural hazard, the insurer may have some follow up questions before deciding on whether it will offer insurance. It may ask whether the local council has completed any remedial work to address the hazard, or whether any specific work has been completed with the property to reduce the impact of the hazard, such as the property being built on piles to elevate it above the anticipated flooding level.

Insurers are also asking questions about whether the property has previously been affected by natural hazard events, such as flooding, earthquakes or landslides/slips.  As above, if it has, an insurer is likely to have follow up questions regarding any remedial work that may have been completed.

Depending on the potential hazards, some insurers may be reluctant to offer insurance cover. If you are considering buying a property that could potentially be impacted by natural hazards, we recommend you confirm you can obtain full replacement insurance before submitting an offer or within the period of your finance condition.

Unconsented works: what can go wrong when selling?

Completing work on your property without obtaining a building consent may seem like a good way to renovate your property without the time delays or cost of your local council involvement. It is, however, likely to lead to significant headaches during your ownership or when you sell your property.

Should you suffer a loss to your property that is caused by non-compliant work, such as installing a wet-area shower without a building consent and the shower room then floods and causes water damage to your property, you may find that your insurer declines your claim. Not only can this mean you will need to fund the cost of repairs yourself, but it can also have implications in obtaining other insurance policies in the future as you will need to disclose that you have previously had a claim denied.

When selling your property, you have an obligation to disclose to buyers any work you have completed but for which you have not obtained the required consent. Additionally, buyers will often review either a Land Information Memorandum or the Property File as part of their due diligence. If the buyer (or their lawyer) notices that there are renovations to the property which required a building consent and it was not obtained, the buyer may not be able to obtain insurance or finance.

Any unconsented works will need to be disclosed to both the insurer and the lender.  Depending on the nature of the work (and the insurer), insurers may decline to cover the property with the unconsented work.

If the buyer can’t obtain full replacement insurance, they will not be able to confirm satisfaction of a finance condition. Even if the buyer can obtain insurance, their lender may not accept the property as security; this means the buyer will be unable to confirm satisfaction of the finance condition.

We recommend you always obtain the required building consent before beginning any building work.

If you have already completed work without a building consent, talk to us about the best way to approach your local council to rectify the issue.

If you aren’t sure whether your next project requires consent, Can I Build It is a good tool which can be used as a guideline; the website can be found here.

New deed of lease documentation

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Landlords and tenants should be up to date

 

In November 2024, The Law Association of New Zealand (TLANZ), formerly the Auckland District Law Society, released an updated version of the standard form deed of lease document, its 7th edition.

This new edition of the deed of lease (DoL) includes a number of new or varied provisions that TLANZ has included in response to the evolving commercial leasing landscape; in some cases these provisions address pitfalls in earlier DoL editions that sought to deal with issues that arose during Covid. The result is that there are a number of new default provisions for both landlords and tenants to consider when entering into a lease, and new procedures to be aware of that didn’t form part of previous leases.

Rent

Numerous provisions affecting rent, rent adjustment and rent abatement have been included in this new DoL. Where previous DoL editions referred only to CPI or market rent adjustments, the 7th edition includes an option in Schedule 1 to include a fixed rate adjustment for rent. That means that on the rent adjustment date recorded in your lease, the rent will be adjusted by a fixed percentage, rather than an adjustment being based on market rent or a CPI calculation.

There are benefits in this approach for both landlords and tenants. It provides a greater level of certainty for anticipating rent increases for tenants and income for landlords.

In addition to adding this option, the 7th edition has added to Schedule 1 an option to include upper and/or lower limits on rent adjustments. This sets out at the forefront of the DoL limits on any ratchet-type provisions which previously would have been buried in the standard/further terms of the lease.

Again, these provisions can give greater clarity to both parties around the extent of any rent adjustment, where the adjustment is not a fixed rate, and would advise tenants whether an adjustment could result in a lower rent payable (although it is rare that this would be the case).

Outgoings

The outgoings are other expenses under the lease that the landlord passes on to their tenant. The 7th edition requires, as the default position, that the landlord provides an annual budget of outgoings to the tenant.[1]

This is a helpful inclusion for tenants as it provides certainty for budgeting and greater transparency around the costs additional to rent that the tenant must pay. This is invaluable information for anyone looking to enter into a lease and should be reviewed by any prospective tenant prior to entering into a new lease.

Reinstatement

Reinstatement is not a new concept under the lease, although provisions have been added to better define the rights and obligations relating to signage, tenant’s chattels, alterations and the premises overall.

An important aspect of this relates to the tenant’s chattels; this is a new inclusion in Schedule 6. Items listed here will inform the obligations around the removal of tenants’ chattels under the new reinstatement provisions.[2]

Knowing what tenants need to remove, put back and who bears the cost is crucial to understand before entering into a new lease, especially if you plan on modifying the premises in any way before or during the term. A tenant will always need the landlord’s permission to make any changes or alterations, and it is best to get this in writing.

Rent abatement

If at any time a tenant cannot access the premises (or part thereof), they should receive a discount on the rent at the rate that is set out in Schedule 1. This has been included to set a starting point for rent to be discounted during no access periods rather than tenants having to endure a long determination process to agree the discounted rate during the term of the lease.

The rate recorded in Schedule 1 can be reviewed under the terms of the lease and the process for this is clearly set out.[3]

These are just some of the changes that have been included in the Deed of Lease 7th edition. Whether you’re a tenant entering into a new lease for your business or you’re looking to get a lease prepared for a commercial property you own, talk with us so you understand and use these changes to ensure the terms are best suited for you.

 

 

 

[1] Clauses 3.7–3.10 in 7th edition.

[2] Clauses 23.1–23.5.

[3] Clauses 29.3-29.5.

Fencing Feuds: How the Fencing Act Can Keep the Peace

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Fences may not create friendships, but they do help make properties look tidy and defined. However, disagreements over who should pay for them can quickly turn a friendly wave into a frosty silence. Fortunately, the Fencing Act 1978 sets clear rules to help property owners handle fencing disputes without unnecessary stress.

 

Who Pays for the Fence?

If you are building or replacing a fence on a shared boundary, your neighbour is generally required to share the cost—provided the fence is “adequate,” meaning it’s reasonably fit for purpose. Before you start digging, discuss your plans with your neighbour. If you cannot agree, the Fencing Act provides a formal process to resolve disputes.

 

A Formal Process with Strict Timeframes

If you want your neighbour to contribute, you must serve them with a fencing notice detailing the fence type, cost, and who will build it. They have 21 days to agree or object. If they don’t respond, they are deemed to have accepted and must pay their share.

 

If they object, they must issue a cross-notice within 21 days, outlining their concerns or suggesting changes. If no agreement is reached, mediation, arbitration, a Disputes Tribunal, or a District Court ruling may be needed.

 

Common Fencing Issues

What if my neighbour wants a premium fence, but I prefer something simple?
They can only require you to pay half the cost of an adequate fence—not a luxury upgrade.

 

What if my neighbour sells their house mid-process?
You will need to start over with the new owner.

 

Can my neighbour refuse to let the builder step onto their land?
Yes, but you can seek a court order for reasonable access.

 

What if they damage the fence?
They must cover the full repair cost.

 

What if urgent repairs are needed while they are overseas?
You can fix the fence and recover half the cost when they return.

 

Fencing Around Swimming Pools

If your neighbour installs a swimming pool near the boundary, they must fence it in. You may need to contribute, but only up to the cost of a standard boundary fence.

 

Height Restrictions

Most fences can be built without needing council consent. However, local council rules may impose restrictions, particularly in heritage areas, so it is always worth checking before starting work.

 

Need Help?

Navigating fencing laws can be tricky but getting it right the first time saves headaches. If you need advice or assistance, the team at Edmonds Judd are here to help your fencing project go smoothly— hopefully without neighbourly disputes turning into courtroom battles.

 

Fiona Jack

A loved one has lost capacity, now what?

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What happens if your loved one loses mental capacity due to illness or accident?  Who will make decisions about whether they need to go into care?  Who can manage their finances to pay for their medical costs and living costs?

 

Hopefully your loved one has enduring powers of attorney in place appointing people to make decisions about their welfare and property.  But what if there are no enduring powers of attorney?

 

In that case, you will need to apply to the Family Court for orders under the Protection of Personal and Property Rights Act 1988 (PPPR).  There are various types of court orders that can be made appointing one or more people to manage someone else’s affairs.  Deciding which court orders to apply for depends on the circumstances and needs of the person who has lost capacity.

 

Before applying to the court, you should be aware of the strict legal obligations and responsibilities you will have if appointed, and that the court will have ongoing oversight to ensure affairs are being managed appropriately.

 

While it may cost a few hundred dollars to get enduring powers of attorney while someone is healthy, it can cost a few thousand dollars to get court orders if  they lose capacity there are no enduring powers of attorney in place.  So, it is a good idea to encourage your loved ones to get enduring powers of attorney while they are still healthy.

Kerry Bowler, Solicitor Kerry Bowler

Handling an employee’s poor performance

Employment, First Job, Latest news, Media, News, Relationships
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Luke’s juggling a lot right now—his first baby on the way, a crash in Sally’s Tesla, and new business work piling up. But his biggest challenge? His employee, John.

John does not have the experience he made out during his interview and he is not able to complete tasks given to him.

Luke has done his best to mentor John and to train him on the job, but John doesn’t seem to want to learn or improve. Luke is at his wits’ end as his business can’t continue like this. Luke has no idea what to do to fix the situation with John and is not sure if he can just let John go.

First things first, Luke pulls up a copy of John’s employment agreement to see what it says about dealing with poor performance. Luckily for Luke, the employment agreement sets out exactly what he should do as his agreement sets out a process for addressing poor performance. He also recalls his lawyer telling him that the Employment Relations Act requires employers to act in a fair and reasonable way and to act in good faith towards John.

Luke has also realised that he can’t just fire John for his poor performance.

Luke can see that his mentoring John was a good start, but it is clear to him that he now needs to take the formal steps set out in the employment agreement to let John know that he is concerned about his performance and that he will place him on a performance improvement plan.

After having a chat with his lawyer, Luke finds out that some of the steps that he is going to need to take are:

  1. Identify the issues with John’s performance: clearly identify the performance problem, whether it’s related to the quality, quantity, or timeliness of John’s work.

 

  1. Communicate his concerns to John: Luke decides to invite John to a meeting to discuss his performance. He’s then going to meet with John to discuss the performance issues, explaining what areas need improvement and why it’s affecting the workplace.

 

  1. Provide support and clear expectations: Luke realises he needs to offer support, so, he has decided to offer John some further training and additional resources. He’s also going to set clear, achievable performance goals and a reasonable timeframe for improvement, and let John know the possible consequences if his performance does not improve.

 

  1. Monitor John’s progress: Luke has set up some reminders in his diary to monitor John’s progress towards meeting the set performance goals and provide regular feedback during meetings.

 

  1. Hold a formal review: If John’s performance doesn’t improve, Luke will arrange a formal review meeting for John to respond to the feedback.

 

  1. Implementation of further performance improvement plans, final warning or dismissal: If there is still no improvement, Luke now knows that he has some options about how to proceed from there – such as a performance improvement plan, issuing a final warning, or, in more serious cases, proceeding with dismissal.

Luke has decided to keep in touch with his lawyer as he works through the process with John to make sure that he meets his obligations as an employer. He’s keeping his fingers crossed that John will improve, and that a formal review and other actions won’t be necessary.

 

Kristin O’Toole

 

 

 

Annual Leave and the Path to Parenthood: Luke’s Story

Employment, First Job, House, Kids, Latest news, Media, News, Uncategorized
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Luke is very excited about the impending birth of his first child and is taking the time to reflect on his life so far. As he is driving to the store to pick up some groceries, he recalls the first job he ever had – working as a bartender in a lovely little Scottish pub in Dunedin. His pay wasn’t significant back in those days, but he worked hard and he saved his pennies. It wasn’t long before he’d saved up enough to go on a big holiday!

Luke had always dreamed of flying to Indonesia to see the Komodo dragons in the wild. Once he was sure he had enough in the bank, he went to ask his manager, Mr Moyes, if he could have some time off.

“Tell me lad,” Mr Moyes said, furrowing his brow, “how long have you been working for me now?”

“Why, nearly six months, Mr Moyes! I reckon I deserve a break” Luke said, sheepishly. Beads of sweat began to drip down his pimply face.

“Well, Luke,” Mr Moyes began, shifting uncomfortably in his seat, “it’s not that I don’t think you deserve a nice holiday. Aye, you’re an excellent worker, and you have a knowledge of whisky as fine as any Scotsman! But I just wonder, won’t the shortfall from the lack of wages during your holiday be an issue?”

Luke gulped.

“But sir, I thought I would simply take annual leave. After all, I’ve accrued ten days’ worth. That’s more than enough for my holiday, assuming it doesn’t take longer than that to find the Komodo dragons.”

“Well, you see Luke,” Mr Moyes responded, offering a wry grin. “Here in Aotearoa New Zealand, you can’t actually take annual leave until you’ve been working continuously at the same place for 12 months. You continue to accrue it, yes, but there’s no entitlement to actually take the accrued leave until your first anniversary of employment. You can take annual leave you’ve accrued before then, but this is at my sole discretion, being your gaffer and all”.

“Oh,” Luke exclaimed, crestfallen. He had so been looking forward to travelling to Indonesia. Mr Moyes looked him up and down and sighed.

“Tell ya what lad, I think we’ll manage without you. You can take the leave you’ve accrued, no problem”.

Luke jumped for joy. He was going to Indonesia! He paused, wondering if he could try his luck further.

 

“Actually Mr Moyes, how would you feel if I went to Indonesia for three weeks instead of two?” Mr Moyes jumped out of his seat.

“That’s a bit cheeky!” he said, his eyes as big as wagon wheels. “But alright, you can take leave that you haven’t accrued yet in this country too, also at my own discretion. Just be warned, though. If you leave my employ before you’ve accrued that extra week of leave, I’ll require you to pay me back. Every cent!”

Mr Moyes’s warning fell on deaf ears though, as Luke could think only about Indonesia, sipping on coconuts and surveying the local fauna.

Of course, Mr Moyes was right.  Most employees are entitled to four weeks of annual holidays, and they start accruing this leave from their first day on the job. Accrued leave then sits there, unused, until the 12-month anniversary of your employment. Your employer can let you take the leave you’ve accrued before the 12-month anniversary, but this is at their sole discretion.

 

You can also take leave before you’ve accrued it but this can be risky, as you may have to pay your employer the difference, if you resign before it’s accrued.


Luke snapped back to reality. He hadn’t worked for Mr Moyes for some time now, but he would always remember his words and his warning. He smiled, and thought about the life lessons he would pass down to his child. Unfortunately, contemplating this was very distracting for Luke, and he crashed into the car in front of him! Luckily, no one was hurt, but Luke wondered what Sally would think of him crashing her brand new Tesla…

 

Jamie Graham

Business briefs

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Commerce Act 1986 and Commerce Commission review

Last year the government announced a comprehensive review of New Zealand’s competition framework to combat monopolistic practices and boost economic productivity. Limited options and high price points in the grocery, banking and building supply sectors are reflective of market failures resulting from such practices and, subsequently, prompted this review.

 

Commerce Act 1986: The review includes a revision of the long-standing merger regime embedded in this legislation. Although mergers can enhance efficiency, they may also create a power imbalance in the market and limit consumer choice. The current regime will be reconsidered to mitigate the risks posed by larger companies that make small, incremental acquisitions of smaller companies.

 

The government also wants to provide greater clarity to the Act’s anti-competitive conduct provisions. Its aim is to increase certainty as to what constitutes anti-competitive collusion – in turn, appeasing concerns that typically deter businesses from engaging in beneficial collaboration.

 

Commerce Commission: The review will also evaluate the commission’s structure and governance – specifically, whether it is capable of effectively enforcing competition laws. The introduction of specific commissioners and a divisional model to contribute to accountability and strategy will also be considered.

 

The government’s focus on strengthening competition laws aims to deliver greater choice, lower costs and increase productivity for all New Zealanders.

 

 

Reform of overseas investment laws to boost economic growth

The Overseas Investment Act 2005 will undergo significant reform, the government has announced. New Zealand is currently ranked the most restrictive country in the OECD for overseas investment.[1] The reform intends to combat this position by increasing openness to foreign investment that should attract more international investors.

 

To achieve what the government believes will be a more dynamic and competitive economic environment, a suite of statutory changes have been proposed to reduce barriers to investment where such investment does not present any identified risk to New Zealand’s interests. Key proposed changes include:

  • Fast tracking approvals: simplifying the assessment process by establishing basic tests and assuming investment will be permitted unless risks are flagged
  • Targeted scrutiny: retaining flexibility to analyse investments on a case-by-case basis and impose conditions or block them if necessary, and
  • Retaining current scope: ensuring the government can continue to scrutinise sensitive investments, including farmland.

 

Legislation to implement these changes is expected to be introduced this year.

 

 

Tax changes for charities

Charities can expect to see a raft of tax changes in May. These changes are intended to reduce the scope for exploitation of loopholes in the current framework. In other words, the government wants to ensure that entities receiving tax benefits are distributing their funds for charitable purposes – as opposed to structuring themselves as charities and building up funds that are not being used for charitable purposes.

 

This review will focus on charities that operate commercial businesses and whether they should pay tax on profits retained in the business. When announcing the changes, the Minister of Finance, Nicola Willis, mentioned that entities such as cereal manufacturer Sanitarium and early childhood education provider BestStart are among the types of organisations potentially impacted by the changes.

 

This removal of tax-free status is to be balanced against the need to support charities and to recognise the significant role New Zealand charities play in our communities. As a result, some charities may lose certain tax benefits.

 

These changes are part of a broader tax policy work programme that also includes exploring user-pays models for infrastructure projects and other revenue raising measures. The changes aim to ensure fairness while maintaining vital support for the charitable sector.

 

 

[1] BusinessNZ, 6 September 2024. https://businessnz.org.nz/wp-content/uploads/2024/09/240906-A-future-for-Foreign-Direct-Investment-into-NZ.pdf

 

 

 

DISCLAIMER: All the information published in Commercial eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Commercial eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650