+64 7 872 0236 [email protected]

Government & Policy

Health and Safety at Work Amendment Bill

Employment Law, Government & Policy, Health and Safety, Regulatory Compliance, Risk Management, Workplace Regulation
0

Expected to be enacted in the spring

The Health and Safety at Work Amendment Bill was introduced into Parliament on 8 February 2026 and passed its first reading on 12 February 2026. It is currently before the Education and Workforce Select Committee. Submissions closed at the end of March and the committee is scheduled to report back to Parliament by 12 June 2026. It is anticipated that the Bill will be passed before the election (early November).

If enacted, the Bill will represent the most significant reform of health and safety law in New Zealand since the Health and Safety at Work Act (HSWA) was passed in 2015.

 

Purpose of Bill

Workplace Relations and Safety Minister, the Hon Brooke van Velden, said that the Bill is intended to reduce compliance obligations, focus on preventing serious harm and clarify businesses’ obligations under the HSWA.[1] The key proposed changes in the Bill are:

  • Increased focus on preventing serious harm
  • Reducing compliance obligations for small businesses
  • Clarification of the health and safety obligations of landowners, and
  • Clarification of the relationship between health and safety legislation, and other legal requirements.

 

Introducing ‘critical risk’

The Bill introduces a new defined term of ‘critical risk.’ Small businesses must focus on avoiding critical risks. All other businesses must manage all risks but are required to ‘prioritise’ critical risks.

The Bill defines a ‘critical risk’ as a risk associated with one of the matters specified in Schedule 1A of the Bill; this lists a number of specific high-risk activities such as working with asbestos and other hazardous substances. A critical risk also includes any hazard that is likely to result in death, a notifiable injury or illness, a notifiable incident or an occupational disease listed in Schedule 2 of the Accident Compensation Act 2001.

Identifying what the critical risks are for a particular business is likely to be one of the more challenging aspects of the new legislation.

 

The impact on small to medium-sized businesses

The most significant change contained in the Bill is the narrowing of the duties of small to medium-sized businesses, referred to as ‘small PCBUs,’ to risks that are defined as critical risks under the Act.

This does not mean that small businesses have no obligations in relation to other risks. They are still required to provide adequate facilities to ensure the safety of their employees.

A small PCBU will be defined as a business with fewer than 20 employees. Businesses that have a fluctuating workforce will qualify provided that they have fewer than 20 employees for at least nine months of the year. This change is likely to have a significant impact on the compliance obligations of businesses in New Zealand, given that approximately 97% of businesses would qualify as a small PCBU.[1]

 

Obligations of landowners and recreational activities

Potential exposure to prosecution under health and safety legislation in New Zealand has long been a concern for landowners who wish to make their land available for recreational activities.

In the past, this has been a particular concern for rural landowners who have often avoided providing access to their land due to such concerns. It has also discouraged public landowners, such as schools and councils, from allowing their land to be used for recreational activities.

The potential liability of landowners was recently highlighted by the prosecution of the owner of Whakaari/White Island following the eruption in 2019, which resulted in the deaths of 22 people. The landowner was initially convicted in the District Court under the HSWA, despite not directly operating the tours to the island.[2] The High Court overturned this conviction on appeal.[3]

The passing of the Bill would mean that landowners would not generally owe health and safety obligations to people using their land for recreational activities.

 

The Health and Safety at Work Act and other legislation

The Bill would clarify the relationship between general health and safety legislation, and other legislation that applies to specific industries such as the aviation and maritime sectors.

In the past, there has been confusion as to whether or not businesses in industries covered by specific legislation have additional duties under the HSWA. The Bill clarifies that compliance with industry-specific legislation or approved industry codes of practice is also compliance with the HSWA, so there are no additional obligations.

The Bill also states that the owners of earthquake-prone buildings do not need to take additional steps under the HSWA, provided that they comply with the requirements of the Building Act 2004.

The Bill is intended to reduce the compliance work that is required by businesses under current health and safety legislation, which has become an expensive ’tick-box’ exercise for many. However, it will still be important for small businesses to identify the ‘critical risks’ in their businesses and to take steps to mitigate them.

If you have any concerns about the impact that this proposed legislation may have on your business, please don’t hesitate to contact us.

 

[1] New Zealand business demography statistics at February 2025, Statistics New Zealand.

[2] WorkSafe New Zealand v Whakaari Management Ltd [2023] NZDC 4149.

[3] Whakaari Management Ltd v WorkSafe New Zealand [2025] NZHC 288.

 

 

DISCLAIMER: All the information published in Commerical 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 Commerical eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Content Copyright © NZ LAW Limited, 2026.    Editor: Adrienne Olsen.       E-mail: [email protected]      Ph: 029 286 3650

Budget 2026

Government & Policy, Infrastructure & Development, Public Sector, Social Welfare Law, Wealth & Retirement Planning
0

Securing New Zealand’s future says the Minister of Finance

Despite pre-Budget announcements for the health, education and defence sectors, this Budget certainly contained some meaty content.

The government’s broader approach could therefore be characterised as a ‘meat and veg now, dessert later’ strategy to economic management.

With a net operating package of an average $2.146 billion pa ($8.272 billion over the next four years), the health sector is a major winner, followed by education (including tertiary), defence and intelligence, law and order, etc totaling new expenditure of $14.666 billion over the next four years.

On the other side of the coin, the Minister has anticipated savings of $6.394 billion over the next four years, making the net package of spending of $8.272 billion over the same period.

 

Health

  • A $5.5 billion increase in funding for frontline health services
  • Funding for three-day postnatal stays ($34 million) and $16 million allocated to specialist paediatric palliative care
  • Pharmac has additional funding ($54 million) to buy more medicines
  • $682 million for capital investment includes a new tower block for Whangārei Hospital, redevelopment at Palmerston North and Hawke’s Bay Regional Hospitals, and
  • Funding to lower the eligibility age for free bowel screening from 58 years to 56 years; benefitting 200,000 Kiwis.

 

Education

The government’s aim is to lift student achievement in schools. The cancellation of the final year fees-free initiative will help fund preparing young people for trades and other vocational education. The main points are:

  • $131 million to help students meet standards for the three Rs (reading, writing and arithmetic)
  • Supporting the refreshed curriculum and new national qualifications implementation
  • Continuing the Healthy School Lunches Programme
  • Doubling the number of trades academy places providing free trades training for year 11-13 students, and
  • Around 230 new classrooms will be built, and there is a funding increase for school property maintenance and daily operations.

 

Defence and foreign affairs

  • Increased funding to retain current defence force staff levels, as well as increasing numbers in key areas
  • $110 million for international development cooperation, with particular focus on the Pacific, and
  • More funding to enable aircraft, ships (including keeping our two Anzac-class frigates ship-shape) and land forces to continue to operate.

 

Social housing and welfare

  • Increasing the accommodation supplement for people in private rentals, and increasing income-related rents for people in social housing
  • Funding for up to 2,250 additional social houses
  • More case management help to support solo parents into work, and
  • $45 million for extended community food support and children’s breakfast programmes.

 

Infrastructure

The government acknowledges that New Zealand’s current infrastructure must not only be maintained, but also expanded through new investment.

  • The construction of the Cambridge to Piarere Expressway
  • Renewing and upgrading the rail network, particularly in Auckland and Wellington
  • Financial incentives to councils to encourage housing growth
  • Investment in hospitals, schools, courthouses, police stations and defence assets, and
  • Funding to drive the reforms to the resource management system.

These investments are in addition to previously approved current and pipeline projects.

 

Law and order

The government’s focus is to reduce crime and keep New Zealanders safe. Proposals include:

  • $503 million for frontline Corrections services
  • More support ($50 million) for frontline policing
  • Funding to reform the firearms safety system, and
  • $21 million for Customs to combat drug smuggling and transnational crime.

 

Fuel response

New Zealand is currently facing unprecedented pressure on its energy supplies resulting from the hostilities in the Middle East. The government will introduce:

  • A $50/week increase to the In-Work Tax Credit for up to a year to help working families with increased fuel costs
  • Funding for additional strategic fuel reserves to firm-up the country’s fuel resilience, if required
  • A temporary increase in mileage rates for support workers and people travelling for specialist treatment
  • Additional funding for Fire and Emergency, Corrections, Policy, Customs and Education to maintain frontline activities during this period, as well as
  • A $450 million contingency fund for future fuel-related costs.

Energy security is now top-of-mind in this current uncertain fuel climate. The government proposes:

  • Capital investment in Genesis Energy to accelerate the development of new generation and firming capacity, and
  • A new loan guarantee scheme to support businesses to transition away from the use of gas.

 

Public service

The proposed cuts to the public service have already been announced, and the reception has been mixed. The government wants to see improved productivity and greater efficiency to reprioritise frontline services while reducing the public service headcount.

 

Other initiatives include:

  • $200 million will be raised by a new tax on banks to help cover Reserve Bank costs
  • Rules will be changed to tax loans made by companies to shareholders that remain outstanding six months after the company is removed from the Companies Register
  • Stricter regulations for charities: a limit of $100,000 has been set for people claiming tax deductions for making charitable donations
  • More funding to control the dratted wilding pines
  • $184 million for Oranga Tamariki to protect and support children
  • Fringe Benefit Tax rules for private motor vehicles will be simplified
  • Making the SuperGold Card an official form of ID, and
  • Funding for new technology to improve our emergency management system.

 

NZ Superannuation

A vexed topic for any political party. Although not covered in the Budget, with the ballooning costs of National Super (projected to be $31.2 billion in 2030), all recent governments have grappled with future funding. Raising the age of entitlement, albeit slowly, and means testing are only two of the many measures proposed to alleviate the pressures on government funds. It is clear that the funding of NZ Super is a major issue and will need to be strongly addressed in the near future.

Overall the government hopes the Budget funding will lead to an increased GDP and a healthier economic environment.

To read the Budget in more detail, click here for the Minister’s Budget speech. The Treasury’s website, click here, is also very helpful.

If you would like to discuss more about the government’s proposals, please don’t hesitate to contact us.

 

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.
Content Copyright © NZ LAW Limited, 2026.    Editor: Adrienne Olsen.       E-mail: [email protected]      Ph: 029 286 3650

Over the fence

Employment Law, Government & Policy, Rural & Agricultural Law, Succession Planning, Trusts & Asset Planning, Wills & Estates
0

Biosecurity overhaul

In July 2025, the Ministry of Primary Industries released its proposed ‘Biosecurity System Action Plan.’ It is intended to guide new legislation to amend the Biosecurity Act 1993, and to overhaul current biosecurity regimes to improve process, obligations and rights. This will impact importing/exporting, practices on farm and government accessibility to farms.

The action plan is presented in two tranches. The first focuses on immediate priorities – clarifying roles, modernising processes and providing training tools. The second tranche will build on successful initiatives, consider social and cultural impacts and develop long term resolutions. Significant progress on both tranches by 2030 is proposed.

Key proposed amendments following submissions and consultation include:

  • Placing greater decision-making discretion with regional councils and management agencies – including the ability to create exemptions, issue permits for pests and produce small scale management plans
  • Increasing and introducing new penalties, including for obstructing a lawful search
  • The ability to grant one-off or ad hoc permits for imported goods, and
  • Removing the need for the current exemption for regional councils to enter private land to manage pests.

A draft bill is anticipated to be presented to Parliament in late 2026.

To read more on the Biosecurity System Action Plan, the steering group workshops and the proposed next steps, click here.

 

Employee v contractor

On 21 February 2026, a new ‘gateway test’ was introduced to determine whether an individual is an employee or a contractor in terms of employment law. The gateway test does not apply retrospectively.

Gateway test: An individual is a contractor if they meet all the gateway test criteria. These are:

  • There must be a written agreement stating they are an independent contractor or are not an employee
  • No restriction from working for others (except while undertaking agreed work)
  • They are not required to work at a specified time/period OR they can subcontract the work, subject to legally required or justifiable vetting
  • Additional future work can be declined without the arrangement being terminated, and
  • There has been a reasonable opportunity to seek independent advice before entering into the arrangement.

If all criteria are satisfied, the individual is a contractor. If any of the criteria is not met or for claims brought prior to 21 February 2026 the common law test (below) applies.

The four factors below are considered together to determine whether an individual is a contractor:

  1. Intention – what did the parties intend the relationship to be? Consider entitlements received – for example, contractors are not entitled to holiday pay.
  2. Control v independence – high employer control over hours, work and methods may be indicative of an employer/employee relationship
  3. Integration – is the role fundamental to an employer’s business and continuous in nature, and
  4. Fundamental/economic reality – does the economic reality reflect a person in business on their own account? Consider fee structure, tax obligations, ability for the individual to profit and who bears financial risk.

The distinction between an employee and contractor is highly relevant for the rural sector as you may have both contractors (such as sharemilkers and contract milkers) and employees (farm hands, managers, etc) working on your property.

 

Wills and EPAs: essential for rural sector

For people who are responsible for farms and other major assets, it is important to ensure you have a current will and Enduring Powers of Attorney (EPAs). If you don’t have these and you die unexpectedly, lose mental capacity, or are unable to attend to your personal affairs for a period, it could lead to not only farming operations being disrupted, but also family uncertainty and having to spend time and money on sorting things out.

Will: Your will sets out your instructions about the distribution of your property to your family after you die. Even if you have a will, it is good practice to regularly review it, so it reflects your current situation and wishes.

If you don’t have a will, there is legislation[1] that decides how your estate is divided up; this arrangement may not be what you would wish. To prevent this, it’s optimal (and much easier) to ensure you have a valid will that reflects your wishes. Your family will thank you for it.

EPA: An EPA is a legal document that allows a trusted person (your attorney) to manage your affairs and personal care. There are two forms of EPA – one covering property affairs and the other about your personal wellbeing. An EPA for personal care only applies if you lose mental capacity, while an EPA for property can also apply while you have capacity.

For a property EPA, your attorney could be a trusted friend or relative, or you could appoint a trustee company to manage your property matters.

For a personal care and welfare EPA, you can only appoint a person as your attorney.

We can help you set up EPAs and a will or, if you already have them, review them so they reflect your current situation.

[1] Administration Act 1969.

 

 

DISCLAIMER: All the information published in Rural 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 Rural eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Content Copyright © NZ LAW Limited, 2026.    Editor: Adrienne Olsen.       E-mail: [email protected]      Ph: 029 286 3650

KiwiSaver changes open the door to first farm ownership

Banking & Finance, Government & Policy, Property Law, Rural & Agricultural Law, Wealth & Retirement Planning
0

Good news for rural workers

The government has announced important changes to KiwiSaver that will make it easier for farmers and rural workers to use their KiwiSaver to buy their first farm. These reforms acknowledge the unique way in which farms are owned and operated in New Zealand.

For many in the rural sector, particularly sharemilkers, contract milkers and farm managers eager to climb the property ladder, this represents a meaningful step toward farm ownership.

Legislation giving effect to these changes will be introduced to Parliament in the middle of the year.

 

Key changes

Until now, KiwiSaver first-home withdrawals have been limited to residential property purchases, with strict requirements that the buyer both owns and lives in the home. This has created barriers for those pursuing farm ownership, as farms are often:

  • Purchased through companies or trusts, rather than in an individual’s name, and
  • Used as both a business and a place of residence, sometimes with accommodation arrangements tied to employment.

The upcoming changes are designed to address these challenges by allowing eligible KiwiSaver members to withdraw their funds to buy a first farm, even where the ownership structure is more complex.

 

Who can benefit?

The updated rules will apply to people who would ordinarily qualify for KiwiSaver first-home withdrawal, who have contributed to KiwiSaver for at least three years and not previously owned a home (or being approved as a ‘second chance’ buyer). The changes are aimed at first-time farm buyers, not those expanding existing farming operations.

 

Key conditions

While the rules are becoming more flexible, there are still some important conditions for first-time farm buyers:

  • Control of the farm: You must have a meaningful ownership interest in the entity purchasing the farm (for example, a majority shareholding or controlling interest). This ensures KiwiSaver is being used to support genuine ownership, not passive investment
  • Connection to the property: The farm must still have a residential element connected to you. While the strict ‘live in the home’ rule is being relaxed, the purchase must still align with the intent of helping you secure your primary place of living and working
  • First property focus: The withdrawal remains limited to your first property purchase (or equivalent approved situation), and
  • Standard application process: You will still need to apply through your KiwiSaver provider, providing supporting documents such as a signed sale and purchase agreement and statutory declarations.

 

Why this matters for farmers

For many in the dairy and wider farming sector, progressing from employment or sharemilking into ownership has always required significant capital. KiwiSaver is often one of the few accumulated assets available to younger farmers. By allowing KiwiSaver funds to be used in farm purchases — and recognising company and trust structures – the law is now better aligned with how farming businesses actually operate.

This change is expected to improve access to deposits for first-time farm buyers, support succession planning within the rural sector and help younger farmers transition into ownership earlier.

 

Considerations before proceeding

While the changes are positive, there is still some complexity involved. Before relying on KiwiSaver funds for a farm purchase, it is important to consider:

  • How the farm purchase will be legally structured
  • Whether your level of ownership meets the control requirements
  • The impact on lending and finance arrangements, and
  • Ensuring your application meets your KiwiSaver provider’s requirements.

We recommend you seek legal and financial advice early in the process; this will help ensure everything is set up correctly from the outset.

 

Final thoughts

These reforms mark a practical and long-overdue shift in KiwiSaver policy. By acknowledging that farms are both homes and businesses, the government will create a more realistic pathway for rural New Zealanders to enter farm ownership.

With the changes in the legislative pipeline, if you are considering farm ownership, now is a good time to start planning and take advice on how best to position yourself.

 

 

DISCLAIMER: All the information published in Rural 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 Rural eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Content Copyright © NZ LAW Limited, 2026.    Editor: Adrienne Olsen.       E-mail: [email protected]      Ph: 029 286 3650

New Zealand Superannuation beneficiaries

Elder Law, Government & Policy, Government Policy, Immigration & Travel, Social Welfare Law, Wealth & Retirement Planning
0

New Zealand Superannuation beneficiaries

 

Overseas travel

Getting ready for a trip overseas, and suddenly the burden of your NZ Super benefit weighs on your mind? Many wonder how their island getaway or their skiing holiday will impact their payments.

Travel is split into three distinct categories by the Ministry of Social Development (MSD) so the length of your overseas adventure becomes important.

 

Travelling overseas for 26 weeks or less

If you are travelling for less than 26 weeks, and you are only receiving New Zealand Superannuation (NZ Super) or a Veteran’s Pension, you do not need to notify MSD. You will continue to receive these payments while you are away.

If you receive other payments such as an accommodation supplement or disability allowance, however, you must contact MSD. You may still be eligible for these payments for up to 28 days while you are away. However, you will need to be careful when travelling for long periods. If your trip lasts more than 30 weeks, you may have to pay back the full 26 weeks of payment you received. This all depends on whether your delay is expected or unexpected.

 

Travelling overseas for more than 26 weeks

If you are travelling for more than 26 weeks, you may still be able to receive NZ Super or Veteran’s Pension payments. This section applies to those who still intend to keep New Zealand as their place of residence; it involves an application being made at least six weeks before you leave New Zealand. The assessment covers various aspects including things like time spent living in New Zealand between the ages of 20 and 65. Any other payments you receive will cease when you begin your travel.

 

Living overseas

If you are intending to move overseas, you may be happy to know that this does not immediately mean you will stop receiving your NZ Super or Veteran’s Pension payments. In this situation, you must also apply at least six weeks in advance of your departure from New Zealand. How much ongoing NZ Super or Veteran’s Pension you receive will depend on similar assessment criteria to travel longer than 26 weeks (see above), as well as the country you are moving to and its relationship with New Zealand. For example, New Zealand has transferable arrangements with 22 Pacific countries.

The last thing you want to worry about when away on holiday is your NZ Super. Rest assured, if it is only a short trip, you need not worry; if it is a long sojourn, a touch of preparation may alleviate your stress.

For the specifics of applications and further detail around other payments and arrangements relating to your overseas journey, Work and Income New Zealand’s website www.workandincome.govt.nz is very helpful or contact them on 0800 552 002.

 

Contacting the Office of the Privacy Commissioner

The Office of the Privacy Commission (OPC) has changed how it responds to enquiries.

Until recently, the OPC had operated a bespoke service with a dedicated email address and 0800 number to ask privacy questions. Many of those queries could have been answered by looking at their website or their contacting the organisation’s privacy officer.

With a massive increase in enquiries, the OPC has changed how New Zealanders can contact it.

The email address ([email protected]) is no longer operational and any emails sent to that address are not answered.

The 0800 803 909 number remains. From 1 May 2026, an automated message will give callers a suite of options to choose from, rather than a personalised response.

The OPC’s website can help answer privacy questions, including outlining your privacy rights.

Privacy breach notification: There are no changes to the way to contact the OPC of a notifiable privacy breach. The online NotifyUs reporting tool is unchanged and will help you assess the seriousness of the privacy breach.

 

DISCLAIMER: All the information published in Fineprint 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 Fineprint may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2025.     Editor: Adrienne Olsen.       E-mail: [email protected]     Ph: 029 286 3650 

Taxing the business income of charities

Charities & Not-for-Profits, Government & Policy, Regulatory Compliance, Taxation, Trusts & Legal Governance
0

Inland Revenue proposal unlikely to proceed

In February 2025, Inland Revenue issued a paper entitled ‘Taxation and the not-for-profit sector’ (the Issues Paper).

Among other things, the Issues Paper proposed taxing the business income of charities, where that income did not relate to their charitable purposes. This was highly controversial and resulted in a flurry of submissions.

 

Charities in New Zealand

Section 5 of the Charities Act 2005 defines ‘charitable purpose’ as including ‘every charitable purpose, whether it relates to the relief of poverty, the advancement of education or religion, or any other matter beneficial to the community.’

From time to time, public debate arises over organisations that have been granted charitable status, particularly where that status is seen as controversial. For example, Greenpeace has gained and lost charitable status a number of times, and Family First has had charitable status declined by the Supreme Court. After serious allegations of abuse and law-breaking, Gloriavale’s charitable status is under review.

One charity in New Zealand has been controversial for some years. Sanitarium, the company that makes Weet-bix and other breakfast cereals, is owned by the Seventh-day Adventist Church.

As a general rule, where a charity owns a business, and receives business profits, tax does not need to be paid on those profits, because they are being distributed to a charity which can only use them for charitable purposes. This tax exemption was closely scrutinized by Inland Revenue in the Issues Paper.

 

Taxing business income

The Issues Paper suggested that businesses owned or operated by charities have certain competitive advantages over non-charitable businesses. These businesses:

  • Can accumulate funds without paying tax, and therefore invest in and grow their businesses faster, and
  • May not face the same compliance costs as tax-paying businesses.

This led to Inland Revenue’s proposal to tax charities’ business profits where they were not related to the charitable activities in question.

The charitable sector argued that it would be very difficult to identify what business activities were related to furthering a charitable purpose and what activities were unconnected.

The Salvation Army’s thrift stores might remain untaxed, but what about Sanitarium’s production of healthy breakfast cereals?  Sanitarium might argue that it provides free healthy breakfasts in more than 1,400 schools as part of the overall charitable endeavours of the Seventh-day Adventist Church. (It might also make the point that John Kellogg invented cornflakes in the late 1800s because he believed that eating bland breakfast cereals facilitated godly morality.)

More specific counterarguments were also made in submissions. Charities said that they faced a number of competitive ‘disadvantages’ which for-profit businesses did not face; these include a limited ability to raise finance and differences in their ability to claim imputation credits. Any advantages their businesses might enjoy were offset by disadvantages.

Submissions also said that where business profits were taxed and then distributed to the charity which owned the business, they would always have to be used for charitable purposes, and a tax credit would need to be given to the charity in due course. It was argued that it would be time-consuming and costly (for both the charities and Inland Revenue) to make a tax payment and later receive a credit in respect of the same funds.

A number of charities also said that they face much greater compliance costs than small businesses. They have, for example, much more stringent audit requirements; if the law changed, there might need to be an income threshold whereby small charities are exempted from having to distinguish between types of income earned.

Sue Barker, a well-known tax and charities lawyer, said that the Issues Paper did not start by asking the fundamental question of whether there is a problem in the charitable sector regarding the payment of business income tax? If charities are misusing funds and not using them for charitable purposes, this would justify more scrutiny over charitable activities and perhaps better enforcement of existing laws, but it would not justify a law change.

 

Government response

Recently, Revenue Minister, Simon Watts confirmed that Inland Revenue is unlikely to pursue the proposal to tax charities’ business income. He suggested that there might be more scrutiny over the way charities use funds to ensure that existing laws are being followed, and there may be changes yet to come regarding ‘donor controlled’ charities, including rules about minimum distributions which must be made each year.

Charities seem to agree that better enforcement of existing laws is preferable to more law changes. The not-for-profit sector has already responded to considerable change in recent years; charitable trusts were impacted by the Trusts Act 2019, and incorporated societies have been significantly affected by substantial law changes under the Incorporated Societies Act 2022.

The most common criticism of New Zealand law relating to charities seems to be that ‘advancement of religion’ qualifies as a charitable purpose, even where the religion (or a popular figure associated with it) has a questionable reputation. There are, however, no current proposals to review that aspect of the law.

 

DISCLAIMER: All the information published in Trust 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 Trust eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2026.     Editor: Adrienne Olsen.       E-mail: [email protected]      Ph: 029 286 3650

 

New Zealand’s methane reset

Agriculture & Farming, AgricultureNZ, Climate Change & Environment, Economic Impacts, Government & Policy, Sustainability & Emissions
0

In October 2025, the government confirmed it will reset New Zealand’s biogenic methane target for 2050; it will move from the legislated 24–47% below 2017 levels, to a 14–24% range, while keeping the 10% cut by 2030 and the net-zero target for long-lived gases.

Ministers framed the change as aligning the law with the ‘no additional warming’ approach and recent science. Legislation amending the Climate Change Response Act 2002 (CCRA) is expected before the end of the year.

 

Who is happy?

The farming sector welcomed the change as a return to what it called ‘realistic’ targets that recognise methane’s short-lived nature. It follows the government’s earlier decision to scrap the He Waka Eke Noa pricing pathway and to remove agriculture from the Emissions Trading Scheme. Farmers believe the lower range reduces existential pressure on farming businesses and allows focus on practical mitigations (breeding, inhibitors, feed tech, etc) instead of a levy.

 

But who is not pleased?

Climate scientists and environmental organisations criticised the reset as a retreat from ambition. The Climate Change Commission had advised tightening the 2050 methane cut to 35–47%, not weakening it, to keep New Zealand on a consistent path of 1.5°C, being the global climate goal of limiting average warming as set out in the 2015 Paris Agreement.

Critics also worry the government is leaning on the ‘no additional warming’ framing to justify slower cuts, which they say risks higher cumulative warming and undermines international credibility. Pacific climate officials also voiced disappointment, stressing regional vulnerability to warming-driven sea-level rise.

Economic ramifications

In the short term, the reset eases compliance and cost uncertainty for the primary sector, New Zealand’s largest export engine, by removing an impending farm-level price and lowering the statutory target trajectory. It is supportive for farm profitability and investment confidence, especially amid tight margins and volatile commodity prices.

In the medium term, however, risk shifts to market access and brand value: key customers and trade partners such as supermarkets, financiers and governments increasingly require demonstrable progress on agricultural emissions. If the reset is perceived as backsliding, exporters could face stricter private sector standards or sustainability premiums that erode any domestic cost advantage.

The government points to increased funding for agricultural research and development, and on-farm tools to deliver reductions without pricing. However, the scale and pace of deployment will determine whether exporters can defend ‘green’ credentials in premium markets.

Legal and policy implications

Resetting the methane target requires amendment of the CCRA; it will then cascade into the emissions budgets and sector strategies. The government has also flagged wider CCRA changes (eg: industrial allocation processes and a framework for recognising non-forestry carbon removals), which could rebalance where abatement comes from across the economy.

The reset crystallises a familiar conflict in New Zealand politics – rural stability versus climate ambition. For the governing Coalition, the move bolsters rural support and answers long-standing grievances about ‘unscientific’ targets and levies.

For Opposition parties and many climate advocates, the reset is symptomatic of a retreat from climate leadership, handing them a clear attack line with urban and youth voters. Internationally, lowering the target while relying on ‘no additional warming’ accounting invites scrutiny just as New Zealand positions itself in trade-and-sustainability forums through to 2030–35.

The electoral stakes are therefore not only regional, but also reputational. Whether the government can prove real-world methane reductions, via technology and practice change, fast enough to neutralise claims of backsliding will likely feature in the next campaign cycle.

Bottom line

The methane reset reduces immediate regulatory heat on farmers but raises the bar on delivery; without a price, the credibility of New Zealand’s climate stance now hinges on measurable, short-term cuts from innovation and extension on farm. Whether that happens quickly enough will shape export earnings, legal settings and the next election’s climate battleground.

 

 

DISCLAIMER: All the information published in Rural 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 Rural eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2025.     Editor: Adrienne Olsen.       E-mail: [email protected]      Ph: 029 286 3650

Get in touch today, we’d love to talk.

+64 7 872 0236 [email protected]