Source: New Zealand Parliament – Hansard
CHAIRPERSON (Barbara Kuriger): I’m going to call Hon Dr Deborah Russell. I’m looking for new content now, because I’m aware that we’ve been on this part for probably almost two hours, and we’ve got several more parts to come, which will also be relevant. But I’m going to take one more call and I’m listening for very new.
Hon Dr DEBORAH RUSSELL (Labour): OK. Thank you, Madam Chair. You know, this is the examination we have of this extremely important bill in lieu of having had a select committee stage. There is a series of questions here that we could have dug into at select committee and we still need to have a think about them here.
I want to refer to something the Minister said last night and some more information about that which I haven’t covered yet coming out of the regulatory impact statement. Now, last night I questioned the Minister about the lead times that payroll providers needed in order to get these tax threshold changes in place in time for people to actually get the money in their pay packets. I pointed out that Inland Revenue itself said, in the regulatory impact statement, that payroll providers really needed to have a three-month lead time. Now, from 30 May to 31 July, when these changes come in, is two months. So I checked with the Minister. I said, “That doesn’t seem like a very long time and they actually need three months.” He pointed out that the regulatory impact statement was dated on 24 April, and in that time, between when the regulatory impact statement came out and the Budget itself, there had been some ongoing consultation with payroll providers to ensure that they’d be able to get the changes in place. So they were pretty sure that they could meet that two-months lead time.
CHAIRPERSON (Barbara Kuriger): Is there a new question in this?
Hon Dr DEBORAH RUSSELL: Yep, there is a question coming right now. The Minister was sure about this. So I want to ask the Minister: can he guarantee that every employee will get the tax threshold changes in their pay packet in their first pay after 31 July? He said that they had consulted payroll, so I want to know: can he guarantee that? So that’s the first question.
I want to carry on because there’s some more information in the regulatory impact statement that we haven’t covered yet. I want to draw the Minister’s attention to paragraphs 49, 50, and 51 of the regulatory impact statement, which have not been discussed yet. Now, we discussed some of the large Government organisations in terms of their payrolls for their employees. But paragraphs 49, 50, and 51 point out that some large Government organisations have a whole set of other people to whom they are directing payments that are subject to income tax, and, in particular, payments made by the Ministry of Social Development (MSD) to beneficiaries, payments made by ACC under the compensation system and payments made by the Ministry of Health. Now, we’re talking lead times for payroll providers, and in paragraph 51, there are very specific numbers about how long each of those organisations think they need. So to make the necessary IT changes to ensure that people get that money in their back pocket, in their first pay, after 31 July—and that’s what the Minister has told us he can do—ACC—
Tim Costley: You don’t want them to get the money.
Hon Dr DEBORAH RUSSELL: —take a call—says that it needs eight to 13 weeks. So, OK, ACC is going to fit within that lead time or maybe the earlier lead time. MSD says that they need about three months from the Cabinet decision. Now, I’m taking it that the Cabinet decision would have been made on 1 May, that’s the first Cabinet after the regulatory impact statement. But here’s the cracker: Health New Zealand says it needs four months—it needs four months from the date of the Cabinet decision. Big workforce there, and that’s what Health New Zealand said.
So the Minister has put in place some changes to tax thresholds and he said that he’s confident based on the consultation with payroll providers that it can be done for employees, but then, sitting in the regulatory impact statement for Health New Zealand, one of the largest employers in this country is the very clear information that they need approximately four months from the date of the Cabinet decision, and that’s only if they get told about it in advance of the Budget. It happens because we’ve got to get that sort of thing sorted. Now, the date of the Cabinet decision was 1 May, at the earliest—so 1 June, 1 July, 1 August, 1 September. When are those people employed by Health New Zealand going to see the impact of these tax threshold changes in their pay packets?
Now, the Minister has been absolutely confident that it can be delivered. I would like that guarantee that every employee will see the impact of the tax threshold changes after 31 July—in their first pay packet after 31 July. He was confident last night—[Time expired]
