Hive News Wednesday: Decks being cleared ahead of new Cabinet on Sunday; AML draft rolled out

Bill English on his way to his first question time as Prime Minister following John Key's resignation. Copyright Lynn Grieveson / Hive News

The sound of decks being cleared could be heard all over Wellington yesterday as ministers about to leave or shift announced policy changes and tweaks before Bill English names the new cabinet this Sunday.

There is always the usual end-of-year announcements to be made, but they came in a rush yesterday as English signalled the new Cabinet, which he has yet to decide, would be sworn in next Tuesday.

The announcements ranged across the ministries and regulators, but were of most interest to the legal, financial and real estate industries.

Amy Adams published the exposure draft of new anti-money laundering laws, which were accelerated in the immediate wake of the Panama Papers drama, having been decelerated in the previous two years because of concerns they would cost too much for lawyers, real estate agents and accountants.

Adams stuck to her post-Panama Papers timetable of passing the legislation for this second round of AML reforms by the middle of next year. The new law will see the tougher rules around identifying purchasers of houses, art and jewellery and the money used in the purchases extended from banks and fund managers to the real estate, accountancy, legal, art dealing, jewellery and betting professions.

John Shewan argued in his Panama Papers report this second round should be brought in by the end of this year, but the timetable revealed yesterday showed that some parts of the reforms may not apply until as late as 2019.

Lawyers and conveyancers will have to comply 6 months after Parliament passes the Bill, while accountants will have 12 months, real estate agents will have 18 months, the Racing Board will have 18 months and jewellers and art dealers will have 24 months.

Adams cited an Ernst and Young report on the issue which estimated the compliance costs at NZ$1.6 billion over 10 years, but that the reforms had the potential to disrupt up to NZ$1.7 billion in fraud and drug crime over the next decade. EY also estimated the reforms could prevent up to NZ$5 billion in broader criminal activity and reduce about NZ$800 million in social harm related to the illegal drug trade.

In other economic and financial news...

Almost a year after concerns about 'ghost students' were raised in Parliament via David Cunliffe and a Tertiary Education Commission Inquiry was launched, Steven Joyce yesterday appointed a Crown Manager to Tai Poutini Polytechnic on the West Coast of the South Island. Joyce cited a request from Chairman Graeme McNally over the Polytechnic's financial position and its educational "delivery and processes."

In the wake of complaints about how EQC dealt with claims in the Canterbury earthquakes, Gerry Brownlee announced an agreement between EQC and insurers that means insurers will act as private agents for the EQC and assess and process claims directly, rather than through the current two-step process. "The intention of this agreement is to reduce the double handling of claims and to speed up settlements for earthquake-affected customers," Brownlee said.

Paul Goldsmith announced all KiwiSaver annual statements would have to declare total fees paid in dollar amounts, but not until 2018 because banks had asked for more time to upgrade their systems. Simplicity's Sam Stubbs said bank lobbying had stopped the information being provided for another two years. "Sadly the banks have pulled the wool over the Minister’s eyes with their claim that they need to make system changes, at a cost of $1m to disclose these amounts," Stubbs said.

Motu's Arthur Grimes and Richard Fabling published a paper showing the rollout of Ultrafast Broadband had yet to improve productivity by itself.

In other political news...

Sam Lotu-liga said he would not stand again at the next election, clearing one more position for Bill English to fill in his first ministry to be named on Sunday and sworn in on Tuesday.

Bill English faced an aggressive series of Opposition questions on child poverty and Pike River in his first Question Time as Prime Minister. English rejected calls for the Government to set a child poverty target and said the 2014 figures cited in yesterday's Child Poverty report did not reflect changes over the last two years to benefits and free doctors' visits for under 13s.

David Shearer gave his valedictory speech. "I have not been in Government, I was not in Cabinet, and I did not even get to be Prime Minister. As the song goes: “Regrets, I’ve had a few.” But the goal is always to leave maybe with a few regrets but without bitterness," he said.

Tweet of the day:

Claire Trevett:

Pity the PM's protection squad who've gone from holidays in Maui to holidays in Dipton.

Number of the day:

NZ$2,300 a week - The amount being paid by MSD to an Auckland motel to house a family on its waiting list, as reported by RNZ.

Parliamentary exchange of the day:

Andrew Little: After 8 years of rising child poverty on his watch, will he sign up to Andrew Becroft's target of reducing child poverty by 10 percent in the next year and take immediate steps to get there, or are we going to continue to hear empty words, just like we did from his predecessor?

Bill English: Since 2012 we have published a set of quite focused targets aimed at dealing with the social dysfunction that traps families in the combination of welfare dependency, criminal recidivism, low education levels, and child abuse. The data about that is more detailed and more transparent than in pretty much any other developed country, and the Government is acting on that information—in many cases, family by family, because that is the only way to change their lives. Signing up to a target does not change their lives.

Have a great day.

cheers

Bernard