Whole of government direction regarding the New Zealand Business Number

Transcription

1 Whole of government direction regarding the New Zealand Business Number Report of the Commerce Committee Contents Recommendation 2 Introduction and background 2 The New Zealand Business Number 2 The nature of this direction 3 Comment 4 New Zealand Labour Party comment 4 New Zealand First comment 5 Appendix 6

2 Whole of government direction regarding the New Zealand Business Number Recommendation The Commerce Committee has examined a whole of government direction regarding the New Zealand Business Number and recommends that the House take note of its report. Introduction and background This direction would support a whole of government approach to implementing the New Zealand Business Number (NZBN). The NZBN forms part of the Better Public Services for business (Result 9) programme, which seeks to improve efficiency and reduce the cost of interactions between businesses and the Government. The direction would ensure that the benefits of the NZBN are achieved by setting out requirements for specific Crown entities to implement the NZBN within certain timeframes. Background about whole of government directions Section 107 of the Crown Entities Act 2004 allows the Minister of State Services and the Minister of Finance to jointly direct Crown entities to comply with specified requirements in order to support a whole of government approach. 1 Directions may be used for the following purposes: to improve public services (either directly or indirectly) to secure economies or efficiencies to develop expertise and capability to ensure business continuity to manage risks to the Government s financial position. Previous directions have been used in 2008 to support a whole of government approach for shared authentication services and, in 2014, for procurement, ICT, and property functional leadership. The New Zealand Business Number The NZBN is a unique identifier for New Zealand businesses to use in all interactions with the Government and each other. It aims to replace, over time, many of the separate identifiers currently in use. As more businesses choose to use the NZBN, the more value it will have for businesses already using it. All companies in New Zealand have been allocated an NZBN. The New Zealand Business Number Act 2016 extended the NZBN from companies to other entities. 1 Amendments made in 2013 to the Crown Entities Act widened the range of purposes for which whole of government directions could be made, and allowed the Government to be more selective about the entities to which a direction applies. 2

3 This committee examined the New Zealand Business Number Bill before it was enacted in April 2016, and unanimously recommended that it be passed. In our commentary on the bill we noted that the NZBN s efficacy depended on its widespread adoption by government agencies. Without this, the NZBN would be in danger of increasing businesses overheads rather than minimizing them. We noted that government directions regarding agency uptake of the NZBN were expected. In a minority view on the bill, the New Zealand Labour Party expressed concerns that there was no clear plan for how the bill s stated purposes would be achieved, and that eligible entities would incur an unjustified increase in cost as a result. It suggested that existing IRD numbers should instead be adopted as a universal number, and that the initial list of government departments be extended to include local government. The two main concerns we considered during the select committee process were the bill s privacy implications and the scope of its regulation-making powers. After consulting the Privacy Commissioner and the Regulations Review Committee, we recommended certain amendments to ensure that the legislation s privacy safeguards and regulation-making powers were appropriate. The nature of this direction This direction seeks to drive broad uptake of the NZBN across the public sector, which is critical for the benefits of the NZBN to be achieved. The benefits include cost savings to businesses and to government agencies, as well as improved business efficiency. The direction sets out requirements for agencies to implement the NZBN. It differentiates between agencies that businesses tend to have frequent interactions with in the course of a year (known as Result 9, or R9, agencies), and others. The benefits to business of full implementation of the NZBN by R9 agencies have been estimated at $60 million per annum. The direction takes a tiered approach, specifying which agencies must give effect to, or simply have regard to, various aspects of using the NZBN. It also sets out timeframes for when agencies must meet each of the requirements. For example, R9 agencies must incorporate the NZBN into their key business-facing systems by the end of 2017, while other Crown entities must do so by the end of The direction requires all agencies subject to the direction to report on implementation progress in their annual reports. In developing the direction, the Ministers of Finance, Economic Development, and State Services consulted 185 agencies (32 government departments and 153 Crown entities). Both oral and written feedback were considered as part of the consultation process. All agencies were supportive of the intent and goals of the NZBN. Most were comfortable with the requirements, but signalled that lack of additional funding for NZBN implementation was a challenge, especially for some requirements. As a result of the consultation process, the direction was amended to require only R9 agencies to give effect to some (Category B) requirements. Other agencies are required only to have regard to Category B, as the cost of applying these requirements to a wider range of agencies outweighs the expected benefits at this time. To avoid wasted investment, the direction does not apply to agency systems that are planned to be retired or replaced in the next three years, provided that any replacement systems comply with the direction. 3

4 Comment We accept that a whole of government direction is the appropriate method for broad uptake of the NZBN, as it gives agencies certainty about their obligations and clarity about timing. We support the proposed direction in view of the benefits likely to be gained from implementation of the NZBN across the public sector. We are pleased to note that the form of the direction incorporates amendments based on extensive consultation with Crown entities during its development. We consider that the tiered approach provides appropriate flexibility to accommodate entities differing circumstances. We are satisfied that the proposal meets the legislated criteria for the issuance of whole of government directions, and would not impinge on Crown entities statutorily independent functions. We note that the direction must be reviewed after five years. New Zealand Labour Party comment Labour supports the whole of government direction but notes with disappointment the Government s ongoing failure to furnish rhetoric with reality at a desirable pace. The approach chosen stops short of regulation, smacks of embarrassingly modest aspirations and sets out no meaningful tests or consequences for ignoring Government preferences. Despite agreeing with the Government s stated desire to make businesses and other eligible entities interaction with government easier and cheaper, Labour does not believe the Government has put itself in a position to deliver on this promise. We were therefore only able to offer qualified support for the related NZBN bill. Labour remains concerned that the Government still has not outlined a convincing plan for how the NZBN bill s stated purposes will be achieved, namely subclauses 3(a) and (b) enable eligible entities in New Zealand to interact more easily with government and reduce transaction costs in New Zealand. The Labour Party shares the concern expressed by Federated Farmers when they submitted on the original bill: that the initial list of government departments affected by the bill did not include agencies such as Worksafe NZ and Immigration NZ. Federated Farmers helpfully suggested swift extension of the number to local government, acknowledging that many businesses have more interaction with local government than central government. We also shared the Chartered Accountants Australia and New Zealand s concern that the benefits for business may be overstated without prompt and broad integration by government agencies. The original departmental Regulatory Impact Statement stated that without significant uptake there is a risk that the identifier is not integrated and utilised widely, and just becomes another number, rather than a replacement for the many current identifiers as it intended. Only a limited number of government departments have committed to the initial roll-out of the NZBN. Consequently in the only part of the plan outlined in detail to date, it is clear that businesses that deal with those departments will be required to obtain another number without achieving the benefits that would accrue from having one number for all of their central government interactions. The whole of government direction requires only three agencies to give effect to the NZBN by the end of next year, and then only partially. Fully 33 departments are required only to give partial effect by the end of 2018, and a further 30 agencies are exempt from 4

5 any strict requirement to give effect to the key purposes of the NZBN whatsoever. The original vision has been watered down to the extent that the Labour Party now wonders whether this Government itself believes in the value to business of the cause it has promoted. New Zealand First comment The proposed directions on the implementation of the NZBN for specified Crown entities, to be given as a whole of government direction under section 107 of the Crown Entities Act This recommends that Cabinet endorses the text scope of these directions, and notes the Ministers of Finance and State Services intend to issue them. This will provide an equivalent directive to specified government departments. Cabinet will endorse the text scope of the directive and agreeance to it being issued to specified departments via a Cabinet Circular. NZ First opposed this bill. NZ First opposes this whole of government direction. 5

6 Appendix Committee procedure The committee met between 9 and 16 June 2016 to consider the whole of government direction. We received advice from the Ministry of Business, Innovation and Employment, the State Services Commission, and The Treasury. Committee members Melissa Lee (Chairperson) Kanwaljit Singh Bakshi Ria Bond Dr David Clark Hon David Cunliffe Clare Curran Brett Hudson Gareth Hughes Alfred Ngaro Simon O Connor 6