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Taxation (Budget Measures) Bill (Consistent) (Sections 14, 19(1)) [2024] NZBORARp 39 (17 May 2024)
Last Updated: 31 May 2024
![2024_3900.jpg](2024_3900.jpg)
17 May 2024
LEGAL ADVICE
LPA 01 01 24
Hon Paul Goldsmith, Acting Attorney-General
Consistency with the New Zealand Bill of Rights Act 1990: Taxation (Budget
Measures) Bill
Purpose
- We
have considered whether the Taxation (Budget Measures) Bill (the Bill) is
consistent with the rights and freedoms affirmed in the
New Zealand Bill of
Rights Act 1990 (the Bill of Rights Act).
- We
have not yet received a final version of the Bill. This advice has been prepared
in relation to the latest version of the Bill
(IRD 26202/6.0). We will provide
you with further advice if the final version includes amendments that affect the
conclusions in
this advice.
- We
have concluded that the Bill appears to be consistent with the rights and
freedoms affirmed in the Bill of Rights Act. In reaching
that conclusion, we
have considered the consistency of the Bill with section 14 (freedom of
expression) and section 19 (freedom from
discrimination). Our analysis is set
out below.
The Bill
- The
Bill provides for tax measures included in Budget 2024. The measures aim to help
reduce the cost-of-living pressures for New Zealanders
by providing tax relief
and additional support to low and middle-income individuals and families. The
Bill:
- provides
tax relief to individuals by adjusting the personal income tax thresholds and
expanding eligibility for the independent earner
tax credit (IETC);
- provides
support to low and middle-income families by increasing the in-work tax credit
(IWTC) base rate and the minimum family tax
credit (MFTC)
threshold;
- gives
effect to the FamilyBoost tax credit, which will support families with the cost
of early childhood education;
- makes
changes to the calculation of the base interest rate for student loans; and
- enables
Inland Revenue to address certain administrative errors on applications for the
Research and Development Tax Incentive.
- The
Bill gives effect to these changes by amending the Income Tax Act 2007, the Tax
Administration Act 1994, and the Student Loan
Scheme Act
2011.
Consistency of the Bill with the Bill of Rights Act Section 14 – Freedom
of expression
- Section
14 of the Bill of Rights Act affirms that everyone has the right to freedom
of
expression, including the freedom to seek, receive,
and impart information and opinions
of any kind and in any form. The right has been interpreted as including the
right not to be compelled to say certain things or to
provide certain
information.1
- The
Bill enables a person who is entitled to a FamilyBoost tax credit for a quarter
to apply for a refund of that credit. New s 41C(3)
of the Tax Administration Act
1994 (clause 18 of the Bill) requires the applicant to complete an application
in the manner specified
by the Commissioner and accompanied by the information
required by the Commissioner. This provision may be considered to limit section
14 of the Bill of Rights Act.
- A
provision which limits a protected right or freedom may be consistent with the
Bill of Rights Act if the limitation is reasonable
and justifiable in a free and
democratic society under section 5 of that Act. The section 5 inquiry may be
approached as follows:
- Does
the provision serve an objective sufficiently important to justify some
limitation of the right or freedom?
- If
so, then:
- Is
the limit rationally connected with the objective?
- Does
the limit impair the right or freedom no more than is reasonably necessary for
sufficient achievement of the objective?
- Is
the limit in due proportion to the importance of the
objective?2
- We
consider any limit on the right to be justified. The provision serves the
important objective of supporting families with the cost
of early childhood
education and arises only in respect of people eligible for the refund who opt
to apply for it. A requirement
to provide the Commissioner with specified
information on a quarterly basis is rationally connected with that objective and
appears
a reasonable and proportionate way of achieving
it.
Section 19 – Freedom from discrimination
- Section
19(1) of the Bill of Rights Act affirms the right to freedom from discrimination
on the grounds set out in the Human Rights
Act 1993 (the Human Rights Act).
- Two
factors must be met for discrimination to be identified under section 19(1) of
the Bill of Rights Act:3
- there
is a differential treatment or effect as between persons or groups in analogous
or comparable situations on the basis of a prohibited
ground of discrimination;
and
- that
treatment has a discriminatory impact (i.e., it imposes a material disadvantage
on the person or group differentiated against).
- Differential
treatment will arise if the legislation treats two comparable groups of people
differently on one or more of the prohibited
grounds of discrimination.
Whether
- See,
for example, Slaight Communications v Davidson 59 DLR (4th) 416;
Wooley v Maynard [1977] USSC 59; 430 US 705
(1977).
2 Hansen v R
[2007] NZSC 7, [2007] 3 NZLR 1.
- Ministry
of Health v Atkinson [2012] NZCA 184, [2012] 3 NZLR 456 CA at [55]; Child
Poverty Action Group Inc v Attorney-General [2013] NZCA 402, [2013] 3 NZLR
729.
disadvantage arises is a factual
determination.4 The prohibited grounds of
discrimination include marital status.
- New
subpart MH of the Income Tax Act 2007 provides for the FamilyBoost tax credit to
provide financial assistance to caregivers with
early childhood education costs.
Under new section MH 3(5), if a person entitled to a FamilyBoost tax credit has
a partner, that
partner is not also entitled to a FamilyBoost tax credit,
regardless of whether the childcare costs are incurred by both the person
and
their partner. However, this does not apply where a person is separated from
their partner and does not have a new partner. This
may result in partnered
people gaining less financial benefit from the policy than separated or single
persons. This gives rise to
prima facie discrimination on the grounds of marital
status.
- Taxation
and social assistance legislation necessarily targets limited government
assistance to certain groups of people and may draw
distinctions on various
prohibited grounds of discrimination. Achieving a fair distribution of financial
and social assistance to
those most in need is a complex social policy matter,
and some latitude is generally given to the legislature to achieve its
objectives.
Moses J in R (on the application of Hooper) v Secretary of State
for Work & Pensioners stated:5
In
determining how to target resources to those in need, the legislature is
entitled to impose ‘bright line’ rules which
are easy to apply and
which may not focus with precision on the merits of individual cases... such
bright line rules in the context
of social and economic policy do not lead to
incompatibility [in that case, with the European Convention on Human Rights]
even if
individual hardship is occasioned...
- The
FamilyBoost tax credit is rationally connected to the important objective of
reducing cost-of-living pressures for New Zealanders.
We consider it is
reasonable to assume that partners gain some financial benefit from being
partnered and therefore for the policy
to treat couples and separated persons
differently.
- Having
regard to the degree of deference that is appropriate when dealing with complex
social policy issues, we consider the Bill
appears to be consistent with the
right to be free from discrimination affirmed in s 19(1) of the Bill of Rights
Act.
Conclusion
- We
have concluded that the Bill appears to be consistent with the rights and
freedoms affirmed in the Bill of Rights Act.
![2024_3901.jpg](2024_3901.jpg)
Edrick Child
Acting Chief Legal Counsel Office of Legal Counsel
- See,
for example McAlister v Air New Zealand [2009] NZSC 78, [2010] 1 NZLR 153
at [40] per Elias CJ, Blanchard and Wilson JJ.
- R
(on the application of Hooper) v Secretary of State for Work & Pensions
[2002] EWHC 191 at [115] as referred to in Howard v Attorney-General
(2008) 8 HRNZ 378 at [76] – [77].
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