By Bernard Hickey
Justice Minister Amy Adams has delayed the introduction of legislation to extend tougher Anti-Money-Laundering (AML) rules to real estate agents, accountants and lawyers until early 2017 because she is concerned about extra compliance costs being passed on to "average Mums and Dads."
Adams told Parliament the Government was still on track to pass the legislation by the middle of next year, but had decided against introducing the legislation this year because it wanted to ensure compliance costs were not too high.
The comments follow accusations from Labour Finance Spokesman Grant Robertson that the Government had quietly put the legislative process on hold last week after lobbying from the real estate industry. (Here's Robertson questioning Adams in Parliament on Tuesday afternoon).
Adams told reporters in Parliament that the legislation could be passed by the middle of next year, even if was not introduced this year.
"I've said all the way along it's our intention to have the legislation passed by the middle of next year, and that hasn't changed," Adams said.
Adams said she had not had any correspondence or met with real estate agents.
"I am sure that they will have concerns about how this will affect them," she said.
"I have said all along this is a regime that brings with it significant compliance costs on new sectors, but that is what it is, and we are working to get the legislation in place within the timetable that the Prime Minister and I set out some months ago."
Asked if there had been a debate in a cabinet sub-committee that had delayed initial plans to table the legislation this year, she said: "There has been no slowdown to that date of having the legislation passed by the middle of next year, so we are working through very carefully how it applies and making it sure it is the right balance of ensuring the protection of our sector and not imposing unnecessary compliance cost, but at no stage have we moved from having to have it passed by the middle of next year."
Adams also would not comment on Robertson's claim the Government was looking at not forcing buyers to identify themselves.
"All of those details will be subject to the announcements in due course," she said.
Directly asked if the Government would have legislation in Parliament by the end of this year, she said: "We haven't made those decisions yet. I'll make announcements in due course."
She denied it would be necessary to table legislation this year to ensure the passing of legislation by mid-2017.
"You can move it through the House in the time frame that we think is necessary. We want to have it place by the middle of next year. That hasn't changed. What we are working through at the moment is all of the details of formalising and finalising that policy and we'll make more announcements in due course."
She later told Parliament (in the video above) that the introduction of the legislation would now be delayed to next year.
"There are far reaching implications for a large number of New Zealanders from these reforms. The timeframe that we've been consistently working towards is to have the bill passed by mid 2017 and this hasn't changed. However, introduction of the bill may now occur early next year to ensure that we do what we can to minimise the cost of the reforms to New Zealanders," she said.
"This is a regime that will have considerable compliance costs on ordinary New Zealanders and on this side of the house we want to ensure that those costs are no more burdensome on average Mums and Dads than they need to be."
'Caving to special interests'
Earlier, Robertson said the Government had again 'caved' to special interests and shelved the legislation.
“When the heat was on National earlier this year in the wake of the Panama Papers, John Key committed his government to fast-tracking legislation to widen the groups covered by anti-money laundering provisions. But now with public attention elsewhere he has quietly slammed on the brakes, and it now looks like there will be no change in the rules before the next election," Robertson said.
“It seems that once again National is putting their interests ahead of New Zealand’s. As happened with earlier attempts to tighten the rules on the foreign trust industry that were scuttled by people like John Key’s lawyer, industry insiders are putting pressure on the government to back-off or water down proposals," he said.
The Government decided earlier this year not to accept John Shewan's recommendation that the round 2 of the AML laws be put into force by the end of this year.
“The time for talking here is over. We need action to ensure we eliminate New Zealand as a destination for corrupt money and play our part in the international efforts to fight corruption and terrorism."
The Ministry of Justice said in its consultation paper in August (submissions have now closed) that it expected legislation to be introduced before the end of this year. See Gareth Vaughan's article here.
The Government delayed the consideration of round 2 of the AML reforms for two years between 2014 and early 2016, before the Panama Papers publicity forced it to put the reforms back on track. See more here from Adams and John Key on May 31 on the Government's plans to accelerate the reforms in the wake of the Panama Papers publicity. Round one of the reforms applying to banks and fund managers were introduced in 2013.
(Updated with confirmation of delayed introduction of legislation in Parliament)