Potential for Unintended Legislative Changes

When reporting back the Income Tax Act 2004 in December 2003, the Finance and Expenditure Committee (FEC) identified that unintended changes in interpretation of the law (unintended legislative change) may arise from the difference in language between the old and new Acts, notwithstanding the best efforts of the drafters to avoid this.

It should be noted that, while the same term "unintended legislative change" is used to describe any situation where the Panel considers that there has been an unintended change in the law, there will be a range of reasons for the change. It may not be due to a drafting error, but rather may be due to the old law and the new law being clearly drafted in the same way but that way not reflecting practice on the interpretation of the old law. Alternatively, it may be due to ambiguity or uncertainty in the drafting of the old law which necessarily had to be resolved to achieve drafting clarity in the new law but which resolution is found not to reflect practice.

A formal process was called for to identify such interpretational issues and refer them to the Government for consideration.

Upon identification of an unintended change, the Government will decide whether to:

• promote an amendment to reinstate or modify the meaning of the pre-existing law, or
• retain the unintended change in the legislation.

The FEC proposed the appointment of an independent committee to review submissions regarding any differences between the two Acts and to recommend appropriate action.  The Rewrite Advisory Panel was invited to take on this role.

The Rewrite Advisory Panel is chaired by David McLay with representatives from the New Zealand Institute of Chartered Accountants (NZICA), the New Zealand Law Society (NZLS), Treasury and Inland Revenue.

In 2007 the Panel was invited to consider potential unintended changes arising under the ITA 2007.