Fixed-life resource consents

Clause 124

Issue: Support for the proposal

Submission

(Corporate Taxpayers Group, New Zealand Institute of Chartered Accountants)

The submitters expressed their overall support for the addition of resource consents granted under section 15A and 15B of the Resource Management Act 1991 (RMA) to schedule 14 of the Act. This makes expenditure on these resource consents depreciable.

Comment

Officials note the general support for the proposed amendments.

Recommendation

That the submissions be noted.

Issue: Other fixed-life resource consents

Submission

(Corporate Taxpayers Group, New Zealand Institute of Chartered Accountants)

Submitters noted that there are other fixed-life resource consents granted under section 9 of the RMA relating to restrictions on the use of land that are not currently depreciable. To the extent that these consents have a finite life, they should be included within schedule 14 of the Act and be depreciable.

Comment

Officials would welcome further evidence on fixed-life resource consents granted under section 9 of the RMA in order to assess the scope of the issue. Our approach is to consider black hole expenditure issues on a case-by-case basis.

The addition of resource consents granted under section 9 of the RMA would be more complex than the current proposed changes envisage. Schedule 14 of the Act lists items of depreciable intangible property, and while the Act has a definition of “depreciable intangible property” that requires the property to have an estimable, finite useful life, this criterion is overruled by the inclusion of the property in schedule 14. This prevents the addition of resource consents granted under section 9 of the RMA to schedule 14 because then all section 9 resource consents would be depreciable, whether the consent period is finite or perpetual.

Recommendation

That the submission be declined.