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Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill — First Reading

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Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill

First Reading

Hon MAURICE WILLIAMSON (Minister of Customs) : I move, That the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill be now read a first time. At the appropriate time I intend to move that the bill be considered by the very good Justice and Electoral Committee, that the committee report finally to the House on or before 9 December 2010, and that the committee have the authority to meet at any time when the House is sitting except during oral questions, during an evening on a day in which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 187 and 191(b) and (c).

The bill is an omnibus bill that amends both the Customs and Excise Act 1996 and the Biosecurity Act 1993. The bill makes important improvements that are required to support the sharing of information across border sector agencies. These amendments will ensure that the Customs Service and the Ministry of Agriculture and Forestry meet the Government’s priorities in relation to the delivery of the joint border management system and support effective collaboration at the border. The bill also provides for improvements in the effectiveness of customs law enforcement. These amendments will restore the level of effectiveness to the administrative penalty and the petty offence schemes that was intended when the Customs and Excise Bill was passed way back in 1996. Finally, the bill addresses emerging customs and border management issues, and provides clarity to existing legislative provisions to improve administration of the Customs and Excise Act.

Let me take members through the purpose of the bill. The bill contains three categories of amendments: first, amendments to provide for planned information-sharing by the Customs Service with the Ministry of Agriculture and Forestry and across a range of other border agencies; second, amendments to enhance the effectiveness of customs law enforcement mechanisms; and, thirdly, nine smaller amendments to clarify provisions within the Customs and Excise Act. I will take the House through those three provisions. The identification and management of border risks requires information to be accessed and shared by border agencies. The Government has recently agreed to $70 million funding for a joint border management system that will provide the Customs Service and the Ministry of Agriculture and Forestry access to collaborated information needed to identify risks at our border. The joint border management system is due to be tendered, and system development will begin in early 2011.

The current statutory provisions for information sharing allows for information to be shared, but only on a case by case basis. This is not sufficient any more to cover the quantity of information and the process for information sharing between the Customs Service and the Ministry of Agriculture and Forestry. This bill contains amendments to the Customs and Excise Act and the Biosecurity Act that are necessary to support shared access to information by the Customs Service and the Ministry of Agriculture and Forestry under the new joint border management system. The amendments also provide a legal framework to support the interim information-sharing projects between the Customs Service and the Ministry of Agriculture and Forestry until the joint border management system is fully established. Further, customs involves a number of centres that operate jointly with staff from different agencies across the whole gamut, from the Customs Service, the Ministry of Agriculture and Forestry, immigration, police, defence, and other agencies. These centres provide a mechanism for sharing staff and intelligence to ensure that risks are identified and effectively managed.

The existing statutory provisions relating to such information sharing are, of course, unnecessarily complex. Given the Customs Service’s range of agency interrelationships and connections, amendments in the bill establish an information-sharing framework that will enable the service to manage access to, and sharing of, border information by relevant agencies. The service’s assessment of risk relies heavily on the quality and accuracy of the information provided by importers. The administrative penalty scheme that operates under the Customs and Excise Act is no longer providing a sufficient incentive for compliance by the importing community. The existing provisions relating to the petty offences regime are very limited in their scope and reflect the circumstances that applied when that Act was originally passed back in 1996. The Customs Service has identified amendments to restore the level of effectiveness intended when these schemes commence.

The second set of amendments will strengthen the administration penalty regime, which will increase the minimum penalties to be applied as administrative penalties. The bill will also increase the maximum penalties that can be dealt with as administrative penalties, adapting the penalty regime to reflect the degree of culpability—because that is an important aspect to this—and to include in the estimation of revenue avoided the GST otherwise payable. Amendments will also extend the range of provisions that can be dealt with as minor offences under the petty offences regime. The bill also includes nine amendments that are required either to clarify existing provisions or address new situations that have emerged since the Act was passed in 1996. The amendments clarify licensing and excise liability requirements for biofuels and biofuel blends, and reduce compliance costs for low-volume producers.

The bill allows the use of reasonable force within certain customs-controlled areas to detain people or compel unauthorised persons to leave. It enables the Customs Service to prevent goods from entering New Zealand that have been designed, manufactured, or adapted to facilitate a crime of dishonesty—for example, eftpos card skimming machines that clearly were being brought in for a crime of dishonesty. The Customs Service was unable to stop that from happening. It creates—and this is my personal favourite—a specific offence for injuring or killing a customs dog, and brings it into line with police dog treatment. It enables goods that must be imported in multiple shipments to be managed as if they were a single shipment. It allows for the making of regulations to define the point at which an export entry is deemed to be made. It defines when a postal article has been produced or delivered to a customs officer. It provides a specific method for calculating the value of temporarily imported goods at the time of exportation.

The bill enhances customs law enforcement, which is essential to ensure that the Government can prevent the importing of drugs and precursors and other illegal activity at the border, and it contributes to the prosperity of our entire country. I commend the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill to the House.

SU’A WILLIAM SIO (Labour—Māngere) : The Customs Service is New Zealand’s front line to the world and it plays a significant role in facilitating international trade and tourism. Labour acknowledges that our border management environment involves a number of agencies that facilitate and control the flow of people and goods across our borders. We recognise that the Customs Service makes a significant contribution to border management and assists other agencies in meeting a range of objectives at the border. We agree that the challenge for the service is to maintain security of the border from risks and threats without compromising trade and travel facilitation standards. Labour notes that enhanced information technology and the joint border management information system may assist the service to process the transactions from increasing volumes of trade and travel. Labour believes that in order to effectively respond to increasing demands, Customs Service interventions need to be focused on people, goods, or crafts that are likely to present risks to New Zealand’s interests. We believe that those risks need to be identified as early as possible in the process. Labour supports the work of the Customs Service and its officers on the New Zealand border and will therefore support the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill’s referral to a select committee.

However, although Labour supports this bill’s referral to a select committee we do have concerns about privacy issues and issues of human rights and freedoms, which I will pose by way of asking the following questions. In regard to the joint border management information sharing, we ask what the guiding principles are of this system of information sharing. What specific information is collected, used, disseminated, or maintained in the system? What are the specific sources of information in the system? Will the public and stakeholders accept why the information is being collected, used, disseminated, or maintained? How will information be checked for accuracy? Who will check it for accuracy? How will the public have inaccurate or erroneous information corrected?

I give an example of a gentleman who lives in my electorate whose mother died not too long ago. He dropped everything, bought an airline ticket—one way with cash—and rushed to be with his family in Pakistan. After the funeral rites were all done, he bought a ticket—again with cash—and returned to Māngere. Upon his arrival he was detained at the airport and questioned for several hours. That was not the first time that it had happened to this gentleman, and he is not the only person to whom it has happened.

So there are questions about the validity of information that is collected, and about how an individual corrects erroneous and inaccurate information. What are the specific legal authorities, arrangements, and/or agreements that would define the collection of information between the border agencies involved? Given the amount and type of data collected, what will be the privacy risks, and how will these risks be mitigated? What types of tools will be used to analyse data, and what type of data may be produced? Will the system collect commercially-sensitive data; if so, how will commercially-sensitive data be used? What information is retained in the system, and for how long? What are the risks associated with the length of time that data is retained for, and how will those risks be mitigated?

Which border agencies is the information shared with, other than the Ministry of Agriculture and Forestry? What information is shared, and for what purpose? How will the information be transmitted or disclosed, and what are the privacy risks associated with each transmission or disclosure method? With which external organisations—and I say external to New Zealand border control agencies—is the information shared? What information is shared, and for what purpose? What security measures will safeguard the transmission of information?

Do individual persons have the opportunity or right to decline to provide information? Are the individuals from whom data is collected given notice before the collection of information? Do individuals have the right to consent to particular uses of the information; if so, how does the individual exercise that right?

What procedures will allow individuals to gain access to their information? What procedures will allow individuals to correct inaccurate or erroneous information? How will individuals be notified of the procedures for correcting their information? If no form of redress is provided, what alternatives are available to individuals?

What procedures will be in place to determine which users may access the system, and where will those procedures be documented? Will contractors have access to the system? How will we ensure that contractors use the system lawfully and legally?

What privacy training will be provided to users, either generally or specifically, relevant to the system, and how often? What auditing measures and technical safeguards will be in place to prevent the misuse of data?

What technology is being used for this system? Will the technology used in the joint border management system be future-proofed for new technological developments and future developments? Is it the Government’s intention to extend the joint border management information sharing from internal New Zealand border agencies to other nations within our surrounding region?

Labour believes that we need to ensure both that the Customs Service is able to take advantage of relevant technological developments to ensure the efficiency and effectiveness of customs’ operations, and to have the appropriate technology and intelligence capability to monitor them. It is Labour’s view that there are enough significant privacy considerations to warrant the Privacy Commissioner to participate in a statutory review of the provisions of the bill in 5 years’ time. We agree with those provisions, but we ask whether 5 years is too long.

I also say that sophisticated data-sharing software is a powerful tool, and it does not come cheap. We understand that the $75.9 million allocated in the 2010-11 Budget will pay for only the first part of a two-stage project. Industry sources estimate that the total cost could top $200 million. The Minister has conceded that the Government expects to cover at least some of the development cost, which has commenced with an expanded import transaction fee. From 1 July this year the Customs Service began applying an import transaction fee of $24.75—which is GST inclusive—to a range of personal imports that attract GST and import duty. Generally, the import transaction fee will apply to goods valued over $400, but at times packages valued at less than $400 will attract the fee. The fee will apply to all import items, such as jewellery, clothing, and electrical appliances. The Customs Service says that import transaction fees are applied to cover the time and costs associated with processing imports, and are used to fund border risk-management activities. Consumers who purchase goods from overseas over the Internet will be more likely to be caught by the fee.

Then there is the powerful data-matching tool itself, which is designed to hone in on suspicious passengers and freight at ports and airports. The system will be able to check for relationships between people who have previously been too obscure to have concerns raised about them. It will track all import and export transactions—personal movements across the border, criminal records, and family and romantic relationships. This is the reason why we have raised the fact that significant privacy considerations ought to be considered. I would be keen to hear from the Privacy Commissioner about the risk associated with that system, and about the way we mitigate any and all risks identified.

I would also be keen to hear from the general public, who have had good and bad experiences at our borders, about any concerns they may have. In addition, I think it will be important to hear from the agencies that may be directly affected by this bill, including those organisations whose interests may be affected by this legislation.

Although Labour supports this bill to go to its select committee consideration, and although some amendments are so-called minor amendments, we ask those questions because the real concerns my colleagues and I share are the issues about privacy. Those issues are the reason I have posed those questions. They are significant questions that, hopefully, the select committee process will be able to tease out and receive evidence upon from the general public out there. Thank you very much.

CHESTER BORROWS (National—Whanganui) : I rise to speak in support of the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill—which is handy, because it is the one we are debating at the moment. I look forward to this bill coming before the erudite and efficient Justice and Electoral Committee. I think it will be the 20th piece of legislation we will have had before our committee in this term, and we are only too pleased to help out the Minister of Customs in respect of this legislation.

The bill gathers together a number of relatively small amendments to allow for changes and trends in importation, and for other issues that have arisen in relatively recent times but that are not catered for within the current legislation. The amendments will clarify licensing and excise liability requirements for biofuels and biofuel blends. They will allow the use of reasonable force within certain Customs Service - controlled areas, in order to compel unauthorised persons to leave. They will enable the Customs Service to prevent goods from entering New Zealand that have been designed, manufactured, or adapted to facilitate a crime of dishonesty—for example, card skimmers. The amendments will create an offence of injuring or killing a Customs Service dog. They will enable goods that must be imported in multiple shipments to be managed as if they were a single shipment. The amendments will allow for the making of regulations to define the point at which an export entry is deemed to have been made, and will define when a postal article has been produced or delivered to a customs officer. They will also provide the specific method for calculating the value of temporarily imported goods at the time of exportation.

The bill paves the way for the future of border management in New Zealand, and it will ensure that the Government’s $70 million investment in new systems will deliver a real change for border management. The new joint border management system will bring Customs Service and MAF Biosecurity New Zealand processes together under the same system, to provide improved security and productivity at New Zealand borders.

Budget 2010 also provides $5.9 million to the Customs Service over the next 2 years to fight the illicit drugs trade through enhanced tracking and surveillance. Tools of this kind are vital in order to clamp down on criminal gangs and the methamphetamine trade. The Customs Service is already doing well, as the House knows, but this legislation will continue to help to give the service the conditions it needs to keep busting drug importers. The year 2008 was already a record year for intercepting the precursors to P, and 2009 surpassed 2008 by over 66 percent. The amount of precursors the Customs Service intercepted last year was enough to manufacture at least 246 kilograms of methamphetamine, thus saving an estimated $138.6 million of potential harm to our community.

I am pleased that this bill will receive support from across the House. I commend the bill to the House.

STUART NASH (Labour) : I rise in support of the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill at its first reading. I support this bill because the measures outlined are designed to protect our borders against threats and risks without compromising trade and travel standards. I would like to talk specifically about two separate areas in more detail. Firstly, I will talk about why this bill is important. Secondly, I will outline a couple of measures proposed in the bill.

We are a country surrounded by a large natural moat called the Pacific Ocean—15,000 kilometres of it, in fact. So everything that comes into New Zealand does so by sea or air. However, the challenges this brings are substantial—from both humans and pests, and sometimes human pests. The crooks are getting smarter, and rewards for illegal activity are getting larger and more and more tempting to certain undesirable sectors of the travelling populace. We need to keep up and fight against the scourge head-on with all the resources we can muster. We also need to act smarter.

This bill is important in this day and age as it recognises that there is a need for more effective and enhanced collaboration between agencies at the border, as well as a need for greater value for money by eliminating duplicated services. What I mean by this is that the Ministry of Agriculture and Forestry, the police, the Inland Revenue Department, and the Customs Service, etc., need to be linked in a way that avoids duplication whilst promoting efficiency and cooperation. It is nonsense that Government agencies cannot connect electronically in any way that provides a higher level of security and minimises the risk to the wonderful people of New Zealand at this point in time. So funding has been made available for the first stage of the joint border management system, which at this stage will be an integrated computerised system to provide border management services for the Customs Service and the Ministry of Agriculture and Forestry.

The reason why we are debating this bill is that legislation is required to implement the proposals that will, firstly, develop a legislative framework to oversee the future sharing of information between border activities and agencies. And let us face facts—there are some privacy concerns over this bill. When Government agencies have the ability to share information relating to all New Zealanders, we need to eliminate the perception that this is Big Brother in action. My colleague William Sio spoke at length on this about 10 minutes ago. The legislation will, secondly, enable the Customs Service to have overall stewardship and management of the integrated border management system, and hence mandate the operation of this system. Thirdly, it provides an interim legislative framework to support the immediate sharing of information for two short-term projects.

The amendments proposed in the bill have a range of objectives, and these include enhancing coordination between the Customs Service and other Government departments in reducing duplication of processes and enhancing risk management. I would like to outline the current situation and the basic, but not the only, problem this bill seeks to address. Information sharing between border agencies is currently governed by a complex web of law. The sharing of information is permitted by specific laws. These laws typically apply only to a narrow range of information or a narrow range of situations. Other exchanges are permitted on a case by case basis within a framework created by the interface between the Official Information Act and the Privacy Act. This is a complex and onerous process.

The efforts of the Customs Service in recent years to focus on greater collaboration with other agencies at the border have relied on these sets of laws and protocols. The existing provisions have allowed the Customs Service to develop good partnerships—great partnerships, in fact—with other agencies, but they have also highlighted the need for a simpler, clearer, and more transparent regime of more general application. I doubt that anyone would disagree with that.

What we are proposing here is to amend the Customs and Excise Act to provide for the making of regulations in future to specify agencies that can access information held by the Customs Service, including specific conditions on the use of the information by accessing agencies. For example, no one will be able to access information to check on a prospective neighbour or a daughter’s boyfriend. I make light of this, but privacy is a very important issue, and I will be very interested to read the submissions on this aspect of the bill if the House refers it to the Justice and Electoral Committee.

The reality is that the option of requiring law changes to be made to each specific information-sharing need identified is simply too onerous. This is due to the expected substantial delays caused by the lengthy legislative process and resource demand. This framework is the preferred option. It will have sufficient flexibility to deliver additional processes effectively in the future. It properly considers privacy interests that arise through requiring regulatory changes to be discussed with the Privacy Commissioner. It ensures ongoing parliamentary oversight through the Regulations Review Committee. This is an enabling provision that will have no initial impact on business. However, when regulations are made under this provision the impact on business will be considered as part of the regulatory change process.

I would like to briefly elaborate on the joint border management system. This management system is designed to achieve substantial benefits from automating information storage and sharing across the border sector. As mentioned, the current law for information sharing on a case by case basis is not sufficient in the 21st century to cover the quantity of information sharing between the Customs Service and the Ministry of Agriculture and Forestry.

The preferred option to address this issue is to amend the Act in order to, firstly, give the Customs Service overall stewardship and operation of the system; secondly, to mandate the accessing by the Customs Service of the information stored in the management system that will be allowed under the Act; and, thirdly, to mandate the accessing and use by the Ministry of Agriculture and Forestry of the information stored in the joint border management system that is allowed under the Biosecurity Act. This amendment is required to allow access to the common set of data required by the Customs Service and the Ministry of Agriculture and Forestry.

The proposed approach is a logical option to enable the Customs Service and the Ministry of Agriculture and Forestry to share this information without duplicating the collection process. This proposal is to enable the Ministry of Agriculture and Forestry to access potentially broader classes of information held by the Customs Service that the Ministry of Agriculture and Forestry requires to undertake its border management role as it transitions from 100 percent screening to risk management. The proposed management system and trade single window will allow traders and other commercial entities to enter information once, and that information will then be accessible by both the Ministry of Agriculture and Forestry and the Customs Service. This is common sense in this day and age. It is absolutely necessary if we are to protect our borders going forward. It will also reduce compliance costs to industry. It enhances the effectiveness of border agencies by reducing the costs of capturing and assessing information.

I have talked about why this bill is important. We need to work together, to work smarter, and to use the technology that exists to create a border protection system that will provide us with a very powerful tool in the battle to keep New Zealand and New Zealanders safe. I also spoke about the development of the joint border management system, which requires legislation for its implementation. We are supporting this because we believe that it is vital in the development of information sharing and for efficiency between the various Government agencies. It is only between the Ministry of Agriculture and Forestry and the Customs Service to start with. However, this is, hopefully, just the beginning of the networking of the system of government needed to protect our borders. Labour commends this bill to the House. Thank you.

TE URUROA FLAVELL (Māori Party—Waiariki) : Tēnā koe, Mr Assistant Speaker. Kia ora tātou katoa. I follow with a brief call from the Māori Party about our perspective on the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill at its first reading. As others have said, it aims to reduce administration costs and also to provide for planned information-sharing between the Customs Service and the Ministry of Agriculture and Forestry. Although a key focus of the proposed legislation is to establish a foundation for the joint border management system, our interest as the Māori Party is around the amendments to the Biosecurity Act 1993 to provide for such information-sharing.

The focus of biosecurity in the bill is one that the Māori Party has a particular interest in. We are aware that Māori participation in agriculture, forestry, and biosecurity has been identified as a Government priority. The Ministry of Agriculture and Forestry’s statement of intent for 2009-2012 identifies two immediate outcomes that reflect this priority. It says that enhanced prosperity for Māori engaged in agriculture, food, and forestry is important, and that prevention and reduction of harm to resources of economic and cultural value to Māori from pests and diseases are also crucial. We want to ensure that due thought has gone into the protection of Māori, biologically-based, economic resources from pests and diseases and that they are given due consideration. Māori are kaitiaki and owners of land and resources; therefore, we have a vested interest in protecting our taonga from imported pests and diseases for future generations.

We note that just over a month ago MAF Biosecurity New Zealand joined forces with local iwi to clear all of the visible sea squirt Pyura from the Bluff at Ninety Mile Beach and Whareana Bay. This development was a very positive project that demonstrated the opportunity for iwi to lead the long-term management of pest incursions, while at the same time raising local awareness of the biosecurity issues and preparing communities ahead of any future marine biosecurity events. In this context, we would appreciate learning how in this bill iwi can expect to be involved in the potential information-sharing undertaken between the Customs Service and the Ministry of Agriculture and Forestry, and to contribute and participate at the local level.

We note, further, that another intention of the bill is to provide “a power to define, through regulations, border information that may be shared between agencies at the border, and any conditions that might reasonably be imposed on such sharing.” Again, we would be interested in understanding how Māori might be involved in decision making about the criteria and protocols for information sharing between specified border agencies.

Finally, we look forward to hearing thoughts of the Minister of Customs about legislating for Māori involvement so that this is not a discretionary consideration for the ministry, but ensures that due consideration is given to all these critical issues at stake. We will be supporting this bill at its first reading.

SIMON BRIDGES (National—Tauranga) : I look forward to the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill coming to the Justice and Electoral Committee so that we can really dig into the detail of it. I can tell from my brief perusal of it that it is a practical bill and one that will make a difference in this area. Obviously, Minister Williamson has done a lot of work on it to date. In my brief perusal of the bill I can see that it makes clear that we can have the best systems in the world, but if one State agency is not talking to the other one, so that one hand does not know what the other hand is up to, it is a complete waste of time. This bill does something about that.

This Government has invested $70 million in new systems and in border management. That is a lot of money and it is money well spent, I might add. This is a very, very important area in crime fighting—in all manner of crimes. We are talking about the importation of potentially very dangerous biosecurity risks and of drugs, and the like. We know that in the past our borders have been a weak link. There was $70 million well spent, but my point is that even with all that money being spent on the best systems in the world, it is pointless if the agencies are not working together. This bill fine-tunes and puts in place the processes and the right results so that the Ministry of Agriculture and Forestry and the Customs Service are working together, are on the same page, and are using the systems appropriately, in a collaborative manner.

As I said, I look forward to this bill coming to the Justice and Electoral Committee, and I look forward to getting into the detail. We will all work together on what I am sure is a non-contentious bill, and on making the customs area work better for all New Zealanders.

Hon DAMIEN O’CONNOR (Labour) : When I was reading through the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill—unlike the previous speaker, Simon Bridges, who clearly has not—and looking at the notes, I thought that anyone who wanted to refer to the detail would probably be as excited as someone sitting down and watching paint dry. For the most part, the changes brought in by this bill are quite technical. Most people would see them as logical and sensible. Indeed, that is why the Labour Opposition will be supporting the bill.

But the bill does do a couple of other little things. Well, maybe the Government thinks they are little things, but they are actually quite significant. It brings in a new tax. This is from the party that said it would cut taxes. From 1 July the New Zealand Customs Service began applying an import transaction fee of $24.75 to a range of personal imports. I can remember when I came back from Australia at the end of the 1970s, or it might have been at the start of the 1980s, and I brought a few presents for my family. I remember being absolutely terrified because I did not know the exact value of them and I did not know whether I would have to pay a fee at customs when I came into the country. I think this bill might reintroduce such a tax. If people sit down and read through this bill, they will see that generally the import transaction fee will apply to goods valued at over $400 but at times packages valued at less than $400 will attract a fee. Has the Government been up front about this? No, it has not. This is a new tax. People who go to Australia for a holiday and buy something worth around $400 might end up paying an import transaction fee when they come back into the country. I thought we had finished with all of that bureaucracy, but, no, the National Government seems intent on reintroducing it. I trust the Justice and Electoral Committee to address that. I ask Mr Bridges whether he picked up on that fact.

Simon Bridges: Oh yeah.

Hon DAMIEN O’CONNOR: I ask Mr Bridges whether he has told the good people of Tauranga that when all of the blue-rinse brigade up there take their little trips to Australia in winter, they will be paying this fee when they come back. We will leave that for the select committee.

As my learned colleagues have said, the Customs Service has a very, very important role in New Zealand. We are an island nation; everyone who comes here comes here by sea or plane. Very few come by any other means; there are no submarines, there is no swimming—

Chris Hipkins: Some row.

Hon DAMIEN O’CONNOR: The odd person, yes, and we have to acknowledge the odd person who kayaks. We acknowledge that huge task.

The first Kiwi people meet when they arrive in New Zealand is often a customs person. They could have come on Air New Zealand, in which case their contact with New Zealand would have started when they hopped on the plane—not after going through customs in Los Angeles, we hope. Their experience should be a positive one when they hop on an Air New Zealand plane or arrive at one of our airports. It is really important that our customs staff are well resourced, competent, and friendly, because they are the face of this country. They are the first point of contact. For the most part they do an exceptional job. So the alignment of information between agencies is sensible. In fact, most people would ask why we have not been doing it before now. The complex web of legislation we have has been hindered by privacy provisions and all the rest of it. This bill addresses those issues, and that is great. So Labour will support it.

But a number of issues will have to be addressed, such as the import transaction fee, which is clearly laid out in the bill. National members have refused to acknowledge it, but—

Paul Quinn: What clause?

Hon DAMIEN O’CONNOR: Oh, Mr Quinn has not read the bill, either. Perhaps Mr Quinn should pick up the bill, go through it, and read it. I ask whether he will be on the select committee. No, but Mr Bridges will be.

I tell the House that the most significant part of this bill is a little reference to the removal of customs and excise on people who generate and produce their own biofuel. The Government may laugh at that. It has overlooked it. It made brief mention of it; the Minister of Customs did mention it once. It is the only visionary part of this whole piece of legislation. Labour supports it, because anything that incentivises people to make more efficient use of energy, or to generate their own biofuels, is very smart, not just for them and for New Zealand but for the whole planet. I commend the Government for picking up the idea—no doubt it was laid down by the previous Labour Government—that we should remove the customs and excise on that. With emerging technologies there are a number of opportunities in this area for particularly farmers and people in rural areas to produce biofuels.

Take, for example, the complex and difficult issue of housing dairy cows. In Europe many cows and other animals are housed right through the winter; they have long, cold winters. In New Zealand, this practice is emerging, and I believe that over time those farmers will capture much of the methane and effluent produced and will start producing their own biofuel. If they had to pay excise on that, which is the current situation, then that would clearly be a disincentive. This bill addresses that issue, and that is great. I commend the Government for one little bit of vision. Mr Quinn has his eyes open just enough to see that opportunity.

I must raise another issue here. The previous speaker acknowledged the $74 million committed to the joint border management system, and that seems great. I would just warn the Government that there has been a record through INCIS, through Landonline, and, no doubt, through this new process of excessive but necessary expenditure on complex technology projects. There are indications that this total project will cost $200 million. The question I have of a Government that says it has no money for anything—other than tax cuts, of course, for its wealthy mates, and a bit of money to splash around here and there—is whether it will commit the necessary funding to follow through on and complete this project, because if the $74 million is spent and the project ends up being half-pregnant, then we will end up with some merging and sharing of information but not the completion of a project that would lead to efficiency at the border. It is logical that Biosecurity New Zealand, the Ministry of Agriculture and Forestry, and the Customs Service share information about people or goods coming in and out of the country, because we need the highest level of scrutiny and border control. This country is dependent upon biological systems. We need to make sure that the people and goods coming in and out do not bring threats by way of biological agents or unwanted pests and organisms.

The Government cut 54 front-line staff from Biosecurity New Zealand 2 years ago—54—and pretends that it has maintained a high level of biosecurity at our border. Well, the Minister knows that is not true. We will find out—because I will ask the Minister—how many incursions have occurred this year with regard to biosecurity. People will be amazed. Those incursions occur on a regular basis because we do not spend enough on biosecurity to guarantee border protection. If through this bill we have better alignment of the information shared between agencies, then that is great. But if we do not have a commitment from the Government to front-line services—the National Government cut $2 million and 54 jobs from Biosecurity New Zealand—and if it is to continue with its laissez-faire approach towards biosecurity, then we will have a major incursion.

This bill commits to better information-sharing, but it is dependent upon expenditure by the Government of $200 million. If the Government is cutting back in other areas I am not convinced that it will have the good sense to commit the rest of the money to that project to make this work. This is generally good legislation, but it has some issues to do with the potential for small-minded charges at the border—hassling people. It has issues to do with whether the Government will commit the funding to follow through with this project. Can we can trust the National Government in any way to show true commitment to protecting our country from biosecurity risks?

PAUL QUINN (National) : I do not intend to take a long call on the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill, because most of it has now been covered. In a bill that is 30 pages long, where half of the pages cover definitions, there is really not much more to canvass. This is particularly so given that our friends on the Labour Opposition benches are supporting the bill. I have not been here for the whole of the debate but from the tenor of what I have picked up, everyone is in unanimity in respect of supporting this bill, which is good because we have had a couple of good days in terms of everyone holding hands.

I guess that my friend Mr O’Connor, who has just resumed his seat, could not quite bring himself to share the full love, so he had to find something wrong with the bill. He talked about a tax. Just to demonstrate that I have read the bill, I tell members that he is referring to new section 128A, “Imposition of penalty”, which is to be inserted in the Customs and Excise Act by clause 13. I ask whether that is correct. Mr O’Connor said that he used to tremble in his boots when he was a young lad, an adolescent returning from the occasional trip to Australia—he was probably bringing in cigarettes—at the thought of what the Customs Service might charge him for not having disclosed correctly the purchase price of the product that he was bringing in. Well, all I can say is: more fool him. This system relies on honesty. I never had that fear. I never had that fear on the very few occasions when I could afford to travel to Australia. I never had that problem because I could not afford to bring back too much, anyway. I did not smoke and I was not the right age for alcohol, so there was the odd baseball cap and that was about it. I never had to concern myself with the imposition of a penalty.

This relates to the fact that if we are going to buy things overseas, then, yes, there is a limit. After all, we want our domestic retailers to be able to survive. We should be buying in New Zealand. I think that Labour Opposition members supported that. Once upon a time Labour supported the Buy New Zealand Made campaign. Members on this side of the House do not think it is unreasonable to say, yes, people can bring in a certain level of goods, but after that we think that they should pay an excise penalty, particularly when they have been not quite up front with the prices. I just thought I would respond to that aspect of Mr O’Connor’s contribution to the debate. I think he would have to finally admit to himself that it is an excellent bill.

The bill should have been introduced years ago, but it has taken until this Government has come into power to understand the use of efficiencies. In fact, the sharing of information is exactly the sort of thing that can achieve efficiencies and improve front-line servicing for our visitors. That is what this bill is about. With those few words—as I promised I would take just a short call—I commend the bill to the House.

CHRIS HIPKINS (Labour—Rimutaka) : I move that all of the words after “Committee” be deleted.

The House has recently seen something from the Government on a regular basis: when it refers a very non-controversial, very non-urgent bill to a select committee, it gives the select committee the power to meet at any hour of the day or night, whenever Parliament is sitting, and thereby actually short-circuits the democratic process and prevents all members of this House from fully participating in it. That is absolutely outrageous, and it has to stop. Where there is a legitimate reason for a bill to be considered in a hurry, it is absolutely legitimate to say that, yes, a select committee should have the power to meet during a time when the House is sitting. When a bill is not urgent—and there is nothing at all urgent about the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill—there is no justification for moving such a referral motion. That is the reason why Labour will be putting forward amendments to remove the additional parts of such referral motions—because they are an outrageous abuse of the democratic process.

I turn to the bill. First of all, I think the New Zealand Customs Service does an absolutely fantastic front-line job. We can be very proud of our Customs Service. It does great work. As my colleague Damien O’Connor has just pointed out, Biosecurity New Zealand lost 54 front-line staff in the first year of this National Government, despite Mr Ryall and his colleagues promising to focus resources on the front line. We do not actually get much more front line than the people at our borders, working for the Customs Service. New Zealand has 15,000 kilometres of coastline. The Customs Service does a big job for us. It is vital work, and it is incredibly important work. New Zealand relies on its clean, green image, and the work that the Customs Service and Biosecurity New Zealand do to keep that clean, green image and to stop things getting into the country that we do not want here is vital—it is very important. It is something we should fully support.

This bill makes a number of amendments that are relatively non-controversial, and some on which there will be substantial debate. I want to talk about a few of them. The first one that I want to pick up is the exemption from duty for those who produce biofuels domestically—householders who produce their own biofuels. I think there is a wider issue around the production of small-scale biofuels in New Zealand, and that is that it might not be just at the household level; it might be at the small-business level as well. Small businesses potentially are going to be converting waste products into biofuels. It is possible to turn used cooking oil, for example, into biofuels. There is potential for some of the by-products from the forestry industry to be turned into biofuels. So we need to rethink quite carefully how we handle duties on biofuels. I hope the Justice and Electoral Committee will take some wider consideration of that issue, and highlight and flag issues that are not covered in this bill but may well need to be covered.

About 2 weeks ago I visited a biofuels producer in Pukekohe, which I think is in the Minister of Custom’s own electorate. This small biofuels company is producing about 5,000 litres of bio-diesel every day from used cooking oil. It is a fantastic enterprise. The company will encounter issues around paying duty. So it is something we need to look at much more carefully.

Overall, as I said, it is important that we have a lot of confidence in our Customs Service staff and other people who work at the borders.

I pick up the comments made by Paul Quinn and also Damien O’Connor about the duty that should be payable on goods coming into the country. About 2 weeks ago I canvassed businesses in the main street of Upper Hutt, and several retailers raised with me the issue of people importing their own stuff over the Internet, and the impact that was having on their retail businesses. One shop in particular deals in model crafts, which can be reasonably high-end, high-value stuff. We are talking about model helicopters, for example, that people put together. People import bit by bit the relevant parts they need in a series of small packages, thereby getting round paying the tax that a retailer importing those products for sale would have to pay. People can get them from overseas via the Internet for a significantly cheaper price, but a lot of the reason why they are significantly cheaper is the fact that they bypass all of the taxes, duties, and so on. I think that is quite an important issue to consider, if we want to have a good, vibrant, small-business retail community in New Zealand. It is particularly important in niche areas like model crafts and hobbies.

Hon Maurice Williamson: Damien doesn’t think we should charge it, and you think we should.

CHRIS HIPKINS: I know that we may not necessarily agree on this. To some, that is very novel, but Labour is a party of robust debate. The Labour Party is a very broad church. Maurice Williamson does not need to be reminded of what a broad-church political party looks like. He is still in the National Party, I think. He is even a Minister in the National Government. Maurice Williamson gave me a very, very good piece of advice when I first arrived in Parliament. He said: “If you wish to advance in this place, never ever say what you actually think.” Apparently, that does not get National members very far. Those members end up being Ministers outside Cabinet.

I think our small-business community deserves the protection of a good, rigorous duty enforcement regime, so that people cannot import a whole lot of products over the Internet, sell them to their friends, and not be caught by the relevant duties and taxes that they would otherwise have to pay. The bill potentially strengthens the hand of those retailers, and that is a very good thing.

One of the other things the Customs Service does, of course—the elephant in the room that nobody has wanted to mention—is check passports at the border. [Interruption] Yes, it does do. So if some crazy sicko has stolen a dead child’s identity and applied for a passport, the Customs Service is the type of agency that would pick that up. It would pick it up, I hope. That type of behaviour is absolutely despicable. There is no excuse for it, and I think it is good that we have a Customs Service that would pick up that kind of behaviour by anybody at any time.

I will run through some of the other amending provisions of the bill. It is, by and large, a good bill, and Labour will support it. The bill amends the two principal Acts, the Customs and Excise Act and the Biosecurity Act. It has quite wide-ranging provisions in three main areas of reform, and there are some other, rather non-controversial, minor amendments. So wide-ranging yet non-controversial seems to be the order of the day. The bill facilitates enhanced information-sharing between border agencies, and that is, clearly, something we support. We look forward to the select committee having an opportunity to examine the relevant provisions and hear from submitters about the privacy and information-management issues that will inevitably flow from multi-agency cooperation. Just as an observation, I point out that in the short period of time I have been in this House we have seen privacy considerations concerning the sharing of information between agencies come up more and more. As the Government collects more information, and as technology allows for the easier transmission and storage of information, the issue of the sharing of information between agencies is something the House will end up debating a lot more often. The bill addresses that.

Other issues are addressed. The bill will allow customs officers to use reasonable force to remove an unauthorised person from customs areas. I cannot see how anybody could have any concern about that. Obviously, one hopes the officers will be appropriately trained. Immediately before this debate we were talking about private security personnel, and were saying that they need to be appropriately trained to deal with potentially violent situations. I hope that customs people who potentially might remove people from customs areas would receive appropriate training.

Under the bill, the Customs Service will have direct access to a customs agent’s records. Goods designed to facilitate a crime of dishonesty, such as card skimmers, will be banned from entering New Zealand, and that is a good thing. It will be an offence to harm a Customs Service dog, and I do not think anybody could possibly disagree with that provision. Everybody has seen those lovely little dogs wandering around the airport, and I think it would be absolutely tragic if people were allowed to harm them.

Hon Maurice Williamson: Trained by the Labour Party.

CHRIS HIPKINS: Goods in multiple shipments can be classified as if they are a single shipment, and that provision is relatively non-controversial and simple. What was that?

Hon Maurice Williamson: No, it’s all right.

CHRIS HIPKINS: Oh, it is all right—OK.

Regulation-making powers to determine when an export entry has been made are contained in the bill. They will define when an item of post has been delivered to a customs officer, and so on. The bill makes changes to a range of fines that on the surface look fairly sensible to me. The department will no longer allow an infringer to say why he or she should be exempt from paying any penalty, and that, too, seems a relatively non-controversial provision.

Overall, there is much in this bill we look forward to hearing more about.

KANWALJIT SINGH BAKSHI (National) : It is my privilege to participate in the first reading debate on the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill. This omnibus bill expands the range of requirements to maintain the sharing of information across border sector agencies. To that end, the Government is investing $70 million in new systems to administer border management.

There are enormous risks to New Zealand associated with harmful pests and diseases. To counter this we need a system that is responsive to change, that is cost-effective for users, and that involves everybody doing their bit to manage the risk. Our aim is to get the balance right between managing biosecurity risks and minimising unnecessary effects on trade and travel. We need to protect our borders. We need to develop and use profiles that use a variety of information sources, including compliance history. Those profiles will be used to target our resources at the goods pathway and supplies, and importers that present the highest risk. For example, we propose to focus on parties with poor compliance history and to increase intervention. That could mean increased inspection, mandatory treatment, or additional offshore requirements. The proposed joint border management system within the Customs Service will play a vital role in that process by providing the computer power needed to gather, store, and access the information required to operate the profile-based approach.

The first set of amendments enables the New Zealand Customs Service to manage and access the sharing of that information. These amendments will develop a statutory information-sharing framework to enable the Customs Service to manage the access and sharing of its information across a range of agencies, support shared access to that information by the Customs Service and the Ministry of Agriculture and Forestry under the joint border management system, and provide a legal framework to support an internal information-sharing project between the Customs Service and the Ministry of Agriculture and Forestry.

Another major problem affecting our country is the illegal importation of prohibited drugs, especially the trade of methamphetamine. The tracking of illegal drugs through the new joint border management system is essential to prevent those drugs making their way on to our streets, thereby giving criminal gangs the ability to distribute drugs into the neighbourhoods of our country. The Government is providing $5.9 million to the Customs Service over the next 2 years to fight the illicit drugs trade by intercepting those drugs before they reach our borders.

The Hon Damien O’Connor just mentioned that a new fee is being implemented by the Customs Service. That is not true. Even if people exceed the limit of $700, they will not have to pay any fees when they arrive in this country.

The Customs Service has been carrying out an excellent job so far, with 2008 being a record year for intercepting the precursor to P, and 2009 exceeding the 2008 figure by 66 percent. That has saved an estimated $138 million of potential harm to our community. The National Government intends to do all in its power to stop the illegal trade of drugs in New Zealand. I commend the bill to the House.

  • Bill read a first time.

Hon MAURICE WILLIAMSON (Minister of Customs) : I move, That the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill be considered by the Justice and Electoral Committee, that the committee report finally to the House on or before 9 December 2010, and have authority to meet at any time while the House is sitting (except during oral questions), and during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 187 and 190(1)(b) and (c).

The ASSISTANT SPEAKER (Hon Rick Barker): Before I put the Minister’s motion, there is an amendment in the name of Chris Hipkins to omit all the words after “Committee”.

A party vote was called for on the question, That all the words after “Justice and Electoral Committee” be omitted.

Ayes 52 New Zealand Labour 42; Green Party 9; Progressive 1.
Noes 69 New Zealand National 58; ACT New Zealand 5; Māori Party 5; United Future 1.
Amendment not agreed to.
  • Motion agreed to.