Hon MAURICE WILLIAMSON (Minister of Customs) Link to this
I move, That the Border (Customs, Excise, and Tariff) Processing Bill be now read a second time. The bill was introduced into Parliament in October this year and had its first reading on 15 October, so I think that gives members an idea of how quickly the Government Administration Committee worked to process it, to get it through and get it back. I pay tribute to the members of the committee, which was ably chaired by Mr David Parker, and deputy chaired by my colleague Jacqui Dean. The committee members did a superb job. I pay tribute to them all and thank them for the attention that they gave to the bill, including some of the minor tweaking and tidying up that select committees often do so well to make a bill just a little bit better.
The bill is an omnibus bill that amends the Customs and Excise Act 1996 and the Tariff Act 1988 and makes consequential amendments to the Goods and Services Tax Act 1985, the Finance Act (No 2) 1993, and the Finance Act (No 2) 1995. The amendments contained in the bill make improvements in the processing and administration of goods and people required under these interrelated Acts. The majority of amendments relate to border processing and administration by facilitating New Zealand’s international commitments, or the use of new technology, while other amendments improve border processing and administration generally. This bill contains three sets of amendments to improve the effectiveness of the Customs and Excise Act—which I will refer to as the Act from here on—and to meet the Government’s policy goals: amendments relating to the automated passenger processing system SmartGate, six amendments to clarify and enhance the Act, and eight amendments to address legislative gaps and/or uncertainties.
In today’s international travelling environment, we are faced with threats to our personal security. Those of us who have travelled internationally are well aware of the various security measures with which we must comply, whether it be to protect New Zealand’s biosecurity, New Zealand’s community—from, for example, illegal firearms, offensive weapons, and controlled drugs—New Zealand’s aviation security, or, indeed, New Zealand’s immigration laws. These obligations on the travelling public have resulted in longer waiting and processing times at airports.
To counter this, the Government has announced that low-risk Australian and New Zealand passport holders will enjoy a faster, more streamlined exit through border processes at the international airports at Auckland, Wellington, and Christchurch. As part of that, automated processing through the SmartGate system will become an option for travellers holding an Australian or a New Zealand e-passport. In reviewing the Act to take account of SmartGate, Customs Service officials have identified potential amendments relating to passenger interaction with the clearance process. These amendments are relatively minor. The focus of the amendments is to ensure that automated systems can be used in place of customs officers. The effect of the amendments is to allow the use of the automated processing systems at the border, which will benefit the travelling public and will contribute to the Government’s objectives of improving the border-crossing experience for trans-Tasman travellers.
The Government Administration Committee has proposed an amendment to ensure that the Customs Service provides for an alternative means of border processing that involves having a person in any new or amended automated electronic system. Having a manual processing option is already part of the SmartGate arrangements, so I was happy to agree and accept this amendment in order to provide an assurance to the public that anybody who does not like machines or who does not want to use them can always use the manual alternative. I intend to propose a very minor technical amendment by way of Supplementary Order Paper 100, however, to ensure that this new provision does not inadvertently impact on some existing arrangements. For example, if we specified that there has to be a manual alternative to every automated process, it may mean that the Customs Service would need to have a manual paper base for all its automatic database tracking of incoming passengers. This amendment will make sure that only the processing of passengers through the gate has the alternative for a human to process passengers, not all the back-office computer systems, which, if the provision had stayed, would have caused at least some doubt.
Hon Darren HughesHon MAURICE WILLIAMSON Link to this
Well, it is very straight up and down. It is not a coastal shipping type of thing.
SmartGate will enhance the role of customs officers at the border, as front-line customs officers can be redeployed to the secondary line, where the intervention with high-risk passengers occurs. I reiterate that SmartGate cannot and will not be a substitute for the observation skills and vigilance employed by trained customs officers at the border, but I want those customs officers putting their effort into the really high-risk, big targets and not into all of the ordinary Kiwis and Australians travelling across the Tasman as part of their everyday operations.
Six amendments are included in the bill to clarify and enhance the Act, especially in relation to strengthening the Customs Service’s law enforcement capability. The amendments enable customs officers to search a vehicle, regardless of whether it is being operated or is unattended, and they give them the ability to use reasonable force to gain entry to effect the search of such a vehicle. The bill will create a power to arrest any person committing an offence punishable by imprisonment under the Act, whether or not the person is on a craft. One of the quirks of history is that a person had to be on the craft to be arrested, but once the person was off the craft, customs officers could not do that.
The bill provides that duty on goods manufactured other than in a manufacturing area become due immediately upon the manufacture of the goods. It creates a new offence of making a false allegation or report to the Customs Service that an offence has been committed while knowing that the statement is not true, or of making statements with the intention of wasting or diverting personnel or resources. The bill will enable the Customs Service to use future technology in those provisions that relate to the detection of tampering or interference with goods, containers, or packages. It will also provide the Customs Service with the ability to require payment of debts within the 20-day time limit period where the Customs Service receives advance warning that a company has a dubious financial situation and payments by the due date are unlikely.
I note that committee members have paid close attention to the arrest provisions, which is entirely appropriate, given the serious nature of this power. This particular amendment extends the circumstances where customs officers may arrest without warrant, but it is consistent with the focus of customs officers’ work. I am pleased to see that the amendment has been supported by the whole committee.
The bill also includes eight minor amendments to the Act aimed at addressing legislative gaps and uncertainties. These include amendments to clarify the provisions in the Act relating to authorised persons, to allow for the revocation of a customs export delivery order in certain circumstances, to allow material usually set out in the schedules to the Customs and Excise Regulations to be incorporated by reference, to relocate the alcohol personal use exemption from the Customs and Excise Regulations to the Act, to allow the chief executive to nominate non - customs officer employees to lay an information, to allow for the suspension of a registered user’s registration, to clarify that the chief executive can grant further time for the lodgement of an entry of goods for exporting in appropriate cases, and to allow for the imposition of administrative penalties for entries containing an error or omission.
The bill contains amendments to the Tariff Act 1988 primarily to allow for the faster and more efficient implementation of tariff reductions arising from free-trade agreements. It will allow material usually set out in tariff amendment orders to be incorporated by reference, and will make The Working Tariff Document of New Zealand, which is maintained by the New Zealand Customs Service, the legal Tariff. Following the amendments to the Tariff Act, schedule 3 of the Customs and Excise Act is replaced with an excise and excise-equivalent duties table available on the Internet and in hard copy. The bill also enacts a previous decision of Cabinet to raise fuel excise duty by 3c per litre, effective from 1 October 2010.
Again I thank the Government Administration Committee very much for completing its work on this bill in such a very compressed time frame. We will be launching the SmartGate terminals at Auckland Airport on 3 December, which is only a few days away, and this legislation is required to allow those terminals, which operate without any manual intervention, to be implemented. I commend the Border (Customs, Excise, and Tariff) Processing Bill to the House.
SU’A WILLIAM SIO (Labour—Māngere) Link to this
I am happy to rise to declare that Labour supports the Border (Customs, Excise, and Tariff) Processing Bill, as outlined by the Minister of Customs, the Hon Maurice Williamson. I take this opportunity to reflect back to the Government some areas that need to be illuminated. I also signal that we have a couple of questions we would like to ask the Government during the Committee stage for clarity. I also take this opportunity to recognise my colleagues the Hon Rick Barker and the Hon Nanaia Mahuta, who, as former customs Ministers when Labour was in Government, had a hand in the genesis of the development of the SmartGate system with our neighbours across the ditch, the Australian Government. I acknowledge them because through their initial efforts we are able to join today with the Government in introducing SmartGate. Labour supports SmartGate as an automated passenger processing system that can be used for faster and easier passenger processing, and that will facilitate trans-Tasman travel for people deemed to be low-risk.
Although I was not a member of the Government Administration Committee, it was a concern to me that there were only two submitters. Because the airport is in Māngere, I had the opportunity to ask the people there whether they had any concerns about SmartGate. Although the people of Māngere—which is the gateway to the nation—support SmartGate, they did express some concerns. One concern was this: because we now have a National Government, SmartGate may be used only for the elite of society, big business, or those who travel in first or business class. There was a concern that SmartGate may not include ordinary citizens and ordinary Kiwis. What the Government does is what the Government will do. But in so far as Labour is concerned, SmartGate is an option for low-risk passengers. It should not be solely for business passengers, and it should include tourists and the ordinary Kiwi traveller.
A further concern raised was that SmartGate is only a machine and it may make a mistake. If we can imagine a machine using SmartGate, a confrontation could occur where the machine is capable only of making a yes or no decision, and a person arriving has a valid explanation that could work in his or her favour but is unable to provide that to a real person. This concern was reinforced by the Office of the Privacy Commissioner, which, in its submission to the select committee, gave evidence that there should be a requirement that manual alternatives would always be available or that the chief executive will consult the Privacy Commissioner on any privacy implications before eliminating or reducing manual alternatives. Labour supports the Privacy Commissioner’s recommendation that manual alternatives, or real people, always be available. I am pleased that the committee recommends an amendment to clause 22 of the bill that proposes at least one alternative method of processing involving a person being available alongside automated border processing.
Labour agrees with the need to stay up to date with the latest technology to keep our borders safe. We need to protect our borders against the growing P menace, and I will have a little bit more to say about that later. Labour believes that the New Zealand Customs Service must have the tools to stay on top of this threat, and the Government must give its full support to our border control agencies. We will also be looking to support the Government’s amendments that will be introduced later on.
JACQUI DEAN (National—Waitaki) Link to this
I rise to speak to the Border (Customs, Excise, and Tariff) Processing Bill. Managing New Zealand’s border provides a number of challenges for New Zealand and for the New Zealand Customs Service. The current customs priorities reflect the New Zealand and Australian Governments’ desire to make crossing the Tasman simpler and more efficient for travellers, with the introduction of new technology and streamlined processes. Another priority is the introduction of a new express lane for travellers in airports identified as being a low biosecurity risk. There will be a pilot of assessing bags during flight time in order to allow quicker processing on arrival, and an increase in the instant biosecurity infringement fine from $200 to $400. These measures demonstrate the Government’s commitment to streamlining trans-Tasman travel, while enhancing our world-class biosecurity system. The Customs Service also has a strong priority of increasing the interceptions of illicit drugs and precursor materials that are entering New Zealand.
Our border is extremely busy. In a year, the Customs Service processes 9.62 million air passenger movements inwards and outwards. Every year 4,611 marine vessels are cleared by the Customs Service. The Customs Service also coordinates the surveillance of some 15,000 kilometres of coastline, and clears just over 1,000 small aircraft each year. It deals with nearly 42 million import transactions, including those by mail, and with 27.5 million export transactions during a year. The amendments in the bill will also meet the Customs Service’s objective of meeting our international obligations relating to cross-border crime.
The bill makes amendments to the Customs and Excise Act and also to the Tariff Act. The bill contains three sets of amendments: firstly, there are amendments relating to the automated passenger processing system known as SmartGate, and I will make a few comments about those; secondly, there are amendments to clarify and enhance the current legislation, and our good Minister of Customs, the Hon Maurice Williamson, has gone over those amendments, so I will not repeat that; and, thirdly, there are amendments to address legislative gaps and uncertainties. The majority of the amendments relate to border processing and administration, by facilitating New Zealand’s international commitments, or to the use of new technology, although other amendments contained in the bill improve border processing or improve administration in a general sense.
I will make a few comments about the SmartGate amendments. One of the positive aspects of the bill is that it sets out amendments to the current legislation so that it can take into account SmartGate technologies. Although these amendments are relatively minor, they will ensure that automated systems can be used in place of customs officers. The effect of these amendments is to allow the use of automated processing systems at the border, which is something that will benefit the travelling public and contribute to the Government’s objective of improving the border-crossing experience for trans-Tasman travellers. As the Minister mentioned in his very good speech, there is a provision in the bill for passengers to have the alternative choice of clearing customs face to face with customs officers, far from the contention of the members on the opposite side of the House that the SmartGate technology will work to the benefit of more affluent travellers and leave less affluent travellers to meet with a customs officer in person. To the contrary, that alternative is provided for people for whom it is not suitable get their face scanned—for example, people who are blind or who are in wheelchairs. Alternatives to the SmartGate technology are there to cater for people who do not want to be scanned, or are not able to be scanned, through the SmartGate technology.
This bill amends interrelated Acts to improve the processing and administration of goods and people across New Zealand’s borders. The majority of the amendments relate to border processing and administration by facilitating New Zealand’s international commitments for the use of the new SmartGate technology. I commend the bill to the House.
Hon CHRIS CARTER (Labour—Te Atatū) Link to this
I am pleased to stand in support of the Border (Customs, Excise, and Tariff) Processing Bill. I guess it is unusual to have legislation in this House that is supported by both sides of the political divide. As my colleague the Labour Party member for Mangere, Su’a William Sio, said, the genesis of this bill lay in the previous Labour-led Government. I want to take this opportunity to thank you, Mr Assistant Speaker, in your role as a former Minister of Customs in our Labour-led Government. You were the first person to bring to the customs area a focus on practicality and a common-sense approach to things. I think few New Zealanders realise when they line up at the airport and see a sign saying: “Australian and New Zealand Citizens” that Rick Barker was the person responsible for that. You took Chris Ellison, the Australian customs Minister, to our airport and you said to him: “Look! We allow Australian citizens to line up with New Zealand citizens to be processed.”, and he did the same for Australian airports. That has made travel for New Zealanders to Australia quicker, more efficient, more effective, and a lot easier. I think few New Zealanders know they can thank you for that very practical approach, and that was just one example of the approach you took to the customs portfolio. Your successor in the Labour-led Government, Nanaia Mahuta, and now Maurice Williamson have attempted to bring to customs an efficient, practical, hands-on approach so that the critical task of border security services—customs, immigration, and so on—is about finding effective ways to keep our borders safe, but at the same time facilitates the movement of people and goods through the border in a way that is practical and helps to create economic efficiencies.
Labour is supporting this bill. We think SmartGate is a sensible use of technology to improve effective passenger flows. Labour also supports the enhanced ability of customs officers to intercept and to search, and to use new technologies to see whether containers have been interfered with. Certainly in policing and, indeed, in immigration as well, containers can provide a vehicle, a vector, for the importation of drugs. Even on short haul journeys there is the ability for people-smuggling in containers. Having an effective system and an effective use of technologies to be able to check whether containers have been interfered with is very important.
Another area I would like to focus on is biosecurity. In his first reading speech Maurice Williamson said he was trying to shift resources from the management of passenger flows, where people do not pose a risk either to our security or to our immigration services, to using resources to intercept in those very critical issues of keeping New Zealand safe, particularly from biosecurity and health threats. I think that is very commendable, but I ask Maurice Williamson—as I undoubtedly will in the Committee stage—how this seems to be in contradiction to the last Budget that was presented to the House by the new National-led Government, where $3.75 million appeared to be cut from border security funding. This is at a time when new technology and the associated expenses are being used for things like SmartGate. My understanding is that about 50 border security staff have lost their jobs.
This area that Mr Williamson touched on in his speech is so critical to the health and well-being of our country. We are a major food producer in the world. Primary production is critical to the economic well-being of all New Zealanders. Not just rural dwellers, but all Kiwis, depend on the prosperity and wealth of our country and on the effectiveness, viability, and safety of our agricultural industries. For 5 years I was privileged to be New Zealand’s Minister of Conservation. A lot of the work on leading the Department of Conservation to protect our natural environment was about the biosecurity of New Zealand. I think only one other country in the world, Madagascar, has suffered as much impact on its natural environment from introduced pests—animal, insect, plant, bacteria, and fungi—as New Zealand has. Only New Zealand and Madagascar have been most impacted on by alien species. There are 90 million possums chewing their way through our forests and millions of stoats devouring our native bird species. Plant species like gorse and broom have colonised our agricultural land and have cost millions for industries to combat. We even have an introduced species of seaweed, Undaria, infesting many of our southern harbours, creating costs and threats not only to our unique biodiversity but also for the practical use of those ports. It colonises boats, moorings, jetties, and wharves. These are all costs for the country, and they are all about having slack and ineffective security. I remember when I was first elected as an MP we had the painted apple moth incursion in west Auckland.
It was last century, Mr Hughes; that is true. My colleagues from west Auckland like David Cunliffe and Lynne Pillay remember well the concern of our local residents and the millions that our Labour-led Government had to spend in dealing with that incursion. Luckily we were successful, because the painted apple moth posed an enormous threat not only to our timber industry but also to our native forests. In more recent times we have had the problem of the varroa bee mite, which has devastated the honey bee industry in New Zealand. Earlier than that we had the introduction of about five exotic wasp species, which has had a big impact on biodiversity. Those are the things that have happened.
Today in question time we heard about a cane toad that was found in Queenstown. I think I heard the Minister of Agriculture rebutting the Labour Party spokesperson when he raised concerns about cuts to biosecurity services, saying that there had been eight in the time that the Labour Government was in power. I do remember well, as Minister of Conservation, that a cane toad jumped out of someone’s suitcase in Levin, of all places. It again shows that a suitcase had come through our border and inside it—inadvertently, I am sure—was a cane toad. It is a rather large species but it still managed to get through a port or, more likely, an airport. Those are all species that could impact on New Zealand. Of course, we also have threats not only to our native environment and our agricultural industries, but also to our human health.
Hon Paula Bennett Link to this
If it doesn’t have a swipe card, it’s not getting through the SmartGate.
I hear the member for Waitakere, Paula Bennett, ridiculing this speech. Of course, she has lived in west Auckland for only a short time so she will not remember the painted apple moth drama, but I assure her that people in west Auckland felt very concerned about it. If she actually went to a few more things in the west, she might know about that.
As I said, we face threats to human health, as well. Rabies, a disease that has been eliminated from New Zealand—its vector, a canine species—could well be introduced into New Zealand as a result of inappropriate border control. The Asian tiger mosquito has larvae that have already been found in tyres imported from Japan. It is a vector for malaria and other very dangerous pathogens that could infect the human population.
The saltmarsh mosquito has already been found in the area around Nelson and briefly in the Kaipara area, although, fortunately, not recently. Again, that is a vector for dengue fever. These are all threats to human health. Red fire ants have been found in New Zealand. I remember that when I was the Minister of Conservation we discovered at Auckland Airport and in Napier two colonies of red fire ants. They were eliminated, but within secure borders that very nasty ant species, which is now very widespread around Brisbane, could well be introduced into New Zealand.
I say to the new Minister of Customs in the National-led Government that, yes, this bill is a good bill. It seeks to do good things. But if the Government cuts back on border security—and we have seen that already in the latest Budget, where 50 staff have lost their jobs—then these diseases, these pests, these risks to human health, these risks to our agricultural industry, and these risks to our natural environment do pose a real danger. That is what we need to focus on.
KEITH LOCKE (Green) Link to this
During the first reading debate on the Border (Customs, Excise, and Tariff) Processing Bill, our speaker Kevin Hague was in somewhat of a quandary. The bill had been made public—and, therefore, able to be read—only a few minutes before the debate started. The Green Party, in protest against not having notice, voted against the bill at the first reading. It is often difficult with omnibus bills to work out whether to vote in favour or against, because there are often a number of things we agree with, as is the case with this bill—such as the improvements to the workings of the Customs Service—and some things we are much more questioning of. On balance, we are voting against this bill, but we recognise that there are a lot of good measures in it.
I will go through, firstly, the SmartGate measures that will be brought in, I understand, on 3 December. The Green Party is supportive of more efficient processing of people crossing the Tasman between Australia and New Zealand. I understand that the purpose is to allow people on both sides to go through proper processing—immigration checks, etc.—only once, rather than twice, which is certainly an advantage. Also, there are security issues with SmartGate. Making sure that one has the right person going through is important.
We have some questions as to where biometric identification might go. At present, the system envisaged, and implemented in some respects, in New Zealand is the facial recognition system, where certain points of a person’s facial features are, by a photograph, compared with what is on the chip in the passport. But the Green Party is concerned that that might be extended to other forms of biometric identification. During the debate on the Immigration Bill, which has now passed through the House, we put forward an amendment to the effect that iris scans should not be used at airports. An iris scan is a much more intrusive form of biometric identification that is coming in around the world, including, I think, in Australia. We are wary that the SmartGate system might use the iris scan system or, even worse, another system that is being brought in. It is not necessarily used just for identifying people, but it could be part of the SmartGate system. It is often called the naked scanning system. A person going through the sorts of things we go through at airports now is scanned and a naked image of the person taken. I have seen articles around the world in various papers complaining about this system as a grave intrusion on the privacy of people. One writer complaining about it said: “It is often said that if you’ve got nothing to hide, you’ve got no need to worry.”, but in the case of naked scanning we do have something to hide. So the Greens are hoping biometric identification does not go too far down that track. And it is good that a manual alternative for people has been put in the legislation.
There is also the problem of electronic proof, and we have seen this just last week with the debate over council car-parks in Auckland and the gaining of people’s credit card numbers. Upon first analysis, that does not seem to have been done by people skimming the machines that the credit cards are put in; somebody has got in behind the system. That can be a problem with relying too much on electronic identification. Someone could get in behind the electronic system, and change round the electronic part of the identification—for example, mucking up the chip in a passport so that the SmartGate system thinks it is John Smith when it is really John Jones. Someone could even get into the computer database. That is always possible. One of the problems with electronic systems is that people completely rely on them; they think that if people have gone through the electronic system, they must be OK. There is not the same vigilance, the same looking for human characteristics, for the suspicious indications that people might give out, that our customs officers and immigration officers are trained to recognise at the present time.
The other question that has come up and has been spoken about by other speakers is biosecurity. There is a bit of tension between a SmartGate system, where the whole point is to rush people through, and proper biosecurity checks. The person doing the biosecurity check has to do the same biosecurity check on all the people coming through, but there might be some nervousness about holding up people coming through the SmartGate system, because that might be seen to be undermining that system. That nervousness can be complicated by what Chris Carter has just talked about. There seems to be a loss of staff at the frontline. He mentioned the figure of 50 staff lost from our airports. I think it is important to keep up the biosecurity checks at our airports. It will be very bad if we let that down, at all.
Also, there is reference in the bill to improvements in the X-raying of containers. The problem at the moment is that the overwhelming majority of containers are not given any serious biosecurity inspection, and that has resulted, I think, in a number of the nasties that Chris Carter talked about coming into New Zealand. Even X-ray systems have a limited use in relation to true biosecurity with smaller items. The X-ray systems are very good. I have seen them in operation. They are time-consuming but they tend to pick up people-smuggling. They pick up the bigger items such as people, or other big objects that are not supposed to be in a container. The X-ray system picks them up. But little nasties and things like that require closer inspection, and I do not think we are doing quite enough about that at the present time. That is one of the reasons why the Greens would like this bill to go much further.
There is the question of powers of arrest. It is a tricky question, because, clearly, at the airports themselves often we have to detain people pretty quickly. A police officer might not be around, so the officials having that power has validity. There is a certain caution among the Greens about extending that power to 7 days beyond the suspicion that a person may be about to commit some sort of crime. It is understandable in certain situations where, like on sea craft, the customs officer cannot get to the people immediately, and that is one of the reasons, I think, why that 7-day provision was put in. But if one has advance suspicion, then I think that, in general, a police officer should be obtained to go with the customs officer, so that the customs officer does not develop a consciousness that over those 7 days he or she can do the arresting. Wherever possible, we do not want to turn customs officers into police officers and to give them all the hassles of doing the arrest process themselves. I do not think it is what the customs officers would want. The commentary on the bill as reported back from the Government Administration Committee states: “Under section 174(3) a Customs officer who arrests a person under section 174 must, unless the person is released sooner, as soon as practicable call a constable to his or her aid and deliver the arrested person into that constable’s custody.” That is, clearly, trying to get away from customs officers doing much more than very immediate arrests then quickly passing the person over to the police to be taken into custody and charged.
The other thing that the Greens are worried about with this bill is that it tends to streamline the regulations around the free-trade agreements in operation. The Green Party has been a bit concerned about those free-trade agreements lowering tariffs to zero and undermining New Zealand manufacturing. We do not want a streamlined process of regulation that is out of the purview of Parliament and that detrimentally affects New Zealand industry. We have seen that over just the last week with Griffin’s and some of its iconic biscuits; some of its operations are now going offshore. Also the production of various Cadbury’s bars, like Moro, or whatever they are, is going offshore. I think the Government’s approach of total deregulation—sometimes through free-trade agreements—the high dollar, and everything else that goes with the completely open-market, free-trade approach of the present Government, is being helped by the implementation of this legislation. That is why we are voting against it.