Customs and Excise Amendment Bill (No 3)

SHANE ARDERN (National—Taranaki-King Country) Link to this

It is a privilege to rise and speak to the clauses in Part 1 of the Customs and Excise Amendment Bill (No 3). Can I at the same time touch briefly on Supplementary Order Paper 241, which we will probably be voting on in this part, as well. I note that, unlike the emissions trading legislation, where there were 785 amendments, Supplementary Order Paper 241 has just two amendments. One affects clause 2 and omits the word “August” and substitutes the word “October”. Likewise, in clause 18A it omits the word “August” and substitutes the word “October”. As there was pretty much universal support for the bill in the House and in the Foreign Affairs, Defence and Trade Committee, the only conclusion we can draw is that once again we have a very tardy Government that cannot conduct the important business of the State in a timely fashion and so has to come to the Committee of the whole House in order to extend the time by which the bill will receive its Royal assent. I notice that the date—October—is still within the term of this Government. It is amazing that it has not actually kicked it out to December or January of next year, but it has not, and that is a good thing because this is worthy legislation.

I will briefly touch on new section 68A, “Exemption for tobacco manufactured for personal use”, inserted by clause 6A. Subsection (1) states that “Section 68 does not apply to the manufacture of tobacco in a private house or dwelling place,” which describes the piece of land, or what is known in real estate terms as the “house and curtilage”. For those who might wonder what that term means, that is the section or the land attached to or associated with what would normally be described as someone’s house or dwelling place. In other words, if I were to decide to plough up 15 acres at the back of my dairy farm and put it into use for growing tobacco for my own personal use, then I would not be exempt under this section of the customs and excise legislation. My colleague Tim Groser touched on the reasons why the select committee spent so much time on that, and they are very valid, because, of course, it is the area where the Customs Service has, I guess, a jurisdiction over revenue or the control of the integrity of what should have a customs excise duty and what should not.

I applaud the committee, as I said in the second reading debate, for its common-sense approach in arriving at a sensible exemption of 15 kilos of tobacco per annum. Let us see how it goes. It is one of those things we will not know until it is tried. It should not tie up Customs Service staff in needless inspection and trying to track down those who are growing a bit of tobacco for their own personal use. Like the member from New Zealand First, I was quite fascinated with the Green Party minority view on this, in which it raised concern about the exemption of 15 kilos for personal use and suggested the limit was a bit too high. I, like the member, would wonder whether, if it were another plant that was being grown for domestic consumption in a person’s dwelling place or on land associated with the dwelling place, the Green Party would have had such a firm view. One can only conclude that, according to the Greens’ philosophy, one type of “chop chop”, if you like, is safer or less health threatening than another. Maybe one of its members will take a call and explain their logic in that. Certainly, it is not backed up by medical science, to the best of my knowledge.

I would also like to touch on, as I did earlier, forfeiture and seizure. I know that this was an area the Customs Service itself spent quite a bit of time agonising over, and the ability to use the chief executive’s discretion in the way it is now able to be used is a sensible and pragmatic step in regard to that. I know that there are some cases—and bad cases make bad law as a general approach—where there have been some extreme one-off examples. It is not widespread, but there are cases where people feel as though they have not been treated fairly by the system. All of us who are constituent MPs have probably received such cases from time to time and found when we look into them that they are perhaps not as grave as those who bring them to us might have us believe. But sometimes they are, and this step potentially will help tidy up that loose end.

TIM GROSER (National) Link to this

I will focus on just a couple of aspects of Part 1, again to make a broader point. I am looking at the serious penalties provisions and the appeal procedures around those provisions. We are dealing with something that members of the Committee now understand is related to some core policy objectives—that we must have at our borders a very high level of discretion about what is imported into the country and what is not, for all manner of good reasons.

There is a general feeling out there in our community and amongst the political parties that the New Zealand Customs Service does a particularly good job for New Zealand. That is a sentiment we often hear, and for very good reason. But it does have Draconian powers. Those powers must be exercised by often very junior officers, and they have to be exercised right there on the spot, without senior personnel necessarily there to guide the individual judgment of the young customs officer concerned. We want the Customs Service to move swiftly, expeditiously, and, in some ways, almost brutally when it has reason to be concerned that something being brought into our country will endanger the interests of our citizenry. The other side of this is that when we give people—particularly, at times, younger people—Draconian powers of the State, we have to be very careful about the appeal process. This bill is extremely sound in terms of getting the balance right.

We have a situation where a whole-of-Government approach, which is exercised by as many as 15 different Government agencies, is exercised by one agency, the chief executive of the Customs Service and his or her officers, and quite deliberately written into Part 1 of the bill are procedures that do not require a consultation process. That is quite deliberate. It is not normal that we get up as politicians and praise the lack of consultation. We are trying to get very swift and expeditious action on something that really matters.

Equally, because of the danger of decisions being made that, when we have the fullness of time to look over the facts, were perhaps marginal line calls, there is a very simple appeal process. It does not cost anybody any money to ask for a review of forfeited goods. That is made very clear. I do not have the exact clause in front of me, but I remember extremely precisely the provision dealing with it, even if I cannot find the number. The chief executive has wide discretion to make a quick decision, and this flows out of the Law Commission’s report suggesting we need streamlined procedure. In respect of new section 231, “Applications to review seizure of goods”, inserted by clause 13, a New Zealander can apply to a single agency. There is no cost. It is a very simple process, and the chief executive has a wide discretionary power to review the circumstances. For example, the applicant must state the grounds on which the review appeal is being made, and so on and so forth, and there is an appellant process above that, if things go wrong.

I do not want to introduce a discordant note into this debate, but I cannot recall many other instances in the life of this Government of people simplifying the bureaucracy and the administration. If the Minister wants to take a call on this part, we should give credit where credit is due, but ask at the same time why the Minister was unable to persuade colleagues that a whole host of other important matters should not go down the same track of streamlining the bureaucracy, lowering compliance costs for citizens who have to deal with the armed and other powers of the State, and giving a better result, all told.

I think there is a very good new process involved in something that is quite important and can give rise to a lot of upset on the part of citizens stopped at airports and ports. I imagine many people feel nothing short of outrage when they are asked to justify why they are bringing this or that into the country, so it is a delicate matter and always, no doubt, very difficult for our front-line customs officers to deal with on a personal level. We all know that they need strong backing from members of this House for the work that they do.

The CHAIRPERSON (Hon Marian Hobbs) Link to this

The debate on this part includes the Minister’s amendments set out on Supplementary Order Paper 241.

JOHN HAYES (National—Wairarapa) Link to this

I have to say that that last vote was absolutely astonishing. Here we have very good legislation—and Part 2 is very good—and two parties are railing against common-sense and excellent legislation, without explanation. The only conclusion one can draw in the case of ACT, perhaps, is that it does not want there to be any limit on the amount of tobacco that can be grown for personal consumption, because that in some way rails against freedom. I say to the Minister in the chair, the Hon Rick Barker, that there is no other logical explanation, and I am sure he is as confused as I am.

Part 2 amends three or four pieces of legislation. The first is the Protected Objects Act 1975, the second is the Misuse of Drugs (Prohibition of Cannabis Utensils and Methamphetamine Utensils) Notice, and the third is the United Nations (Iraq) Reconstruction Regulations. There are also some transitional provisions set out on clause 18A—the reason being that if one thinks about the life cycle of a tobacco plant, one cannot arbitrarily draw a line in the sand and say these regulations are being brought in and will apply from today, when people may have moved under the old regulations. The regulations will apply to the growing of tobacco from 30 June 2009.

People may find some astonishment in the fact that the United Nations (Iraq) Reconstruction Regulations of 2003 needed to be amended. I certainly did, so I got a copy of the relevant statute, just to get a handle on what was being discussed here. These regulations were designed to enable the Government to control the activities of our soldiers and our troops in Iraq, and other officials that may be there. This legislation has been put in place particularly to protect Iraq’s cultural property and to make sure that if elements of Iraq’s heritage are pirated and brought back to New Zealand, if people were to get involved in the trading of petroleum or gas products, or if people were caught looting Iraqi Government assets, then these matters could be dealt with under New Zealand law.

Because of that, and because, under this legislation, we are giving the Customs Service the opportunity to follow a more pragmatic regime in respect of the forfeiture and seizure of items under the Act, we are having to modify the United Nations Iraq Reconstruction Regulations in two ways. Regulation 12(1) makes it clear that the Customs Service is authorised by this change to act using its own common sense in regard to all goods that are prohibited in New Zealand. Also, the bill amends regulation 12(2) to take into account something that may have been imported into New Zealand and then re-exported, and to authorise the Customs Service to become involved in the transaction and to operate. So it is quite important to realise that when we change one piece of law here it can have unintended consequences in other pieces of law. I think that our officials have done a very good job in trawling through quite obscure legislation to make these transitional arrangements work in historic legislation passed in this House.

The second part of the legislation applies to modifying section 10 of the Protected Objects Act of 1975—legislation that has been modified on many occasions. This part of the bill relates to the return of unlawfully exported protected foreign items. We are changing this legislation so that the Customs Service management can intercede and make some common-sense decisions about how issues should be addressed if, for example, we were to find that some Buddhist or Islamic treasures had been found in Iraq and brought back to New Zealand.

With those few words, I will just say that we on this side of the Chamber are fully supportive of Part 2 of the bill and will vote accordingly.

SHANE ARDERN (National—Taranaki-King Country) Link to this

As I said earlier on, the amendment in Supplementary Order Paper 241 is one that really draws a contrast between the legislation that we are discussing here today, which has pretty much widespread support in the Committee—we thought unanimous at one stage, but we have since discovered that that is not the case—and the excellent work done in the Foreign Affairs, Defence and Trade Committee reporting back on time, and this Supplementary Order Paper before us, which changes the date simply because this Government could not do the important business of the day. In other words, it is a Government that was too preoccupied with all sorts of social interference instead of getting on with the core business of government, which is customs and excise.

I tell the Minister that the Customs Service is the oldest Government department there is. He has probably not heard of it—although he probably has, because I am sure it will have detained him at the border on one or two occasions, so I am sure he has run across customs before today.

Here we are in the Chamber today, still locked into Tuesday, which is an interesting concept is it not? This is the third 2nd of September that I have debated in the Chamber this week, even though everybody else has caught up to Friday, debating a Supplementary Order Paper that would not have been necessary, of course, if the Government had actually got on with the business of the House at the time it should have, instead of wasting so much time on things such as trying to enforce on local bodies social interference like “you must”, “you must not”, “could”, “could not”, “will” or “if you wish” provide social housing. So it is, I guess, somewhat ironic that we are now debating a Supplementary Order Paper that omits the word “August” in clause 2 and substitutes the word “October”, and in clause 18A omits the word “August” and substitutes the word “October”. It is quite ironic; it does demonstrate that this Government is tired, and I think we should go to the polls and have an election to see what the folk of New Zealand think about that.

TIM GROSER (National) Link to this

I tell Mr Ardern that I am into that; let us bring it on! I do not think the date can be very long away. I say to him that comment was probably not appropriate, given that we are speaking in sweet harmony on the Customs and Excise Amendment Bill (No 3), but it is nevertheless a sentiment I strongly share.

When we look at this bill we see it does a number of things that are of central importance to New Zealanders. We all understand that sometimes our geographic isolation is a fundamental problem and at other times it is a huge advantage to us. We do have certain advantages in our isolation. We rely on the front-line officers of our Customs Service to secure our borders, and they do a fantastic job. There is widespread recognition of that.

I talked earlier about one of the many policy objectives related to this bill. Behind this bill is health policy. The need to move comprehensively against smoking is absolutely understood, and there is huge, positive evidence that the higher the price is, the lower the consumption is. But as the evidence indicates, as soon as one moves in that direction there is a serious danger of creating an incentive for organised crime. As I indicated in speeches during earlier stages of the bill, cigarette smuggling is a massive problem internationally. I recall that in the United Kingdom it was estimated to be a larger source of criminal funding than narcotics, believe it or not, and there are massive issues of law and order enforcement in many countries around this issue. Of course, ultimately, the point about terrorism is not some academic point. We recall that the bombers of the World Trade Center had counterfeit cigarette excise stamps in their apartment when the federal authorities broke into them.

There are big issues here. We have cleaned up our act here. I think we had a pretty reasonable regime, but there were certain things that the Customs Service and our authorities wanted to move on, and they persuaded the Government and then the Foreign Affairs, Defence and Trade Committee to move on them. We have expedited procedures that allow the chief executive of the Customs Service, acting on behalf of a wide range of Government agencies, to take very swift action. But of course, since the powers that customs officers have are Draconian, involving the seizure of people and property, there have to be civil liberties checks in place. I think there is an excellent new regime for the forfeiture of goods. It is very simple, and operates at zero cost—just the cost of a stamp to send the request for a review to the chief executive. I think we have a very nice example—and I just wish that we could see more examples of this type—of the simplification of procedure being introduced into legislation. I think this country would be a better place for it.

There is wide-ranging support for this bill. It achieves a number of objectives, and I think it will facilitate the work of our front-line staff. It has very strong support in this Parliament.

SUE MORONEY (Junior Whip—Labour) Link to this

Just reflecting on the vote that was recorded for Part 1, I wonder whether I could seek clarification that the vote cast for United Future was 2 votes in favour.

The CHAIRPERSON (Hon Marian Hobbs) Link to this

The question is that clause 1—

JOHN HAYES (National—Wairarapa) Link to this

I was polite, and held back because of the seeking of leave caused by the noise of some members on the floor, which did not enable the three people at the top table to hear the vote that was cast.

I rise again in support of this legislation, and I would just like to draw the Committee’s attention to a headline in this morning’s Dominion Post:“Kiwis get half the pay of Aussies in same jobs”. Madam Chairperson, you might ask: what is the relevance of this to the legislation before us today? It comes back to a point that I made when I spoke previously. This is common-sense legislation, and therefore National is supporting it. If we run this country in a common-sense way, with a light bureaucratic touch, we will create conditions that will enable us to keep Kiwis in New Zealand and will enable us to help increase people’s pay by cutting their taxes.

As we think about making this country a better-run place, we want to have pragmatism. We want pragmatic Government policies in this country because we want our communities to be well governed. The first part of this legislation helps us to adopt a more pragmatic regime in respect of the forfeiture and seizure regime contained in the Act.

The second area where we need to cut down bureaucratic overhead costs is underlined in this legislation by allowing the Customs Service management to be flexible about where it locates its staff. Clearly, it will keep most of its staff in the bigger centres where there are a lot of craft—both air and sea—coming and going, but it also enables the Government to operate good, friendly policies by sending staff, where it makes sense, to small locations, as I have said, like Houhora or Milford.

The third element of this legislation is that the Government has to be funded—there is no question about that. Taxes have to be charged. But as a Government we must make the smallest possible impact on our communities—often, as in my case in the Wairarapa, where people earn quite low incomes. When we take money from their pockets, we have an absolute obligation to make sure that that money is well spent. I am comfortable with this legislation because it will help us to do that. I hope we can do that across the whole gamut of legislation in this Parliament, not as we have seen in this last period under urgency with the emissions trading scheme, the affordable homes legislation, which will not make homes any more affordable, and the real estate agents’ legislation. Those are bills about theatre, not substance. In contrast, this bill is about substance, not theatre. I absolutely think that it is important that all parties in the Chamber embrace this legislation, because it is an example of good legislation. It will help us to run this country better. It will have a smaller impact on the pockets of individuals, and provide a far more flexible way of imposing bureaucracy on our communities. I absolutely support this legislation, and again commend the Customs Service officials who have helped to prepare it. Thank you.