Customs and Excise Amendment Bill (No 3)

Hon RICK BARKER (Minister of Internal Affairs) on behalf of the Minister of Customs) Link to this

I move, That the Customs and Excise Amendment Bill (No 3) be now read a third time. This bill has been through its second reading and the Committee stage, and now has its final reading. It has received widespread support from the House because it seeks to reform the statutory review rights in the case of the forfeiture and seizure of goods under the Customs and Excise Act, it gives the Customs Service a greater flexibility to deal with ad hoc arrivals, and it gives better control over illegal operations.

One of the key decisions of the Foreign Affairs, Defence and Trade Committee, which has now been agreed to by the Committee, is to set in statute the amount of tobacco that a person can have for personal use. Rather than the amount for personal use being set by delegated legislation, it has been set at 15 kilograms. Just to put it on the record, that amount equates to, I am told by the Ministry of Health people, 58 to 103 cigarettes a day for 365 days. I am not saying that amount will now be compulsory, but one would have to say it is on the generous side. So 15 kilograms of tobacco will now be in law, once this bill has passed, as the maximum amount defined as being for personal use and that clarification will be very helpful to the Customs Service when it is dealing with these issues.

I commend the bill to the House.

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

Like the Minister, I, on behalf of National, also support the Customs and Excise Amendment Bill (No 3) in the third reading. As the Minister has just said, the bill basically tidies up three areas of the Customs and Excise Act: forfeiture and seizure, provision of greater flexibility for customs with ad hoc arrivals, and a remedy to legislate for inconsistencies relating to illegal manufacture of tobacco.

I will touch on the forfeiture and seizure part of the legislation for a start because I have a real and practical example of how the legislation, as it was before the amendments, could get the Customs Service bound up in something it did not really want to be involved with, and there were some innocent victims in that.

In Taranaki the Taranaki Rescue Helicopter Trust, which of course is publicly funded and privately funded from fund-raising activity for health services in that region, bought some night-vision goggles about 6 or 8 months ago—in fact it is longer ago than that; it is more like 12 months ago. The goggles were about to be delivered to the rescue helicopter service when they were found to have been stolen in the US by a US military person. Of course, the Customs Service did what it must do and seized those goods with the intention of holding them until the legal position was established or tidied up, and that went on for a long time. The Taranaki Rescue Helicopter Trust had bought the goggles in good faith off a New Zealand person who traded in this stuff and who had no idea they were stolen in the US. Finally, through negotiation and after some time, the trader of this equipment, as I understand it, was able to resolve the legal status in the United States. That status was that the military was paid for the goods, or they came to some arrangement—I am not sure of the detail—but because of the legislation in New Zealand, the Customs Service was still unable, as I understand it, to make a speedy or timely decision to have these goggles released to the rescue helicopter. Of course, the helicopter trust had spent something like $40,000 or better on purchasing this equipment and it was out of pocket and did not have the equipment.

If the Chief Executive of the Customs Service had the powers that he or she will have, then a common-sense decision or intervention at that level potentially would have overcome this problem. That is a practical example of one case where there were no guilty parties except for, obviously, the person who stole the equipment from the US military in the United States in the first instance and who was subsequently proven to have stolen it.

Ad hoc arrivals have been of concern for a while. I think someone in the Committee stage of the bill touched on the fact that people arrive here by all sorts of craft—by pleasure craft, by aircraft in big numbers, and suchlike. The discretion to say that the beach at Ōpunake—or it might be Raglan, or Kāwhia, or somewhere else in the great Taranaki-King Country electorate—can be a customs place for the purpose of the arrival of a pleasure craft is at times a useful and necessary requirement. As I said in the second reading, the only concern I have is whether we will be able to meet the stringent requirements that we must meet regarding biosecurity, otherwise we are liable to open our borders to further risk. I am confident that concern will be able to be met, but we will have to watch and see. I suspect that, at some stage in the future, there will be further debate in this regard in this Parliament. Maybe some amendments or some further resourcing will be required to meet that concern.

The final point covered in the bill is the control for the exemption of personal tobacco. I now know, as a result of the good work done in the select committee, that it is known as “chop chop”. Plenty of people have suggested that I should chop-chop and get moving a bit, and sometimes when we listen to debates in the House we could certainly come to the conclusion that members should chop-chop and move on. But tobacco is referred to colloquially as “chop chop” and the reality is that the select committee has done a good job, no doubt ably assisted by the officials, who clearly have done a good job in helping the Minister draft this legislation to submit to the House and the select committee in the first instance. They have done a good job, a practical job, and a pragmatic job in coming up with a solution.

I note that the original proposal was for 8 kilograms of tobacco to be exempt. The select committee has extended that to 15 kilograms. The Labour Party put in a minority report and one can only conclude that it was clearly not happy with 8 kilograms. Ministers obviously wanted a higher volume than that, but I know my colleagues on the select committee—the anti-smokers that they are—probably would not have been supporters of that. But in any event, the end result is that the figure is now 15 kilograms and that seems like a pretty practical solution. It is one that will not tie up the customs staff and officials in needless trivial pursuit—as someone described it, and I thought it was a very good description—out there trying to find out if someone has grown a kilogram or two or four or half a kilogram more than he or she was legally allowed to. Fifteen kilograms should cover the domestic needs of even the heaviest smoker in society. Potentially, if a person smokes 15 kilograms of tobacco annually, that person will not be around for that long to breach customs laws in the future, according to medical science. I think it was probably the right figure to arrive at, and it is a pragmatic decision. Thank you, Mr Assistant Speaker.

MARTIN GALLAGHER (Labour—Hamilton West) Link to this

I would certainly like to take a long call on the Customs and Excise Amendment Bill (No 3), and I know that the Leader of the House would support my doing that, but I am not going to; I am going to be quite concise.

The Foreign Affairs, Defence and Trade Committee consideration of the bill was very interesting. There was a bit of to-ing and fro-ing with regard to the tobacco exemption, and what we have come up with is a compromise, which is, obviously, accepted. There are some serious health problems around tobacco consumption. I acknowledge the point Mr Ardern made that people who push the limit of the exemption for personal consumption over a few years would not be around for long to enjoy it! Dare I say it, that is a point I note.

The bill tightens up a few things. It amends the Customs and Excise Act in relation to appeal and review rights under the statutory forfeiture and seizure regime, ad hoc arrivals and departures, and the illegal manufacture of tobacco—which has been talked about. I thank the select committee and the officials for their work. This legislation is a good step in the right direction and tidies up what have been a few anomalies in the past. Thank you, Mr Assistant Speaker.

TIM GROSER (National) Link to this

I still have not quite got used to the idea of getting up in rapid succession and making essentially the same points. It is an added problem, of course, when one does it under urgency, as there is not even the grace of time to separate the points. Nevertheless, it is part of our duty, and I will discharge it, but in a very brief and expeditious way. The key point is that the Customs and Excise Amendment Bill (No 3) is first-class legislation and a first-class example of cooperation among political parties at the select committee process. Frankly, that is a rare jewel and we should celebrate it. We should celebrate it because if we could adopt the same common-sense and practical approach across other areas of policy, I am sure we would still find room for the political contest to proceed, but I think the country would be better for it.

We have something that involves Draconian powers of the State. They have to be exercised by customs officers on behalf of, I think, 15 agencies. They perform vital functions in keeping our society as safe as they can. But equally there have to be very strong controls over the appeal process, over the rights of citizens to challenge the forfeiture of goods, and so on and so forth. But the point that particularly impressed me about the common-sense approach to lawmaking relates to the personal exemption issue of home-grown tobacco. It is such an important point for lawmakers to bear in mind that our front-line police and our front-line officials in other areas of enforcement will always be very thinly stretched. We know that. We know how much better it is if they focus on the real problem rather than, frankly, wasting their time with minor or technical infringements.

There was a huge debate on the 15 kilogram limit. My recollection was that the difference of view between Labour and National was actually not so much over the limit, as such, but simply over whether it should be enshrined in legislation or left open to the officials to change the regulations. As members know, National has a view that that is generally the wrong approach. We like Parliament to set clear laws and stick to them, and if they have to be changed they should come back through the parliamentary process. I do not believe that there was a fundamental difference between the two parties on the underlying philosophy of setting the limit relatively high—at 15 kilograms, which is the same as Canada—precisely to ensure that the thin blue line is actually focused on the real problem. The real problem here, because of the literally millions of dollars that one can make from selling illegal cigarettes on which excise tax has not been paid, is the link to organised crime, and in other countries—I am unaware of this being an issue in New Zealand—the link to terrorism.

So there are big issues behind this legislation. It is a nice simple law and there are nice procedures for the chief executive to move expeditiously without needing to consult a dozen different departments, and somebody like me, who has been in the system, knows how much this consultation costs. Everyone says yes to consultation without thinking about the costs of consultation. When one often needs officials to act on their hunches, on their instincts, and sometimes, of course, on intelligence that will never be all that accurate—it is never all that clear, I am sure, to some of our people on the front line just how solid the intelligence is that they are operating on—one has to give them wide powers to move brutally and quickly to deal with the problem. Yes, there will be mistakes. We have a procedure in place giving responsibility to the chief executive of the Customs Service, and no doubt he or she will use delegated powers to handle that responsibility in a sensible and pragmatic way to look at the overall facts when there are mistakes or the public thinks it has been badly treated. It is good legislation, and the House should be very pleased to see it pass into law.

PETER BROWN (Deputy Leader—NZ First) Link to this

I say to Tim Groser—I know he is relatively new; he has been here for only a couple of years—that there is no law that says members have to say the same thing twice. One does not have to get up in the first reading and then say exactly the same thing in the third reading. I thought he might be interested to know that. I say to the next National Party member to take a call that there is actually no law that members have to take 10 minutes on a bill such as the Customs and Excise Amendment Bill (No 3). It is straightforward, it is nice, it is tidy, and it has gone through this House with a very significant majority.

The only concern I have with this bill is that the Māori Party has put it on record that it is opposed to it—it has opposed just about every part of the bill—yet the Māori Party members have not taken a call as yet to explain why. I think there is a responsibility on all MPs that if they are opposing something and insist on having that put on the record, they should at least stand in this House and say why. There is no problem with New Zealand First. We are totally in support of this bill. I hope the Māori Party takes a call and explains its position. I think it owes it to the House and it owes it to listeners out there who might be listening or watching on TV. New Zealand First supports this bill.

JOHN HAYES (National—Wairarapa) Link to this

The Customs and Excise Amendment Bill (No 3) is about border control. A good bit of my electorate covers the borders of this country. It stretches from Turakirae Head across on the other side of Wellington Harbour, almost up to Cape Kidnappers. It is very important for the people in my electorate that we have good, sound border control, and it is very important for the well-being of the people in my electorate that we have good, common-sense Government. If we do not, New Zealand is left with a choice of becoming either a retirement village or an educational institution for other countries. More than 80,000 people a year leave this country because of bad governance, because taxes are too high, and because wages are not high enough—as reinforced in this morning’s Dominion Post by the headline “Kiwis get half the pay of Aussies in same jobs”.

That is why I support this legislation. It is good legislation. It is not the theatre of the emissions trading legislation, it is not the theatre of the Real Estate Agents Bill, and it is not the theatre of the legislation that we were discussing this morning, the Affordable Housing: Enabling Territorial Authorities Bill, which the Government pretends will provide affordable homes to people in my electorate. That will not happen.

It is really interesting what one can learn when one trawls through the impact of this bill on other legislation. In particular, I have some comments that I would like to point in the direction of my colleague from New Zealand First Peter Brown. I draw his attention to sections 10A and 10B of the Protected Objects Act 1975. They are about the importation of protected foreign objects. One is not allowed to bring them into the country. This is the point: if a protected foreign object is in this country, a foreign Government has 3 years from the time it knew about it to instigate court proceedings to reclaim that item, or 50 years from the date that it was brought into this country. I make that point because I think we need to revisit the issues around our own electoral funding arrangements. Where political parties try to mislead the public of this country, a law that gives only 6 months for them to be fined for their actions is patently not strong enough. I think the next Parliament needs to come back and look at the Protected Objects Act, and work out how we can have laws in this country that protect the integrity of our electoral process and the funding thereof—something that we have not seen recently in the case of our colleagues in New Zealand First.

Coming back to the legislation before us this morning, I would really like to reinforce the point that we need to put far more effort into improving our legislation across the board. Only by having good legislation and good governance in this community will we keep people in this country. From the perspective of people in the Wairarapa, where I live, I think the first thing our people want to see is reduced taxes. That also applies to excise tax, because our winegrowers around Martinborough, Bideford, Matahiwi Valley, and north into Hawke’s Bay are paying far too much excise tax, which is targeted to the inflation rate. In years of low production—and we have had a couple of bad droughts—it puts a huge imposition on our winegrowers. When I see that happening, and when I think about it in the context of the excise tax on tobacco that we are collecting through the Customs and Excise Amendment Bill (No 3), I think there is room for tidying up our act on behalf of our winegrowers.

We need to reduce the quantity of Government intrusion into the lives of people every day. This legislation will do that. At one level, we are doing it by allowing the Comptroller of Customs to make sensible decisions about the disposition of the service’s resources in order to quickly protect our border. On the other hand, we are also being very straightforward in putting into this legislation the penalties that will apply to people who infringe the law. As I pointed out in the House earlier today, that approach does not apply to our alcohol legislation, where penalties can be fixed very quickly by bureaucratic fiat. That has to be stopped. Our next Parliament needs to tidy up the legislation in terms of the penalties that apply to people who infringe our law as it applies to alcohol. We must get rid of the nanny State, because if we do not, we will find that people will continue to vote with their feet, as they have been doing. I think this legislation is a very good example of how we can do something sensibly. We need to apply this model to many other sections of our legislation.

With those comments, I thank my colleagues on the Foreign Affairs, Defence and Trade Committee for the way that this legislation was considered and put together. I also thank the officials, who did a very good job in answering the many questions that our select committee raised in our consideration of this legislation. I commend the bill not only to the House but to the people of New Zealand as an excellent example of good law.

KEITH LOCKE (Green) Link to this

The Green Party is supporting the Customs and Excise Amendment Bill (No 3). We were actively engaged in the Foreign Affairs, Defence and Trade Committee’s consideration of all the various matters, including the personal exemption limit for home-grown tobacco. We heard quite detailed submissions from the Customs Service that an 8-kilogram limit would be the most appropriate. Unfortunately, the majority of the committee went with 15 kilograms, but we think an 8-kilogram limit would have led, perhaps, to less abuse and trading, and more of a reality of home-grown production being only for personal use. We are disappointed with that 15-kilogram provision, but as for the rest of the bill, we are satisfied that it does improve the ability of the Customs Service to clamp down on the illegal importation and trading of tobacco, which is a harmful drug.

TE URUROA FLAVELL (Māori Party—Waiariki) Link to this

Tēnā koe, Mr Assistant Speaker, i tēnei ata. There is always a risk that, with the rush of urgency, some minor technical amendments will slip under the radar, as it were—and that has wide-ranging repercussions. We have seen this in the last 24 hours with the reaction from employers about the changes made regarding KiwiSaver and the Employment Relations (Breaks and Infant Feeding) Amendment Bill. Employers are saying that the amendments to the Employment Relations Act introduced yesterday represent a major change to employment law, which means they will now have to review their pay arrangements to ensure they are not in breach of the law, and potentially exposed to a personal grievance claim from one of their staff members. We need to be far more careful when the bill under examination has received, as in this case, only one submission at the select committee hearing. So, with all these warnings in place, we have examined carefully the potential impact that the Customs and Excise Amendment Bill (No 3) could have.

As far as the Māori Party is concerned, the bill makes a number of amendments to the Customs and Excise Act 1996 to enhance the statutory appeal and review rights in relation to the forfeit and seizure regime. A particular issue of interest to us in the Māori Party in the examination of this bill was the personal use exemption on the growth and manufacture of tobacco. The amendments in this bill will give customs better control over the illegal tobacco manufacturing operations, and that is all good. However, the bigger picture is one of banning the sale, manufacture, and importation of cigarettes so that there is no industry or Government incentive for smoking.

The Māori Party has stood strong in its vision to end the sale of cigarettes and smoking tobacco. We say that vision without action is but a dream, and in our case it is more like a nightmare. Smoking kills one in three Māori, for goodness’ sake. Why the heck would we support a bill that kills Māori? Is this first-class legislation? I do not think so. Perhaps the Minister should have broken up the bill a little in order to separate out the part in respect of the issues we are raising at the moment. The tyranny of tobacco over the lives of tangata whenua has a long history in Aotearoa.

JOHN HAYES (National—Wairarapa) Link to this

I seek leave of the House to table an excerpt from this morning’s Dominion Post headed “Kiwis get half the pay of Aussies in same jobs”.