Border (Customs Excise and Tariff) Processing Bill — First Reading 
Border (Customs Excise and Tariff) Processing Bill — First Reading 
[Volume:658;Page:7113] 
Border (Customs Excise and Tariff) Processing Bill 
First Reading 
Hon MAURICE WILLIAMSON (Minister of Customs) 
: 
 I move  
That the Border (Customs Excise and Tariff) Processing Bill be now read a first time. 
 At the appropriate time I will move that the Border (Customs Excise and Tariff) Processing Bill be referred to the Government Administration Committee that the committee report finally to the House on or before 16 November 2009 and that the committee have the authority to meet at any time that the House is sitting except during oral questions during any evening on a day in which there has been a sitting of the House and on the Friday in a week where there has been a sitting of the House despite Standing Orders 187 and 190(1)(b) and (c). 
The bill is an omnibus bill and it amends the Customs and Excise Act 1996 and the Tariff Act 1988. It 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 those 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 or administration generally. The bill contains three sets of amendments to improve the effectiveness of the Customs and Excise Act and to meet Government policy goals. These are amendments related to the automated passenger processing system which is now known as SmartGate six amendments to clarify and enhance the Act and eight other amendments to address legislative gaps and uncertainties. 
In today’s international travelling environment we are faced with threats to our personal security. Those of us who travel internationally are well aware of the various security measures that we must now comply with whether it is to protect New Zealand’s biosecurity aviation security or immigration laws or whether it is to protect the New Zealand community from for example firearms and offensive weapons and controlled drugs. Those obligations on the travelling public have resulted in longer waiting and processing times at airports. To counter that this Government has announced that low-risk Australian and New Zealand passport holders will enjoy a faster more streamlined exit through border processing at Auckland Wellington and Christchurch airports. As part of that automated processing through the SmartGate system will become an option for travellers who hold either an Australian or a New Zealand e-passport—that is an electronic passport; the old technology ones will not work. 
In reviewing the Customs and Excise Act to take account of SmartGate customs 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 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 objectives to improve the border crossing experience for trans-Tasman travellers. SmartGate will enhance the role of customs officers at the border as front-line customs officers will be able to be redeployed to the secondary line where intervention with high-risk passengers occurs. I emphasise that SmartGate cannot and will not be a substitute for the observation skills and the vigilance employed by trained customs officers working at the border. 
Six amendments are included in the bill to clarify and enhance the Act especially in relation to strengthening customs law enforcement capability. The amendments are firstly to enable customs officers to search a vehicle whether it is being operated or is unattended and to give them the ability to use reasonable force to gain entry to effect the search of the vehicle; secondly to create a power to arrest any person committing an offence punishable by imprisonment under the Act whether or not that person is on a craft; thirdly to provide that duty on goods manufactured other than in the manufacturing area becomes due immediately upon the manufacture of the goods; fourthly to create a new offence of making a false allegation or report to the Customs Service that an offence has been committed knowing that the statements are not true or making statements with the intention of wasting or diverting personnel or resources; fifthly to enable customs officers to utilise future technology in those provisions that relate to the detection of tampering or interference with goods containers or packages; and sixthly to provide the Customs Service with the ability to require payment of debts within the 20-day time period where it receives advance warning that the company has a dubious financial situation and that payments by the due date will be unlikely. 
The bill also includes eight minor amendments to the Act aimed at addressing legislative gaps and uncertainties including 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 of the customs and excise regulations to be incorporated by reference to relocate the alcohol personal use exemptions from the Customs and Excise Regulations 1996 to the Act to allow the chief executive to nominate non - customs officer employees to lay information to allow for the suspension of a registered users’ registration to clarify that the chief executive can grant further time for 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. As I said there are eight amendments but they are all reasonably minor and they tidy up some things in the Act that needed some clarification. 
The bill contains amendments to the Tariff Act 1988 primarily to allow for faster and more efficient implementation of tariff reductions arising from our trade agreements by firstly allowing material usually set out in tariff amendment orders to be incorporated by reference and secondly by making the working tariff document maintained by the New Zealand Customs Service the legal tariff. 
Following amendments to the Tariff Act schedule 3 of the Customs and Excise Act is replaced by 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 a litre effective on 1 October 2010. I commend the Border (Customs Excise and Tariff) Processing Bill to the House. 
Hon CHRIS CARTER (Labour—Te Atatu) 
: 
 I rise to speak on behalf of the Labour Party and to say that we will be supporting the Border (Customs Excise and Tariff) Processing Bill to go to a select committee. We hope that through that process we will see some smoothing out of some of the issues that members of our party sitting on the select committee will undoubtedly focus on. 
As the Minister of Customs Maurice Williamson has just said this bill amends the Customs and Excise Act of 1996 and the Tariff Act of 1988. It allows as Mr Williamson has just said the introduction of an automatic passenger processing system the so-called SmartGate and ensures that automatic systems can be used in place of customs officers. On the one hand I guess that the challenge of the Customs Service is particularly as New Zealand is a leading agricultural nation that is largely pest-free to keep our borders safe from certain agricultural diseases. Foot-and-mouth disease comes immediately to mind but a whole host of other nasty things like fruit fly and so on could impact on our horticultural beef and dairy industries. So customs is there to keep the borders safe. It is also there as Mr Gerry Brownlee mentioned when he said we want something— 
Hon Clayton Cosgrove 
: He’s not a fruit fly. 
Hon CHRIS CARTER 
: No he is not a pest and I tell Mr Cosgrove he is far too large to be a fruit fly. He talked about the need for our luggage to come through quickly. I think we all had an image of Gerry standing by the turnstile as the bags came through. But in a sort of facetious way he is right. With our growing tourism industry we want the Customs Service to have processes and technology that make landing at and departing from an airport a positive experience. SmartGate will come in and technology will replace customs officers who will then be in the second line of defence. 
Hon Trevor Mallard 
: Doesn’t this member have an interest in this bill? 
Hon CHRIS CARTER 
: I am pleased that a former Minister of Education has complimented me on the sterling work I did in promoting New Zealand as a destination for international students. I thank Mr Mallard; I was very pleased to do that and proud to be a representative of our country. 
One of the things I was always impressed with when I landed at Auckland Airport especially our international terminal was the efficiency and friendliness of our customs officers. Now they will be replaced in the front line by this SmartGate technology and we will see the processing hopefully as an efficient fast service that is also safe. The bill also creates new opportunities to deal with new offences to amend existing legislation to make it up to date and modern and to deal with issues as they come up in the policing of the Customs Service. 
However we are concerned about some issues around biosecurity. Although we applaud the move to improve technology to make a more effective and efficient Customs Service we note that one of the first decisions of the new National-ACT Government was to make 50 workers redundant in our Customs Service. It seems a strange paradox and contradiction that on the one hand we are getting lectured about the importance of keeping New Zealand safe and on the other hand 50 workers are being laid off from the Customs Service. Also the Labour Opposition feels that the National Government took a rather token approach to consultation particularly around these redundancies in the Customs Service. The cuts were very arbitrary. I guess they were very similar to the cuts that have taken place in education—not just in adult and community education but in the wider education sector. You know I can remember as Minister of Education before the election going around the hustings and hearing from National candidates that we would not see any redundancies in front-line services we would see no civil servants laid off and we would just see a sinking lid on retirements and people leaving. In the Customs Service 50 have just been laid off and they are the tip of the iceberg of the many redundancies that are taking place within the civil service. We are not talking about policy analysts or those back in the depths of the main offices of the Customs Service; these are front-line officers trying to keep New Zealand safe keeping out those horrible agricultural diseases and other things that can come in stopping people smuggling and doing all of the other fine jobs that customs officers do. Last year New Zealand’s biosecurity staff dealt with 86 incursions of unwanted pests and organisms. Now fewer staff will be charged with protecting our borders. 
Hon Trevor Mallard 
: What did Gilb say when he was trying to use the word “organisms”? 
Hon CHRIS CARTER 
: I am not going to go there I say to Mr Mallard. He might be more familiar with that than I am. 
Last week I was in Samoa with my colleague Luamanuvao Winnie Laban visiting the tsunami-ravaged villages. We of course went to every village. We were there for 4 days and we provided real support to the people. I met a customs officer while I was there—I will not name her—and she said that they had done a sample test of containers coming in because they had been instructed that under this new regime of ours they would look at fewer containers. Indeed at the port of Tauranga I understand that they are looking at hardly any. Looking at these containers they did a sample to see how many coming in from Australia had agricultural pests in. Something like 40 percent contained unwarranted organisms—an astonishing number. That was just a sample. That is an indication of the practical consequences of reducing front-line staff. Sure SmartGate might be great but if our containers are not being looked in if agricultural pests are coming in that are not being picked up then New Zealand—not just our agricultural sector but the whole of our country—will be the poorer for it. 
Opening up borders means that we should be increasing surveillance at the borders; we should not be reducing it. One of the things that Mr Key said on  
Q+A 
 I think the week before last was that $3.57 million was being removed from the budget of border control. Again it comes back to the question of border security. Nothing is more important than the protection of our agricultural industries. In the 5 years that I spent as Minister of Conservation I knew that one of the issues that Department of Conservation staff constantly dealt with was the impact on our natural environment of alien pests. I can remember for example fire ants coming in from Australia. Two colonies were discovered one in Auckland and the other in Napier and both of these colonies had successfully established themselves. They were eradicated by Department of Conservation staff but they were nevertheless examples of some of the organisms that can come in. 
It is not just terrestrial organisms that can be a problem. We have already had issues of marine pests coming into our ports;  
Undaria 
 is an extremely invasive seaweed that has entered some of the harbours in the southern part of the South Island. It is a considerable pest in North America. It is an endemic species from east Asia. That pest will be just the tip of the iceberg with increased shipping and the increased number of containers being brought to New Zealand. We will face the problem both of insect and plant pests and also of marine organisms being brought in and not being dealt with appropriately. 
To sum up we are in favour of this legislation. We think it should go to select committee. We are not in favour of cuts to front-line services in the Customs Service. We see the Customs Service as the front-line defence of our country. We want effective and efficient systems at our ports and airports so that the tourists can be facilitated through with ease but also with safety. Primarily the issue is not just about making it easier to get in and out of New Zealand and making it a pleasant experience; it is about first and foremost making our country a safe place. Technology can help but reducing the number of customs officers certainly does not help. 
Hon GERRY BROWNLEE (Minister for Economic Development) 
: 
 I think there are only two questions that the previous speaker Chris Carter has to answer. The first is whether it is true that his is the face of the new captain on the Flight Centre ads given his extraordinary experience of travelling around the world. Or is he perhaps going to retire to a Holiday Shoppe franchise once he leaves Bowen House? Everyone knows what a huge traveller this particular man is. And can he confirm that he has actually written to the Minister responsible for this bill asking whether he can have Fly Buys points for the amount of times he uses SmartGate as he travels around the country? The only thing he has going for him is that these days as we travel internationally increasingly airlines are looking at gross weight per passenger. In his case he can take huge Samsonite baggage; in my case of course I get a brown paper bag with two handkerchiefs inside it. So he is somewhat at an advantage in speaking on this bill because he knows so much about travelling and the experience of going through various countries’ borders. But we can assure him that his support of this bill will mean that the experience is a lot better when it comes to crossing the Tasman in the future. 
I will just pick up on the issue of biosecurity which the member Chris Carter quite rightly highlighted as being a major concern for this country. But I point out that all of the incursions he just spoke of occurred during the term of the last Labour Government. I mention that not to point a finger but simply to say how difficult this particular issue is and to put on record the case for the National-led Government continuing to do whatever is necessary to ensure that New Zealand has as strong and as well-protected borders as are possible. I look forward to supporting this bill later in the proceedings. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 That was an invaluable contribution from the Leader of the House. I recall that he is the only man whose best friend is David Henderson. In the  
Press 
 Gerry Brownlee was described by somebody not by Dave Henderson as the third most powerful man in New Zealand and then his best mate Dave Henderson in the same article said that he was “a nice guy but a complete waste of time.” No no I am wrong. “Completely useless” was the quote. 
Hon Gerry Brownlee 
: I raise a point of order Mr Speaker. I take great offence at that and particularly at the claim that that particular gentleman is my close best friend. Everyone knows that one of my best friends is “Leonard the Refrigerator”. 
Mr DEPUTY SPEAKER 
: I will not accept that. 
Hon CLAYTON COSGROVE 
: I take no offence. His other best friend is Ronald McDonald. 
Mr DEPUTY SPEAKER 
: I ask the Hon Clayton Cosgrove to continue. 
Hon CLAYTON COSGROVE 
: That is Gerry Brownlee who will probably be the only person who will never be admitted through the SmartGate given the wonderful management he exhibits in this House. I cannot recall which colleague it was who said at the start of this parliamentary term that Gerry Brownlee will go down in history as the person who lost the confidence of his own side as Leader of the House the fastest due to his great management. We are debating the Border (Customs Excise and Tariff) Processing Bill under urgency because Gerry Brownlee could not get the accident compensation papers sorted in time. He is one gentleman who I do not think will ever be admitted through the SmartGate. There may be a different gate for him—one where three four five or six customs officers may be employed to frisk him because it probably would take half a dozen of them to do so. 
Let us get back to the substance of the bill. Labour supports the bill. I have used SmartGate a couple of times. I asked Maurice Williamson whether they are in every state in Australia. I have been through the SmartGate in Victoria a number of times recently. It is a very very good system. I do not think anybody would argue with the use of technology in this area. This is a solid bill that does a number of very very good things. 
I want to reiterate some of the very substantial concerns that were raised by Mr Chris Carter regarding biosecurity. In the same week that we are debating this bill the Government has announced its huge crusade against P which Labour supports apart from a number of penetrating questions we have about the resources to back up the rhetoric and the commitment. Everybody believes we should get that scourge off the street and Labour supports the Government in that move. But in the same week as we are debating this bill about customs the Government has launched its crusade against P. When we drill into the detail we ask how the measures contained in this bill will be resourced and therefore how will those measures contained on the war against P involving customs be resourced? We know that as the Customs Service is being asked to step up to the plate and commit to the war on P by further securing our border and as it is being asked to step up to the plate with the new provisions in this bill in respect of the functions of customs officers and at the same time as we are asking more of our Customs Service as my colleague said 50 front-line staff in the biosecurity area have gone. They have been axed; they are out. 
David Shearer 
: 56. 
Hon CLAYTON COSGROVE 
: My colleague says it is 56 and I thank him. It is over $3 million in cuts that the Government calls savings. Judith Collins calls $21 million of cuts savings except the Canterbury district commander disagrees with her. There has been over $3 million worth of cuts to the Customs Service. It will be under-resourced. We now know that it will be flicked around to set up some sort of flying squad in respect of P and there will not be extra resources for customs. 
Paul Holmes did a very good thing on  
Q+A 
 when he questioned Mr Key about the $3 million cuts to the service. Mr Key slipped right past it and said he did not want to get that confused with the money being put into rehabilitation. I say that it is good to put money into rehabilitation but he never addressed the inherent cuts financially and in terms of personnel. I invite members opposite to have a look at a tape of  
Q+A 
. Mr Key never addressed that issue. Although Labour supports this bill we think there are some real worries in respect of the implementation of what will be an Act of Parliament. Over $3 million has been cut out of the Customs Service budget and over 50 biosecurity officers are gone. 
We have heard a lot from Government members over the last 9 or so months. We have heard this great line about moving resources from the back office to the front office. In this case the Government has removed resources from the front office to the exit lounge. The Government has taken resources off the front line of the Customs Service and taken them out the door. I am sure the Minister of Customs might get up and say “Hang on” as Judith Collins always does about the police when we front her like we do other Ministers and ask “Will Ministers take responsibility if there is a degradation in service or a delay in service because of the Government’s demand to cut money out of budgets?”. Maybe the Minister will break the mould and get up and say that he will take responsibility if there is a degradation of service an incursion of a pest an incursion of foot-and-mouth disease or an incursion of something terminal to our economy. 
In biosecurity terms we know that the way to crash our economy given our reliance on primary production would be tragically the introduction of some sort of terminal disease like foot-and-mouth disease or some other disease. Maybe Maurice Williamson will get up put up his hand take the pledge and say that he will take responsibility for the 50 biosecurity officers who have gone and the $3 million cut out of the budget. At the same time he is asking the Customs Service to step up to the plate in respect of this legislation. At the same time the Prime Minister is asking the Customs Service to do more with less. 
Mr Williamson would be the first Minister to say that it is not an operational matter if this turns to custard or if there is an incursion because he will stand up as Minister and say “I will take responsibility.”—unlike his colleague Judith Collins who was asked the same question at the police estimates hearing. Did she take responsibility for the $21 million cut for the degradation in service and for the risks associated with that? What was her reply? She said “Oh that’s an operational matter.” as every other Minister does. But I say that that loyal member of the executive Maurice Williamson may well break the mould of this Government and say he will take responsibility if the cuts that he and his Government have imposed in terms of front-line front office staff and dollars out of the budget create an incursion or worse in this country. 
Although Labour supports the bill it is a bit like the P debate which Labour also supports. Who would not support the war on P? Despite some silly comments from Judith Collins and others that we do not support it we do. But we were the first political party as we are today with this bill to raise questions about the gap between the rhetoric in terms of how these measures will be implemented given they are asking departments to do more with fewer resources. 
Colin King is a member who represents a farming electorate. I am told that he is not a bad MP from time to time when he is there. He is a farmer and he will know the devastating effect on his farm and his constituents’ farms in rural areas if we had a biosecurity incursion. Colin King may want to take a call and tell us whether he will take responsibility for his Kaikoura constituents and go to his farming folk and explain to them why it is that there has been an incursion—God forbid. It is because he and his Government cut the Customs Service budget and got rid of 56 biosecurity officers. There is a gap. [ 
Interruption 
] I heard a deflation of air from Mr Hayes. It was a bit like somebody had popped a large balloon a hot air balloon. 
Mr DEPUTY SPEAKER 
: Order! 
Hon CLAYTON COSGROVE 
: It is all right. I do not need protection from the “Michelin Man” over there. But maybe that member who comes from a rural constituency the Wairarapa as he deflates—there might be an oxygen bottle out the back somewhere—will go and talk to his constituents and take responsibility. Those members do not treat this as a serious issue. Well we will see. Will he go and tell his constituents why he and his Government cut the front-line biosecurity staff down by 50? I do not think he will. Those staff go to the border and guard the border—that is what they do. They secure the border from a number of pests and diseases some of which Mr Hayes may be personally interested in and have great knowledge of. Perhaps there are some sitting behind him. 
I support the bill. I think the SmartGate technology is fantastic. I think it will be more efficient between the borders but I invite Government members to stand up and take responsibility for the cuts in the Customs Service. 
KEVIN HAGUE (Green) 
: 
 I would like to say that it is a pleasure to take a call on the Border (Customs Excise and Tariff) Processing Bill but I have to say that it is not. The Green Party was not advised that this bill would be coming up and it is one that we have not seen before. I had my first look at it approximately 5 minutes ago. That is not a good enough process; it is an affront to democracy. It is a process used by this Government because it wishes to avoid debate and scrutiny of the bill at its first reading. I believe that is shameful and for this reason the Green Party will be voting against the bill. We will vote against it purely in protest against the process that has been used. We have not had the opportunity to scan the bill’s content and determine whether the content is worth supporting. 
In the few minutes that I have had when moving between my office and this House in which to scan the bill—and that is all I have been able to do—it seems to me to be a bill that like a number of Government bills does several things. Most of its content is unobjectionable. It closes loopholes. It deals with inadvertent consequences of previous legislation and processes and actually takes us further. But it also introduces the machinery of Government that is required for the SmartGate system. I want to spend just a few minutes commenting on that particular point. 
John Key as our Prime Minister has made a big deal over the 8-minute saving in travel times for people travelling across the Tasman and has justified the SmartGate system on that basis. But the point I make is that the SmartGate system as it applies to customs and to biosecurity involves a greater risk to this country. Controlling our border and guarding it against various types of risk—and virtually everything that takes place under that umbrella of customs and biosecurity is about guarding the border—is one of the most fundamental functions of any Government. In fact probably even those neocon philosophers that Steven Joyce no doubt reads at night—they would certainly put me to sleep—like Robert Nozick would say that protecting the border border security is one of the fundamental functions of Government. Yet what the Government proposes is a new approach to customs and to biosecurity that does away with the universal approach that we have adopted up to this point and substitutes an approach based on risk profiling. In risk profiling we say that we will not actually use our full process with all of the people coming through our border. We will say on the basis of what we know so far that we think this type of person is more likely to pose a risk and we will concentrate our resources on screening that person for customs or biosecurity risks. We will use a lesser process for those people who do not fit our profile. 
If I were a smuggler the first thing I would do is try to choose as my mule someone who did not fit the profile. Certainly the evidence we have seen from the trial that the Ministry of Agriculture and Forestry has undertaken in relation to risk profiling suggests that those who fit its category of low risk in fact nonetheless constitute some risk. If we focus our resources only on those people who meet our profiles as the Government intends to do under this bill with its SmartGate system and through its biosecurity measures then we will increase our risk associated with customs breaches and biosecurity breaches. We are not a nation that can afford to take those risks. 
This afternoon in question time I questioned the Government about some biosecurity risks we were taking around our totally unnecessary importation of palm kernel—the importation of a product from a country where foot-and-mouth disease is endemic. Malaysia has outbreaks of foot-and-mouth disease virtually every year. Palm kernel is a product that we import from Malaysia and we have it on reliable information that it comes to our shores contaminated by soil. Reliable information from Governments around the world—not including ours incidentally because we have not done any review of foot-and-mouth disease risk since 2002—identifies soil in which the virus can survive for many days as a vector for foot-and-mouth disease. In other words the disease is present at the product’s source and it is present in a vector that is a regular contaminant of a product that we import. We inspect shipments of palm kernel only visually which is a technique that cannot possibly detect micro-organisms. Our only method for controlling biosecurity risks in those shipments is fumigation at source with phosphine. We learnt that quite a number of our shipments somehow miss out on that process and that of the 312 shipments received some 38 which were supposedly fumigated at source none the less arrived in New Zealand with insects and on one occasion with a gecko. 
We know that the biosecurity precautions that we do take around palm kernel are pathetic for controlling even the pests that they are designed to deal with let alone the massive threat to our primary industries and indeed to our clean green “100% Pure New Zealand” brand with which we market ourselves for tourism and trade on in all of our primary industries. The threat to that brand is massive. Our Government’s response is to say: “Well you know we can’t be 100 percent sure about anything so rather than taking this risk seriously we are just going to keep the blinkers on and keep pretending that we can get away with this and hope and pray.” That is the approach that the Government is intending to take more broadly now not only on the issue of palm kernel but also on biosecurity threats from those products imported to New Zealand. 
Last year approximately 386850 shipping containers that came into New Zealand received no biosecurity inspection at all. This Government’s response to that situation is not to take it seriously. Instead it cut the funding to those departments it cut the staffing in these departments and introduced new systems that mean fewer people coming through our borders will be subjected to any kind of risk assessment or any kind of scrutiny. It is not good enough even for that reason alone let alone taking into account the fundamentally poor process that has been used in this case. The Green Party will oppose this bill at its first reading. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Assistant Speaker. Kia ora ano tatou katoa. As other speakers have stated a little earlier it is always a bit of a challenge with new legislation like this Border (Customs Excise and Tariff) Processing Bill which comes at us a little bit late in the piece and is perhaps not even up on the parliamentary website to give a really informed perspective on the legislation. Under normal circumstances the Maori Party caucus usually gets enough time to read over the legislation in depth to consult with all sorts of interested stakeholders to consider how kaupapa Maori applies and to benefit from a robust debate. It does not quite happen like that when legislation is introduced under urgency and the whole process becomes accelerated to such an extent that one hardly has enough time to get to grips with the original intent of the legislation much less with amendments such as these being tabled today. 
In the bill before the House we are considering amendments to the Customs and Excise Act 1996 and the Tariff Act 1988—both bills concerned with New Zealand’s border. Now of course all New Zealanders are very familiar with the work at the front line in protecting our country partly through I think the reality shows such as  
Border Patrol 
 which feature on our State television. And there could be no doubt in the House this week of the power of television in being able to educate inform advise and broadcast rugby all at the same time. The behind-the-scenes documentaries expose viewers to the procedures that operate within the areas of immigration customs and quarantine. Week by week there are examples made of the potential issues that can arise at our borders including illegal immigrants harmful pests and disease drug runners and such. So we understand the importance of improving border processing and administration of goods and people as required under the respective Acts. 
But there is a particular feature of this legislation that I feel a little bit duty-bound to highlight and that is the deliberate use of strategic branding to draw attention to issues such as corruption dishonesty and misrepresentation. This bill enters a whole new terminology into the lexicon of the English language—namely that of SmartGate. SmartGate as a brand takes its name of course from the Watergate scandal in American politics. Named for the Watergate office complex in Washington DC it resulted in the indictment and conviction of several officials in the Richard Nixon administration. Watergate has since then become associated with conspiracy theories secret tape-recordings Senate investigations cover-ups and so on. Across the seas we have seen the emergence of derivations of the Watergate theme: there was “corngate” in 2002 involving the suspected release of genetically modified corn seeds. We have had “paintergate” which involved a forged signature on a landscape painting. We have had “speedgate” and so on. Now we have SmartGate. So it is a clever use of branding to immediately bring up an association with crimes involving dishonesty. 
As other speakers have said SmartGate in this case is the name given to a new automated passenger processing system to be used at the border in the place of customs officers. We will of course be interested at the select committee to hear from the Customs Officers Association how customs officers feel about being replaced by these SmartGates and what the costs in real terms will be of the redundancies that might result. The legislation allows for the cancellation of a registered user’s registration to use a Customs Service computerised entry processing system. That is to cover for human error; if the person fails to comply with registration conditions or has been convicted of a crime involving dishonesty then he or she will not be able to enter the computer system. And that sounds pretty good. 
Once the SmartGate has been shut closed this bill introduces a whole range of measures to deal with would-be offenders. The bill creates a power to arrest any person committing an offence punishable by imprisonment under the Act. It establishes a new offence of consciously making a false allegation or report to the Customs Service that an offence has been committed. Through that same clause it becomes an offence to knowingly make statements with the intention of wasting or diverting personnel or resources. So this legislation basically introduces technologies and protocols to strengthen Customs Service law enforcement capability. It will enable customs officers to search a vehicle to inspect goods containers or packages and even to introduce a provision that will require debts to be repaid within 20 days. The other aspect of this legislation is to introduce tariff rate reductions negotiated in international trade agreements and to provide the means by which information on those rate reductions will be available free of charge on the Internet. Those are some innovations that we have some interest in. 
The Maori Party is proud to stand up in the House to speak out against issues of corruption dishonesty fraud cover-ups conspiracies and any such factors that act in ways to diminish the integrity of the Customs Service and the border control system. We will be supporting this bill at its first reading to allow the korero to occur and we look forward to the opportunity for a more extended period of discussion at subsequent stages of this legislation. 
JACQUI DEAN (National—Waitaki) 
: 
 Thank you Mr Assistant Speaker for the opportunity to speak in the first reading of the Border (Customs Excise and Tariff) Processing Bill. I am excited to speak about the bill because of the announcement made in August by our Prime Minister John Key and the Australian Prime Minister Kevin Rudd that both New Zealand and Australia will install SmartGate to make it simpler and more efficient to cross the Tasman. The intention of the announcement in August by the two Prime Ministers was to help streamline trans-Tasman travel. It is not travel that I am particularly excited about but rather the opportunity for New Zealand to further enhance and exploit its opportunities with our major trading nation Australia. Now that has to be a good thing. 
We have not only an important and growing trade in passenger travel between Australia and New Zealand but also a very important trade in goods and services. Anything we can do at our borders to facilitate that trade has got to be a good thing not only for Australia but for New Zealand. I care less about Australia; I care more about New Zealand. I care a lot about the fact that Australians will now find it easier to travel to New Zealand and back home again just as I think it important that those of us with friends family and business across the Tasman will find it easier to travel there too. 
But more important than the economic impact of those closer ties with Australia is the opportunity—and it is an opportunity—to tidy up and strengthen New Zealand Customs Service biosecurity measures at the border. It is worth reflecting on the opportunities that those new technologies through SmartGate offer to New Zealand. That automated passenger clearance system uses biometric technology. Now that is a step forward. It is being used in Australia. It will be used over time in New Zealand. That offers us a great deal of comfort in terms of biosecurity threats to New Zealand. For example members might think about bananas coming across our border. Although a painted apple moth might come in via a container the biggest biosecurity threat is from fruit such as apples and bananas being brought in by passengers. Let us consider what can be developed in the future. With the scanning of bags happening in Australia we will be getting information from passengers as they depart the Australian borders. One might argue that Australians will not care that there might be a banana or a piece of fruit in some passengers’ bags when they leave Australia and one would probably be quite correct in that but we do care. It would be nice to think that over time New Zealand also will be able to develop technologies so that that piece of fruit in somebody’s bag that has been forgotten about can be detected as that passenger is travelling to New Zealand. That has to be a benefit to New Zealanders. 
Far from the Chicken Little rhetoric that we have been treated to from various parts of the House that the legislation is awful and that biosecurity threats will endanger New Zealand’s economy I think the introduction of these new technologies and the passage of the bill will result in quite the opposite. We will see benefits to the New Zealand economy in terms of enhanced biosecurity measures which are underpinned by some of the measures in this bill. This omnibus bill amends the Customs and Excise Act 1996 and the Tariff Act 1988. It makes consequential amendments to the Goods and Services Tax Act the Finance Act (No 2) 1993 and the Finance Act (No 2) 1995. 
In my brief first reading speech I say that I am looking forward to this bill coming to the Government Administration Committee. I know that we will get a number of submissions on it. I look forward to having some good level-headed discussion on the opportunities that the measures in this bill bring to increase the ability of the New Zealand Customs Service to tighten up and protect our borders from biosecurity breaches. With those few words I commend this bill’s referral to the select committee and I look forward to its further consideration. Thank you. 
DAVID SHEARER (Labour—Mt Albert) 
: 
 I rise to speak to the Border (Customs Excise and Tariff) Processing Bill and to support its referral to a select committee. This bill amends the Customs and Excise Act 1996 and the Tariff Act 1988. In general these amendments are very welcome. The border security of New Zealand is of the utmost importance particularly the biosecurity. I remember not so long ago when we had the painted apple moth in the Auckland region how many millions of dollars it cost to do the aerial spraying needed to eradicate that pest. We have yet to read through this bill a little more carefully but these amendments will probably bolster New Zealand’s ability to protect its biosecurity. A lot of that ability will depend on our cooperation with our neighbours in Australia and on the intelligence that we share between the two countries. Ensuring that that sharing happens more carefully will also be of great value to the protection measures that we want to introduce. 
I will touch on a number of the key aspects of this bill. For example the SmartGate procedures which have already been touched upon by other speakers will enable passengers travelling from Australia in particular to pass through passport control through a mechanised electronic process rather than having to rely on customs officials to process them. That will happen through a microchip in passengers’ passports that will bring up a photograph that will be able to be measured. Not only will this determine whether a person is the legitimate holder of that passport but also it will screen people and it will scan for people who could possibly be terrorists. The process uses the touch-sensitive technology that we are very familiar with when we travel domestically. It will help to speed up the process and it will bring much closer together the everyday activities of New Zealand and Australian businesses and tourism relationships. It is said to be targeted at those low-risk people who do not pose a problem but who are often frequent travellers between the two sides of the Tasman. SmartGate will enable us to ensure that we are not a soft touch for terrorism and terrorist activities coming into New Zealand. It has a $38 million price tag which is justified in terms of what it is able to do in terms of saving and protecting our biosecurity and our economic and physical interests. 
Another part of this bill gives customs officers the ability to search vehicles. It has been unclear until now whether those powers are currently there or whether the police have to be engaged. This amendment closes another loophole. It enables our customs officers to be more effective and used in conjunction with the police it will enable our biosecurity interests to be protected particularly against breaches of a criminal nature. We talked earlier about needing to protect New Zealand borders from the P aspect as well. This bill also gives customs officials the power to make an arrest of people whom they suspect are violating New Zealand’s biosecurity and security aspects while those people are not on a craft or a vehicle. Therefore it closes another loophole that has enabled some looseness in the legislation governing customs officials what they are able to do and what tasks they can carry out. 
The bill introduces the new offence of making a false declaration. Again this appears to be a sensible amendment as it certainly stops the waste of customs officials’ time. It also perhaps prevents issues around commercial competitors that dob in their competitors and create an unfair advantage. This measure also obviously stops customs officials who might be best utilised dealing with real issues and legitimate allegations from being distracted by that activity. 
Another part which I will touch on very quickly intends through the use of better technology to iron out the issues around being able to look at the possible tampering of containers—that is to check whether containers that have come from safe and secure areas have been tampered with or possibly opened. That technology will enable customs officers to see whether those containers have been opened and whether something illicit has been introduced to them. That is all very good and I think that we will be supporting the amendments in those areas once we can take a closer look at the bill in the select committee. 
The bill also enacts a previous Cabinet decision to raise the fuel excise duty by 3c a litre. This is a direct replacement of the Auckland regional fuel tax. 
Grant Robertson 
: It was scrapped wasn’t it? 
DAVID SHEARER 
: The Auckland regional fuel tax was scrapped. That tax made a lot of sense to Aucklanders because it basically meant that as of 1 July this year Aucklanders were giving 2c a litre to enable there to be security in the planning of Auckland’s transport network. That is something that Aucklanders now cannot do as that tax has been replaced by a tax that is put into a consolidated fund. Aucklanders are not able to see where that money is going. We went from a tax that had significant buy-in across the Auckland region—because Aucklanders could see that if they gave 2c over here then they would see 2c of benefit on the other side—to an amorphous tax that goes into a consolidated fund the wisdom of which we have real questions about with regard to the way it is being used. 
What did that regional fuel tax enable us to do? It enabled Auckland to plan effectively for its transport needs. What sorts of needs? The very needs that are in a great deal of doubt right now. For example there is the electrification of the Auckland train system which Minister Steven Joyce says is possible by 2013 but which nobody really believes is possible. The loop of the rail is to go under Queen Street and Karangahape Road and will connect back in Mount Eden. What does that do? It will quadruple the amount of traffic that those trains will be able to take underneath the central Auckland area. It will enable real economic growth to take place. These are not things that just the Labour Party is backing; every mayoral aspirant from the left or from the right who has put forward his or her name so far—whether it be Len Brown Mr Banks or even Mike Lee—is arguing that this is exactly what Auckland needs. 
What about the rail link between the city and the airport that every other city in the world has? We do not have one and we have nothing like that on the horizon. But the regional fuel tax would have enabled us to plan for a First World city link connecting the airport to Auckland. It had massive economic benefit but it was scrapped. Instead a $2.3 billion holiday highway is being proposed as the first on the list of significant roading networks. It carries the same amount of traffic as Sandringham Road does. Can members opposite understand that? Sandringham Road carries the same amount of traffic as what we are seeing from Puhoi to Wellsford. Why are we putting that road in? I cannot understand why unless one happens to have a holiday home up in the north and live in the suburb of Albany. Thank you. 
JOHN HAYES (National—Wairarapa) 
: 
 That was a particularly measured speech that reminded me of the radio programme  
Repetition 
 or is that simply a Scrabble word. We heard quite a lot from that member and his colleagues that was quite irrelevant and myopic in its focus though certainly not as prehistoric as the position of the Green Party which will vote against the first reading of this legislation because Mr Hague did not have sufficient time between receiving the bill in its written form and walking here to the House to read it. More nonsense I have not heard. 
I think it is very important that we lift our eyes to the horizon. This Government led by the aspirational John Key was elected to Parliament by the people of this country because the Prime Minister aspires to take this country forward. He wants to lift productivity and he wants to bring our wealth generation up to the same level of the Australians. The Border (Customs Excise and Tariff) Processing Bill modifying our customs and tariffs processing is so important because it will allow economic activity to take place at a far greater rate than has been possible under the current legislation. We are chasing efficiency. All of us have to adopt a New Zealand Inc approach and drive much harder for more efficient arrangements. 
I listened to the comments from my colleague in the Maori Party about Watergate “Helen-gate” “paintergate” and various other “gates” but SmartGate is about improving access to the Australian market for people and for goods and services and the reverse for Australian products coming here. If we can improve efficiency we can drop the cost of compliance and improve efficiency of economic activity. The better we can deliver to our economic engine the more we can grow the wealth for all of us. That is why this legislation is important and why I rise to support it. 
Most of the amendments that relate to border processing and administration will enable New Zealanders and Australians to get through the other country’s border quickly. We will use new technology. It may mean that we use capital to replace labour but we are doing it to improve efficiency and that is important for every New Zealander. The amendments proposed in the legislation are quite minor but yes some systems will be automated and used in place of customs officers. I think there has been consistent confusion in the House this afternoon particularly around questions of biosecurity because those issues are dealt with by the Ministry of Agriculture and Forestry not by the Customs Service. It does not seem to have been something that has occurred to the majority of speakers here this afternoon. We are here to improve arrangements for the travelling public. 
We will move to biometric technology. This process has been coming for the last 9 years. The previous Government did nothing to advance this cause and I congratulate the Minister on moving forward so quickly after only 10 months in office. Biometric technology will allow New Zealand and Australian passport holders to complete customs and immigration arrangements using an automated system instead of chatting to the friendly person at the arrivals desk when they reach the other country’s border. It is already used widely in Australia and it could have been introduced here if the previous Government had been on its game for the past 9 years which it clearly was not. 
This bill will come to a select committee that I am a member of and I will be looking forward to processing it through the committee by the middle of November. Accordingly because I will have another crack at this cherry I will sit down. I support the first reading of the bill. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 I rise to support the Border (Customs Excise and Tariff) Processing Bill. 
Paul Quinn 
: That’s enough. 
GRANT ROBERTSON 
: That is it? No it is not. It is an excellent bill because it introduces some new technology into the control of our borders. It will allow and facilitate for much easier movement between New Zealand and Australia. The SmartGate concept is one that I know some colleagues across the House might be a little scared of. Paul Quinn would not make it through a SmartGate any day. But I say to Mr Quinn that he does not have to worry; they will not be asking him any questions. He will just have to look in the cameras and he will be able to get through. I am sure that Mr Quinn will enjoy his trips to Australia all the more now that he can make it through with SmartGate. The bill that comes before us today does a lot to try to improve and facilitate people’s movement across the Tasman. 
I will pick up on one thing that Mr Hayes said around the issue of biosecurity and I do not think we should pass over so quickly the concerns that Kevin Hague and others have raised here. When New Zealanders travel overseas they like the fact that when they are travelling on a New Zealand passport they are able to move well and freely. Our passport is a document that is respected and has integrity. In turn when we come back to New Zealand we like the fact that we are able to move smoothly through. But we also like the fact that we have a pristine country. We also like the fact that we have flora and fauna that we are proud of. It attracts people to come to New Zealand. Anything we do—be it changes to customs or be it biosecurity changes—that appears to weaken that reputation is something we need to do with caution. When this bill comes to the Government Administration Committee I will certainly be seeking reassurances that anything that happens to it there will continue to protect the integrity of New Zealand’s borders. 
It is interesting for me that at a time when Government members have been standing up and saying proudly that this bill will help increase the protection of our borders and that it is an important part of increasing surveillance and of ensuring that we do things to cut into the scourge that is P we also know that the National Government took out $3.5 million from the border control budget this year. It took out $3.5 million. If we are really serious as a country about protecting our borders and if we are serious about cutting into the scourge of P then why would the Government cut out $3.5 million from border control? 
John Key was talking about these issues on  
Q+A 
 on Sunday. Paul Holmes in what was otherwise a fairly sycophantic interview asked him at the end about the fact that $3.5 million had been removed from the budget for border control. John Key’s response was: “Yeah well I mean we’re putting a lot of money into this now … I mean we’ve expected every government department to actually look for ways to have savings and I don’t think that should be mixed up with a message of getting tough on drugs.” 
Well I am sorry I say to Mr Key but if we are getting tough on P which is something that all members in the House support then the border is where we need to be getting tough on P. The border is where we need to be intercepting the ingredients that make up P. If we are cutting out money and if we are lowering the amount of security and decreasing the integrity of our border then we will not be able to make those cuts into the supply of P. It is all very well to talk about the across-the-counter medicines that people buy in pharmacies but a large quantity of those precursor ingredients are coming in across the border. We need to keep investing in our border control to make sure that we keep the scourge of P out of this country. I think it is a bit rich for Mr Key to be trumpeting that and talking about taking out that money. 
At the same time we have seen 50 staff taken out of Biosecurity New Zealand. I accept Mr Hayes’ point that this bill is largely about customs but if we look at the border in totality if we look at New Zealand’s presence at the border then removing 50 staff from Biosecurity New Zealand is not investing in it. If we look at places like Timaru and Nelson we will see that those ports will now be wondering whether there will be enough staff to deal with biosecurity emergencies. I ask whether we will be able to protect our border as we decrease the number of staff. 
One of the things this National Government has proudly said is that it is moving resources to the front line. That is what it is doing. It is taking them out of the back office. If we ask most New Zealanders what one of the fundamental front-line services that the Public Service provides in New Zealand is they will say it is the service at the border. It is biosecurity. It is border control. This Government has taken out $3.5 million from border control and it is cutting staff in Biosecurity New Zealand. The Government is not taking seriously the protection of our borders. That is not reducing back-office staff; that is reducing front-line services. The distinction between the front line and the back office is completely artificial anyway. But in this instance the Government is not even living up to its own rhetoric. 
In fact this bill is a good bill. I think that New Zealanders will know that when this bill passes it will protect and provide an assurance to them that our borders are protected. But the select committee will have a job to do in helping provide that reassurance and in making sure that New Zealanders know that their biosecurity and borders will be protected. 
I will speak briefly about the changes to the Tariff Act that come in under this bill. They are something that I support. I think that when we are making agreements about reductions in tariff rates in free-trade agreements it is useful and good to be able to do that in a simple and an efficient manner. But I also think that when we talk about these changes at the select committee it will be very useful to make sure that we find a way of communicating about these changes in a way that people understand. It is important for those who are involved in the affected industries to know about the reduction rates and to understand the impact on them when we are putting things through in legislation. Although I certainly support the efficiency and the streamlining in this bill I want to make sure that when we work on it at the select committee we are not taking information away from the public. I want to make sure that we are not creating a situation where the people who work in industries affected by tariff reductions do not know as much about these changes as they should. 
The rest of the bill deals with a number of enforcement matters and seizure and search responsibilities for customs officers. Again custom officers will now be placed under more pressure in their working lives. They will be finding it more and more difficult as staff around them are removed. 
Some of the work that has been put in brings a cost. The SmartGate for instance will cost $38 million. That is a large amount of expenditure and a good investment. I would ask the National Government what it thinks about investing in the people who work in those areas. What about investing in the customs officers and in those who work to protect our biosecurity? Over the National Government’s time in office we have consistently seen that it does not want to make that investment in people and border control is about people. 
One of the concerns that has been raised about the SmartGate idea was whether there will be any interaction between someone coming into New Zealand using the SmartGate system and an actual person. I am reassured by reading the bill and the explanatory note that there will be that interaction. There will be an opportunity for some interaction between someone coming into New Zealand and an actual person so that we can continue to protect our borders. Customs officers and Biosecurity New Zealand staff are the people whom the Government needs to invest in. They are the people who keep our borders strong. Technology is all well and good and it is an important part of facilitating movement and protecting our borders but it is the people who work in those organisations the hard-working public servants whom this Government should be investing in. 
In summary I support this bill. I look forward to it coming to Parliament’s all-powerful Government Administration Committee where we will look at it closely analyse it and ensure that it contributes to free movement between Australia and New Zealand and to the protection of our borders and our beautiful country. Thank you. 
NIKKI KAYE (National—Auckland Central) 
: 
 I am delighted to speak in the first reading debate on the Borders (Customs Excise and Tariff) Processing Bill. I am particularly delighted that it will be going to the Government Administration Committee and I look forward to deliberating with other members on that committee. 
The purpose of the bill as has been mentioned by many other speakers is to improve security at our borders. I want to touch on a point that was incorrectly stated by a number of Labour members. 
Hon Darren Hughes 
: Name them! 
NIKKI KAYE 
: Mr Hughes has asked me to name one of them—Clayton Cosgrove mentioned the reduction of 55 staff. I make the point that those staff were involved in biosecurity operations at the border but the whole point of that particular system was that it concerned the investigation of containers. It was a user-pays system. The issue is that in the recession the number of containers dropped so there was not the need for those particular officers—that was in the area of biosecurity. I think it is really important to make the point that we are talking about two separate issues. I can see how Labour members have tried to draw the longbow in terms of border operations but the point is that a key focus of this bill is technology. It is about bringing the New Zealand Customs Service into the future. I raised the point regarding those particular staff—that it was a user-pays system. The number of containers dropped therefore the need for those particular staff dropped. This bill is specifically dealing with some issues in terms of taking the New Zealand Customs Service into the future. 
One of the key amendments in this bill concerns the SmartGate system and I must admit that in my electorate I have had some great feedback about it. People are all for making it easier to travel between New Zealand and Australia. I think there has been a lot of good feedback regarding the announcements from Prime Minister John Key and Kevin Rudd in this area. 
The other point is that there are a number of other amendments in this bill that I look forward to looking at more closely during the select committee process. One of them focuses on technology as well and around the use of future technology. The amendments will have the effect of allowing for future technology to be used instead of the traditional seal that was envisaged at the time those definitions were drafted. This is quite important because it might include “smart” packages that are able to detect interference with their contents. That is crucial because we need to be able to know that the packages that are coming in have not been interfered with. We need to use technology to help us to do that. 
The previous speaker Grant Robertson criticised our Government in terms of its investment in people. But one of the key points in this bill is that we are taking the New Zealand Customs Service into the future and using technology. I want to give members an example of that. If we had been asked 10 or 20 years ago about the use of electronic boarding passes would people have really ever questioned now how beneficial they are? I think there is an issue of the Labour Party being a bit in the dark ages. Labour members need to understand that technology can be very beneficial. The National Government is bringing the New Zealand Customs Service into the future. 
The other key amendment I want to bring to people’s attention concerns false allegations or reports to a customs officer. This is a very serious issue but I can see in the draft bill that a new offence is seen as necessary for people with false intentions who allege to customs that an offence has been committed or that the safety of people or goods is jeopardised. This offence is based on section 24 of the Summary Offences Act which relates to the police. This is quite crucial. We are giving customs officers the power to penalise those people who are wasting the time of the New Zealand Customs Service. 
There are a number of amendments here. I have mentioned the particular ones relating to technology which are about bringing the New Zealand Customs Service into the future. We have heard a whole lot of stuff from the Labour Opposition which I do not think is particularly relevant to this bill. I saw that David Shearer launched Mike Lee’s mayoral campaign. I do not believe he has announced that he is standing yet but David Shearer said that he had. A whole lot of irrelevant stuff has come from the Opposition but I am very proud to be supporting a bill that is about taking the New Zealand Customs Service into the future supporting technology and supporting Kiwis and Australians to be able to travel more easily to each other’s countries. I am proud to be supporting this bill. 
A party vote was called for on the question  
That the Border (Customs Excise and Tariff) Processing Bill be now read a first time. 
Ayes 113 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Maori Party 5; Progressive 1; United Future 1. 
Noes 8 
Green Party 8. 
Bill read a first time. 
Hon STEVEN JOYCE (Minister of Transport) 
 on behalf of the  
Minister of Customs 
: I move  
That the Government Administration Committee consider the Border (Customs Excise and Tariff) Processing Bill 
 that the committee report finally to the House on or before 16 November 2009 and that the committee have the 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). 
Motion agreed to.