Prosser Richard: Border Processing (Arrivals and Departures) Levy Bill — First Reading Second Reading In CommitteeText is incorporated into the Bound VolumeProsser Richard: Border Processing (Arrivals and Departures) Levy Bill — First Reading Second Reading In Committee[Sitting date: 21 May 2015. Volume:705;Page:3902. Text is incorporated into the Bound Volume.]RICHARD PROSSER (NZ First):I am very pleased to rise to take a call in the second reading of the Border Processing (Arrivals and Departures) Levy Bill as it scurries its way urgently through the House. In the absence of a select committee process—or any other mechanism of public scrutiny come to that—it appears that all we have left as a means for ascertaining the reasons behind this bill and for getting some kinds of answers out of the Government is this process of urgency. I have to say that I am a little hurt that Minister Wagner addressed everyone’s questions except mine. I am not taking it personally; it is just that I want to know why. Maybe they were questions that the Minister felt she could not answer. Maybe they cut too deeply to the heart of the matter. But anyway I am sure that the Minister will take the opportunity to address the concerns that we have as a party.The first question I have is that we have been given an indication that this levy—fee tax whatever we want to call it—is going to be added on to the cost of tickets and that will be tickets that are sold here going outwards and tickets that are purchased overseas coming inwards. What I want to know from the Government is: at what stage of the GST process does this levy get applied? Does this levy get applied before GST is added or after? Is it in fact going to have GST on it as well and is it going to be another tax upon a tax in the same way that GST on rates is a tax on a tax? This is another case of what happens in terms of unintended consequences—or perhaps actually they are intended consequences—when due process is done away with and things happen in a hurry and there is not the time for reflection and contemplation and consideration and questions being asked and answered. Maybe this is one of these things that will just get sorted out later. If the Government does not want to make it a tax upon a tax and add GST on to the levy well then there is going to have to be a whole lot more administration involved and that is going to raise the cost as well so the value of the levy itself is going to fall—unless of course it does not mind adding a tax on a tax but this we will find out I suppose at some stage in the future.What is really starting to coalesce as being the centre point I guess of our difficulty with this bill is that we do not know whether this levy is intended to be additional funding for biosecurity or whether it is actually intended to just replace existing funding. Mr McKelvie in his long rambling speech of about 30 seconds I think it was spoke of a boost to biosecurity funding. But the Minister has consistently talked about cost recovery. Well it is one or the other. You know it is either an additional source of funding or it is a switch in funding from one source to another. I have a horrible suspicion—and it is growing on me all the time—that this levy which is touted as being a boost and an increase for biosecurity is in fact smoke and mirrors and that actually funding allocated to biosecurity will be flatlined and it is just the source of it that will change.When you drill down through the mud of the Government’s Budget figures it seems that all the appropriations relating to what used to be Vote Biosecurity and now appears to go by a number of different names are either flat or slightly reduced. There is a one-off capital injection to fund new X-ray machines—we see that. Whether that is actually funded by the levy or the tax or not remains to be seen. There is a mention of some additional staff but that comes in some of the Government’s publicity material and not actually in the bill itself. Again there is no clear indication as to whether the ongoing funding for these things—for the additional staff and for the X-ray machines—will be coming solely from the levy or partly from the levy or whether the existing baseline funding from general taxation will continue or not and the levy will be on top. This we actually need to know.Last year I think it was we passed the Airports (Cost Recovery for Processing of International Travellers) Bill. Airports where that levy applies will not also have the new levy. That to my mind adds weight to the idea that this levy—or tax as is being suggested—is intended to be the primary source of funding for border inspection activities and not an additional source. Cargo inspection as we know—containers and freight coming in—is already funded through levies and fees. But we also know that only about one in four or only about 25 percent of incoming shipping containers are actually inspected. I would like to see increases in this levy as well if indeed the passenger funding is to be additional to existing revenue.The Customs Service website advertises inspection fees for containers for the importation of personal household effects of $330 for a 20-foot container up to $480 for a 40-foot container plus fumigation if necessary. That is for the likes of people migrating to New Zealand or New Zealanders who have been away coming home—their personal effects and so forth. So we know that all these containers are inspected because that fee is charged and paid and there is a devanning process. But the great majority of containers general freight are not inspected. There is an audit process where some are taken out or there will be a period of time or—Mr DEPUTY SPEAKER: Passenger levy.RICHARD PROSSER: Thank you Mr Deputy Speaker. They are not inspected there are not enough inspectors and I am wondering whether any of this levy is to be directed to that sort of thing. We would actually like to see the levy extended for that. That is a large barn door that has been left open.Our other primary concern is whether or not this levy is simply in fact a holiday tax. It gets back to my earlier questions around whether or not this is an additional stream of funding or a replacement stream of funding. I do not believe that the travelling public would mind too much about paying $16 on top of their air tickets to come into the country if that was going to contribute to additional safety in terms of making sure that New Zealand does not get diseases like foot-and-mouth and so forth. We would certainly expect and the New Zealand travelling public would certainly expect that overseas travellers would pay that as well. The primary sector certainly expects that anyone any person who is a source of potential risk will pay their fair share. It is fairness and the relative fairness of who is expected to pay what that is at the heart of this matter. So we would like some clarity around that.It is puzzling as to why we would be charging a $6 levy for people to leave the country. I know that the Minister has explained that this is to add to or cover the costs of customs for people on the way out. Customs and biosecurity as we know are two different things. But again it makes me suspicious that if we are going to charge a levy on passengers leaving the country paying $6 towards the cost of running the Customs Service that to me says very loud and clear that actually this is a replacement source of revenue not an additional source of revenue.Hon Nicky Wagner: This puts $4.7 million on for departures.RICHARD PROSSER: Well I would love the Minister to stand up in the Committee stage and spell this out quite clearly. I want an assurance from the Minister that this levy is going to be on top of existing baseline taxation funding for biosecurity and customs not instead of. There is just too much ambiguity about it. The way the Government is spinning this thing as being great and marvellous and wonderful and additional—maybe I am a naturally suspicious person but it seems to me as if what we are going to wind up with at the end of this whole process is the same amount of money coming from a different place and not actually an increase.Actually most of the bill is concerned with who collects the money and what trust accounts it goes in and what records need to be kept and what penalties will apply if these rules and conditions are broken. It actually does not say anything at all about what the money will be spent on other than Government statements around funding for biosecurity which itself is a welcome thing. The explanatory note states: “The objective of this Bill is to ensure that funding arrangements for MPI and Customs are sustainable and the costs associated with the delivery of those activities are borne by those who directly benefit from the activities or give rise to the risks.” I mean costs being borne by those who directly benefit—Hon Nicky Wagner: That’s what a levy is.RICHARD PROSSER: Well in terms of customs Minister I do not understand that because arguably the only direct beneficiary from a customs inspection would be the Customs Service itself. Although the entire nation benefits from biosecurity inspections the primary sector could arguably be called the primary beneficiary from biosecurity but it is not being targeted by the levy at all. I am not saying that it should carry more of the cost—the primary sector pays tax and tax currently pays for biosecurity—but it is a direct beneficiary and yet this levy appears to be targeting a group that is not a direct beneficiary which again is confusing.The descriptions in the bill itself talk about functions—OK I guess “functions” can mean anything. We would like a bit of that spelt out a bit more clearly. I have another question: do cruise ship passengers get to pay the exit and entry levies four times over if for example their cruise ship stops in Auckland and in Wellington and in Lyttelton and at Port Chalmers? Because if the ship goes outside the 12 mile limit arguably the passenger has left New Zealand and then come back in again and gone out and come back in and gone out and come back in. Do they get stung with a fee every time they leave and every time they arrive again? Why have we not been told these things?Again there is no mention of whether or not this additional or altered source of funding is going to be used to reinstate 100 percent screening of all incoming passengers’ luggage mail and freight. This is something we are quite hot on. It is something that will actually make a material difference. Rearranging the beans into different-sized heaps before you count them does not actually increase the number of beans. Again we have—Hon Member: What does Jack think?RICHARD PROSSER: —questions that are—Jack and the Beanstalk—