Prosser Richard: Border Processing (Trade Single Window and Duties) Bill — Second ReadingText is incorporated into the Bound VolumeProsser Richard: Border Processing (Trade Single Window and Duties) Bill — Second Reading[Sitting date: 20 February 2014. Volume:696;Page:16221. Text is incorporated into the Bound Volume.]RICHARD PROSSER (NZ First): I am pleased to rise on behalf of New Zealand First to take a call on the second reading of the Border Processing (Trade Single Window and Duties) Bill. New Zealand First supported this bill’s referral to the ForeignAffairs Defence and Trade Committee in the first instance although we had some concerns—not exactly misgivings as such but some concerns—as to what course the Government might choose to take with regard to biosecurity in particular following the passing of this bill into law should the House in its wisdom decide that that is in fact the appropriate course of action. However in spite of those concerns we supported the aims of the bill. We felt that it was well intentioned and that if it worked as advertised it would be a beneficial thing for importers and exporters travellers and the Government alike. So we wanted to see what the select committee had to say about it and what the submitters had to say.We note that the select committee has indeed recommended a number of changes. It has recommended that the bill should proceed with a number of amendments. We believe these are eminently sensible and that they will streamline and improve the bill and make it a better-functioning and a more well-oiled piece of legislation. So I am happy to report that New Zealand First will continue with our support for the bill in line with the recommendations of the select committee.The commentary on the bill says that the committee recommends the “amendment of clauses 2(5) 5 36 and clause 1 of schedule 1”—which relate to the commencement of the Act—“to make it clear that the Act other than those provisions relating to the Joint Border Management System would come into force on the day immediately after the expiry of the 3-month period that begins on the date on which this Act receives the Royal assent.” This we feel is a very sound and sensible approach on the part of the select committee.With regard to the requirement to consult industry groups the committee recommended “inserting into clause 15 of the bill a further amendment to section 118 of the Customs and Excise Act 1996 which would make consultation mandatory with representatives of groups whose interests are likely to be substantially affected by proposed changes to regulations governing the minimum level of duty.” The advice to the select committee was that this would be consistent with the approach taken in other legislation. It would also make the bill “consistent with other Customs and Excise Act 1996 regulation-making provisions (for example sections 34A 40A and 50A relating to fees and charges).” Consistency is a fine thing in legislation and if there could be more of it that would be a good thing. We commend the committee for this most sensible suggestion which we wholeheartedly support.More important still is the essence of the amendment that is to make consultation itself mandatory. Consultation lies at the heart of robust democracy as is impressed upon us every day here in this House through the operation of the select committee process itself. Quite apart from the fundamental right of people to be at the very least informed and for preference consulted on matters of the State that may concern them consultation with interest groups and interested parties frequently brings information and perspectives that Governments and their advisers may not have known or simply may not have thought of. It makes for better lawmaking. It makes for better laws and better regulations and a better-functioning Government within a better-functioning democracy. Again we applaud the select committee for its foresight in this regard.With regard to levy orders the committee has recommended “inserting new clause 46A into the bill to amend section 140(1)(g) and (h) of the Biosecurity Act 1993 to provide more clearly for the making of levy orders to impose or allow the imposing of different levy rates for different services or functions under the Act and to help make it clear that an order could set the rate or rates for a specified period (for example a levy year). This change would avoid doubt and would reflect the fact of the 2 current levy rates.” Flexibility is as important a factor in healthy legislation as consistency and againit is a recommendation for an amendment with which we find ourselves in complete agreement.But perhaps the most complex of the changes recommended by the committee concerns the de minimis provision for imports. The select committee considered the de minimis provision for import consignments and particularly how it affects our retail environment. The New Zealand Customs Service does not collect duty on parcels and consignments valued below the de minimis which we are advised are currently those incurring less than $60 in duty—Dr David Clark: How much?RICHARD PROSSER: —$60—because the per transaction compliance and administrative costs of calculating processing and collecting the revenue are disproportionate to the Government revenue on the goods. Patently this is unfair and makes very little sense. If a parcel or consignment attracts only the goods and services tax of 15 percent it will be subject to the de minimis provision if it is valued at approximately $399 or less. If tariff duty is also payable the de minimis will apply at a lower consignment value which is entirely fair in our view.The committee accepted—and we share its view—that “the provision of an online customer purchase option promotes a competitive retail environment encouraging retailers to become more efficient. The rapid growth in New Zealanders’ offshore purchasing of goods online costing less than $399 places many traditional retailers who have to charge GST on their retail goods at a disadvantage. The Retailers Association estimates that the de minimis provision results in forgone revenue that is estimated to be around $300 million annually. Many factors influence a consumer’s decision whether to shop in person or online and the GST charged by a domestic retailer is only one of them.”The committee observed that “Under current systems if the de minimis exception were very low monitoring incoming goods and collecting taxes due could require a large organisation costing more than any revenue collected.”—an organisation such as the Inland Revenue Department perhaps. The committee was advised that “the current border technology cannot collect GST and tariff duty effectively on imports valued at less than $399 although there are various ways to monitor them including random checks which are being examined by an interdepartmental group. Under the current law Customs relies upon an honest declaration of value to establish taxes due.”—perish the thought.The committee said: “This is a complicated subject and we are aware that the Inland Revenue Department Treasury and Customs will soon be releasing a discussion paper on collecting GST on goods and services purchased online.” We look forward to reading and digesting that paper in the fullness of time. We are told that it will include “the revenue collection issues raised by the de minimis threshold and distinguish sectors that are variously affected by online purchasing.”In conclusion although we are committed to remaining vigilant in so far as our scrutiny of this Government’s biosecurity operations are concerned we are satisfied that this is a bill with which we are largely in agreement and we are happy to support its passage through the House. Thank you.