Customs and Excise Amendment Bill (No 2) — Second Reading 
Customs and Excise Amendment Bill (No 2) — Second Reading 
[Volume:637;Page:7648] 
Customs and Excise Amendment Bill (No 2) 
Second Reading 
Hon NANAIA MAHUTA (Minister of Customs) 
: 
 I move  
That the Customs and Excise Amendment Bill (No 2) be now read a second time 
. The purpose of this bill is to strengthen New Zealand’s border security measures and to provide for more effective and integrated border management in recognition of the fact that New Zealand’s trade and travel landscape is continuing to change and that we must move to keep pace with that. Increasing threats to our communities through terrorism international organised crime drugs identity fraud and other issues mean that we need strong effective legislation to integrate our border management in order to deal with these risks at the front line. This bill helps us to achieve that. This important legislation is also carefully drafted in order to recognise both the Government’s and the community’s interest in effective border management and the rights of people to travel and conduct legitimate trade across our border. 
A key principle of the bill is to reinforce the Government’s commitment to protecting our communities and our country from threats such as drugs and transnational crime. The Customs Service is the first point of contact at the border for people goods and craft so the service needs to have the clear legislative ability to refer people and goods that are of interest to other agencies such as the police and the Ministry of Agriculture and Forestry. Other key principles are to address current limitations and border powers to provide more effective integration and stronger links between agencies working at the border and to ensure that people or goods that pose a threat do not slip through the gaps. 
This bill also consolidates border security - related amendments made in 2004 to the 1996 Customs and Excise Act through the Border Security Bill which was designed to counter continuing and increasing border-related threats. 
I would like to acknowledge the work of the Foreign Affairs Defence and Trade Committee and the committee clerks and officials in their consideration of the bill and thank them for their efforts to get this bill back to the House. It should be noted that the committee has unanimously agreed to a series of amendments to the bill. They include two substantive changes relating to clauses 8 and 9A plus a handful of minor amendments. The widespread support of select committee members is a positive recognition of the service conducted by the New Zealand Customs Service. 
In relation to the changes to clause 8 it is recommended that an amendment be made so that once the Secretary of Foreign Affairs and Trade has made a determination that goods are kept—all goods—notice of that determination should be given to relevant parties in writing. Corresponding changes are also recommended to the current section 285 of the Customs and Excise Act to set out the rules as to when a notice is deemed to have been received. In this regard the select committee also recommends an amendment to clause 19 to insert new section 209(4A) which provides a defence if the exporter can prove that through no fault of his or her own the notice was not received. These amendments were proposed by the New Zealand Law Society and reflect its submission that the exporter should have notice of the ban before an offence is considered to have been committed. The determination is still the legally active mechanism to ban the export of the goods but the offence provision is contingent on notification not on the determination. 
In relation to changes to clause 9A the select committee recommended that section 79 of the Act be amended to change the date of inflation indexation for alcohol to 1 July in any year and for tobacco to 1 January in any year. The current date for the indexation of inflation on alcohol is 1 June and the date for the indexation of inflation on tobacco is 1 December. This presents issues for both sectors. Firstly the fact that the Alcohol Advisory Council will increase its levy annually on 1 July means that alcohol retailers must make two adjustments in consecutive months. The proposed amendments will mean that the two adjustments will occur on the same date and that will certainly lead to an administrative improvement for the industry. 
The second reason supporting the change is that because of time constraints officials have to seek a waiver of the 28-day rule which is the required public notice period for any adjustments to be made. These changes will enable officials to meet the 28-day rule while also reducing compliance costs for alcohol retailers by avoiding duplication of process and enabling better forward planning by the industry. 
The select committee also unanimously recommended some minor drafting improvements to clauses 4 6 and 19 of the bill. The change to clause 4 corrects a drafting error made in 2002 relating to the definition of New Zealand’s nautical mile limit. The change to clause 6 involves relocating a subclause of the bill relating to the definition of electronic communication devices to provide consistency with other provisions. The change to clause 19 results from recommended changes to clause 8 in that it provides for a penalty to be imposed on exporters if they fail to notify the Secretary of Foreign Affairs and Trade that goods are or may be catch-all goods. The Government supports these amendments and thanks the select committee for its efforts in bringing these matters back to the House. 
A large number of individuals agencies and Government departments have been consulted during the development of this bill. I acknowledge all of those who have made submissions and provided their input. I thank them for their contributions. I also note that the bill complies with the rights and freedoms contained in the New Zealand Bill of Rights Act 1990 and the Human Rights Act 1993 as well as with relevant international standards and obligations. 
In conclusion the Customs and Excise Amendment Bill (No 2) is important legislation that supports a whole-of-Government approach to better enable border management and it should proceed. The bill affirms this Government’s commitment to a vibrant economy to strong and safe communities and to the protection of our national identity and way of life. Thank you. 
SHANE ARDERN (National—Taranaki-King Country) 
: 
 That was a very good call from Nanaia Mahuta. I rise on behalf of the National Party in support of the Customs and Excise Amendment Bill (No 2). Can I say at the outset that a bill like this makes the role of an Opposition spokesman quite difficult in the sense that we are supporting it and of course the Opposition’s role is to oppose expose and then propose. The Queen’s honourable Opposition will endeavour to do that in the course of this debate. 
The legislation was referred to the Foreign Affairs Defence and Trade Committee on 1 August last year. It was a very good select committee with very good National members on it: my good friend Tim Groser sitting next to me Dr Wayne Mapp John Hayes and of course the Hon Murray McCully. So I know the work of that select committee would have been robust—I can say that with a high degree of certainty. Can I say also that this is good legislation because it harmonises and modernises customs control at our borders with that of our international friends and neighbours around the world. It brings it into line with issues exposed after the 9/11 terrorism attack and the growing problem of terrorism around the world. 
It is very hard to read through a bill like this and find the wrongdoings as it were of a socialist Government. I thank the officials for their obvious guidance and the work they did in helping the Minister to prepare her speech so that we had an accurate ministerial statement and in helping the select committee with their advice. But there are some socialist misdoings in it—let me tell members—and I have to expose them. First of all the poor old hard-working railway worker who is living in Taumarunui the seat of the Minister of Justice—the old engine driver who has retired there and is trying to enjoy in his twilight years a quiet durry on the side while sitting in front of the old railway station—is to have his taxes increased incrementally on that durry every June I understand without any reference back to Parliament. They will be consumer price indexed—up they will go and never mind whether there is justification. It will be the same if he decides to go down to the RSA for a wee dram. The taxes will automatically rise on that at a set time every year. 
I agree with the fact that the Government has harmonised them; there was an issue about that which needed to be addressed in that the excise tax went up at a different time from the consumer price index in terms of inflation. So that is sensible. I understand that that is probably due to some of the good work of the Foreign Affairs Defence and Trade Committee and I congratulate it on that. But the question still remains of why a Government with a $12 billion surplus—or some such figure—needs to have another crack at that poor old former railway engine driver who is living in Taumarunui by banging another automatic tax increase on to him for his wee dram down at the RSA and for his little smoke while he sits on his seat in front of the railway station. 
It is typical of socialist Governments that they always attack those who support them. What this Government does not and cannot understand is that if we look at the voting records from polling booths in Taumarunui which used to be in the Taranaki - King Country electorate we see that over the years those voters overwhelmingly have voted Labour. Let us remember that this seat is described as a true-blue hard-core National seat but if we look at the voting records from Taumarunui polling booths we will find that overwhelmingly the voters have voted Labour. There have been only two exceptions—when the town was in the Taranaki - King Country electorate and yours truly was the local member. On those occasions voters voted for the other side; they voted for the member for Taranaki - King Country in three booths out of five. I welcome the fact that the poor folk of Taumarunui were inflicted with Mr Mark Burton the Minister of Justice as their member because here he is sticking it to them again with more taxes that are totally unnecessary. 
On a more serious note the fact that the Customs and Excise Amendment Bill does harmonise with the international community as I said is a good thing. But here is the other issue—members should listen up. This is the proposed part. Here is the other area where socialist Governments always fail and always miss opportunities when they are given to them. Here was a golden opportunity to increase the synergy between the Customs Service and those doing border control biosecurity Biosecurity New Zealand. Here was a massive opportunity which is obvious to anyone who has looked at the issue for an increase in cross-pollination and cooperation between those two organisations that work at our border. It would give a whole of border protection if you like. Here was an opportunity and the socialists overlooked it. 
The Government has been offered opportunities on many occasions I have been informed to import sophisticated X-ray machinery that would not only detect the increasing amount of drugs that are flowing across our borders—and overwhelming that is the case; I have press releases as recent as today that would back that up and the technology exists—but also help to detect biosecurity incursions of which we have had 229 in the last 5 years. Overwhelmingly that could have happened. But what does this Government do? It says: “No no we don’t want to look at that. Those are two separate Government departments and they have to stay separate.” There are people involved in those departments who obviously support this Government. Government Ministers and their officials have not taken this opportunity to realise that synergy and that is a tragedy because there was a huge opportunity there. 
So I say to the officials that they should look at this legislation next time it comes up for amendment—which it will because the 1996 Act has already been amended and this is another amending bill so I imagine that it is fast-moving legislation as it were because of technology. Next time the officials have an opportunity to look at this legislation—it certainly will not be under this Government; it will be under a National Government—they should look very closely at in particular some of the sophisticated American equipment that has been designed post-9/11 to detect biosecurity and customs risk items and bring the two together at our borders. We have here a lost opportunity. Section 175C “Seizure and detention of goods suspected to be certain risk goods or evidence of commission of certain offences” substituted by clause 15 is where that provision could have been inserted. I notice that there is a reference to risks with biosecurity goods. The Government has gone part-way; it could have gone a lot further. The question is why it did not take that opportunity. It is the failing of every socialist Government around the world and we have no exception here. 
So I say in closing that overwhelmingly the National Party supports the direction this bill takes. Overwhelmingly we congratulate those on the select committee on bringing back the bill in a form we can support through the House. The officials have done a very good job. Why does the Government have to whenever it can bang in an extra tax even when it is not needed? Why does it not always maximise the opportunities presented to it when it has the chance to do so? That is the problem with socialist Governments. That is the reason why this Government has expired. That is the reason why there will be a change of Government at the next election. 
DIANNE YATES (Labour) 
: 
 It is sad that the previous speaker Shane Ardern was not on the Foreign Affairs Defence and Trade Committee because he has some misunderstandings about the Customs and Excise Amendment Bill (No 2). But I thank him for his support for the bill and I thank the Opposition members of the committee who played a very good part in progressing it. I point out to Shane Ardern that there is no new tax—what was changed was the date around a tax. I point that out as a matter of clarification. It would help if the member opposite had read a little more carefully and engaged his eyes before he spoke about something that was not in the bill. 
I thank in general those who are involved in the New Zealand Customs Service. I thank the Minister of Customs Nanaia Mahuta and the chief executive officer and staff of the Customs Service for the tremendous work they have been doing apart from this bill in apprehending all sorts of irregularities in relation to customs. We have seen some tremendous work around drugs and around people trying to get illegal material into this country—everything from false exam qualifications to drugs and to weapons. Recently we heard that stamps are coming into New Zealand. So I thank the Customs Service for the tremendous work it does—it often goes unnoticed and unheralded. The Minister who is a very good Minister understands that she has a very good ministry working for her. As the member has pointed out this bill is not about party politics; this is about “New Zealand Ltd” and this is about keeping our borders secure. 
I will read the introduction to our select committee report to remind people what the bill is about: “The purpose of the bill is to strengthen New Zealand’s border security by clarifying Customs’ border management role and improving the Customs Service’s ability to work cooperatively with other agencies at the border.” I point out to Mr Ardern the last part of that sentence which relates to working with other agencies at the border. “The bill amends the Customs and Excise Act 1996 … to ensure that individuals and items arriving or departing New Zealand are unable to slip through border processes without proper scrutiny. A particular area we examined in our consideration of the bill was that of controls over prohibited exports on the New Zealand Strategic Goods List.” 
The Minister has pointed out the changes to clause 8 that the committee recommended. The changes as has been pointed out are largely technical and I thank the Law Society for its recommendations. The amendments are designed to make the bill more workable and the law more enforceable. There are amendments around dates relating to inconsistencies with other legislation and those amendments will ensure that the law is able to be enforced. One of the interesting things was the definition of “New Zealand”—as has been pointed out by the Minister—and the definition of nautical miles and how the Customs Service can enforce the patrol of New Zealand borders. So there was some discussion about definitions. 
As has also been mentioned we checked the New Zealand Bill of Rights Act as there were some issues about detaining. The members of the committee were asking whether in some cases the Customs Service had asked for sufficient time for its officials to respond to someone who had been detained and they asked whether the officials were able to detain that person long enough to travel to the place where the person was detained. Officials assured us that the amount of time provided for in the bill was sufficient and I think that the committee was quite vigilant in looking through those particular areas. Generally the committee was in agreement and I thank the members of the committee for their cooperation on this bill. 
The bill is not about socialism and it is not about party politics; it is about our country and it is about New Zealand—and I think that Mr Ardern very well knows that. Once again I thank all the committee members the staff who assisted us and those who made submissions. We look forward to the further progress of the bill. 
TIM GROSER (National) 
: 
 As members already know National supports the Customs and Excise Amendment Bill (No 2) which basically does two or three different things. One is highly technical and I suppose not very large in the scheme of things but the other is quite fundamental. When I was having lunch with somebody today and he asked me what I was doing in the House I said that I was to speak on the Customs and Excise Amendment Bill (No 2) and he asked what on earth I would talk about in that context. I said that I would talk about two of the biggest issues facing this country: global terrorism and the issue of weapons of mass destruction because those issues are actually the bigger purpose of this bill. 
On the technical issue of the adjustment I feel even more passionately than Mr Ardern does about the retired railway worker in Taumarunui having his non-inflationary dram. But having participated in the Foreign Affairs Defence and Trade Committee let me assure Mr Ardern that if we are to make an inflation adjustment that is an issue for retailers. It is a compliance cost issue and I think that the committee members have worked quite productively to find a fair and reasonable way of doing the adjustment in a way that minimises the compliance cost for the retailer. I would wish only that the Labour Government would show the same degree of common sense when it comes to rather more important compliance issues. 
Before getting on to the bigger purpose of this bill I will just say in public what I have said privately many times—that is a huge thankyou to the women and the men who work in and over the years have worked for our Customs Service. I have had a lot to do with them professionally usually on the policy side of the interface with trade issues. I have found officials’ advice on deeply technical administrative issues such as rules of origin and customs classification issues hugely helpful and just vital to a “New Zealand Inc.” approach on that. I acknowledge the sterling work in my opinion that those people do across a broad set of issues and not just at the border or at the coalface as it were. 
When we consider what this bill tries to do which is to give customs officials the tools to do that job properly at the coalface we have to reflect on the fact that they have quite a difficult job. They measure their success largely by how little we hear of them. Sometimes people notice things only in their absence and it is the number of things that go wrong at the border that brings the Customs Service’s work to people’s attention. It is a difficult environment to work in what with the number of narcotic drugs that escape the officials’ best efforts. So I think that it is very important for the legislator to give those people the tools that they need. By and large I think that this bill does that. The one area that National is concerned about in terms of border management issues is of course biosecurity where we do not think that the Government has given the officials the tools to do a job of absolutely crucial significance. But at least this bill in dealing with other areas of border security enforcement moves absolutely in the right direction. I want to commend the Customs Service for its work. 
The issue of terrorism is right at the top of the Customs Service’s responsibilities—and it is an awesome responsibility—which it discharges on our behalf and on behalf of every New Zealander. We have learnt with the spread of global terrorism that a group of deeply dangerous people who rail against globalisation because they have a warped vision—we are more familiar with that vision from other contexts too—of trying to return us to some myth of a golden past actually utilise the tools of globalisation in an extremely efficient way. It is a rich and troubling contradiction. We are involved in the struggle against the global menace of terrorism which knows no frontiers. Personally I prefer to use the words “struggle against terrorism”; I do not like the term “war” partly because I think that it misses the central point. 
I would put the central point as being this. Terrorism has been committed by every major religion that I can think of. We have had Sikh terrorists; I could give examples of them off the top of my head. We have had Hindu terrorists. We have had Jewish terrorists. And of course we have had many forms of different Christian terrorists including some in recent times. I do not think that any of the people who belong to those major religions would want their entire religion to be categorised by the deranged behaviour of fanatics who as they maim torture kill and destroy consider that they are doing so in the name of their interpretation of their belief system. I say that because I think with respect to the modern problem of terrorism it is a statement of fact that it is overwhelmingly an Islamic terrorist problem. It is committed by a certain warped version of a tiny proportion of some 2 billion Muslims around the world. 
Now when terrorism is practised against as it sometime is societies such as ours predominantly—not solely but predominantly Western societies—I defend our right to respond with lethal force. This bill in part is about giving the State—a small State but we are in control of events here—the power to respond with lethal force and with the full coercive powers of the State and I think that is appropriate. But I have always held the view that finally although we have to do what we have to do in order to try to minimise the threat of Islamic terrorism fundamentally the only long-term solution will come from Muslims and predominantly Muslim countries themselves. I do think that people need to reflect carefully on that reality. 
Having lived in a Muslim country for a number of years I have talked about this issue with probably hundreds I would think of Muslims. All the people I have talked to—and this would be the experience I am sure of anyone else who has lived in a Muslim country— realise of course that the ultimate threat is directed against them. They hate those people and they are deeply frightened as any rational person should be by where the next bomb is going to go off in Jakarta. They are deeply frightened by that prospect of course. But they are Muslims and when people insult anyone’s core set of beliefs and values which is what the debate in Western countries on terrorism sometimes veers into that person naturally has difficulty in cooperating with them. That is just human nature. So I think we have to understand basically that we are going to depend finally more than anything else on predominantly Muslim people themselves and their Governments and security forces to get on top of the problem. Although I like many other people have become enormously frustrated at the indecisiveness of the Indonesian authorities—they are not the only people involved of course—in their approaches to dealing with terrorism on occasions I think we have to recognise that we are in a joint struggle with them against a common foe. 
So this bill is partly about the interdiction of terrorism. It is also partly about the interdiction of prohibited exports that could be used for weapons of mass destruction. It does not take a great deal of imagination to see that finally in some ghastly sense those two issues could be linked. I think we have a very flexible system in place that gives the Government better tools to deal with those issues. Thank you. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Kia ora Mr Deputy Speaker kia ora tatou te Whare. I will start by referring to the report of the Foreign Affairs Defence and Trade Committee on this bill and in particular to the bit where it recommends that the word “reasonable” be inserted before the words “cause to suspect.” “Reasonable” is a word I have come across a lot in my many court cases over the years—reasonable use of force reasonable expectation what a reasonable person would do reasonable grounds to believe; the list goes on and on. So I have had a decent look at the word “reasonable” over the years. I was keen to see how the word was used in terms of border security. 
I note also that the bill gets right into defining what a “dangerous item” is such as ammunition a firearm an offensive weapon an explosive device and an injurious substance or device. The last item also adds the phrase “of any kind whatsoever”. That includes of course cigarettes and tobacco and a whole host of other things not listed in the bill. 
I note that when it comes to defining something as subjective as the word “reasonable” the gates are equally wide open. Indeed on at least 16 different occasions the test of reasonableness is proposed as the basis of judgment in this bill—such as: reasonable force may be used to detain someone officers may seize anything they have reasonable cause to suspect may be evidence or officers may detain a person if they have reasonable grounds to believe that the person poses a threat. Given that the bill does not define “reasonable” I looked up the word and found a whole host of different definitions. I am hugely concerned that if the purpose of this bill is to provide more effective border management then the definitions and instructions need to be clear and definite and not left to the interpretation of individual staff and different agencies. 
When this bill came before the House last year I spoke about how Maori understood the issue of managing our borders to preserve and protect our world and about the notion of kaitiakitanga—the preservation of our natural environment. I said it was our responsibility as Maori and as a nation to maintain a clean safe and healthy environment for ourselves and for future generations by promoting the protection restoration and enhancement of mauri within our natural world. So I cannot stress enough the importance of protecting our lands and our people from infectious diseases and biological or chemical threats. But that question of interpretation still remains. Who defines what is dangerous? Who determines what search criteria should be? What constitutes suspicious grounds? Those decisions can be very subjective very prejudiced and often racist. 
I would like the House to consider the role that racism plays in how we deal with immigrants. I will mention four New Zealand citizens who have complained of racial discrimination by Auckland airport customs staff. The first African-born New Zealand citizen BoubacarCoulibaly treasurer of the African Community of Auckland Region has been questioned and searched three times by customs staff despite having no criminal history. The second Auckland area manager for Housing New Zealand Margritt de Man who has dark skin despite her European origins has also been questioned four times and has had her luggage searched despite having had no goods to declare. Jamaican-born Auckland lawyer Colin Henry complained to the Race Relations Office that he was deeply offended by being singled out for attention while a crowd of mainly European passengers went past unquestioned. When he expressed his annoyance a police officer threatened to arrest him. Finally to add insult to injury South African - born former New Zealand Race Relations Conciliator Gregory Fortuin has himself been detained by customs officials. 
Auckland airport customs staff confirm that ethnicity is a basis for profiling. Ethnic profiling if it is not managed effectively and intelligently is a major concern because it becomes the basis of stereotyping and racial discrimination. 
Last month in the UK a Home Office report exploring the decision making of immigration officers confirmed what most darkies have long known to be true—that the practice of profiling on the basis of race ethnicity and religion is a fact. According to the report British immigration officers say they base decisions on “intuition” about people who “look the part”. But who looks the part and who does not as a result of society’s prejudices? So it comes as no surprise whatsoever that way more blacks and Asians get stopped for questioning than white folks. Coloured South Africans get stopped 10 times more often than their white counterparts. Coloured Canadians get stopped nine times more often than their white countrymen. 
The report’s authors say that this has nothing to do with racism though. They say that their decisions are based on socio-economic factors. Excuse me for sounding flippant but yeah right! Where have we heard that one before? That is the line this Government used for cancelling the closing the gaps policy. It is the line the Yanks used for overzealous policing of black districts and—to no one’s surprise—the New Zealand Government also used that line in justifying using Tasers in Polynesian communities here. Socio-economic factors be damned; it is out and out bloody racism. We need to see it and condemn it for what it is whether it is in London New York Paris or Auckland. 
In his article in the  
Guardian 
 in January 2007 entitled “The west persists in using race to decide who can cross its borders” Gary Younge wrote: “So long as there are nation states there will be borders and immigration laws to regulate them. The least we can do is drop the pretence that these laws are fair. They are not designed to discriminate between people but against them.” 
The Maori Party supports this bill at its second reading because we support the need for tightening security and protecting our environment. But we take issue with assumptions of what qualifies as “reasonable”—the adoption of racial profiling and border management practices here in Aotearoa; the behind-closed-doors decision-making processes regarding the bringing in of genetically modified organisms; the demand that we accept World Trade Organization decisions even when they work against our best interests; and free-trade agreements made without proper reference to Maori Treaty interests. We too want to keep Aotearoa free from threats but we also want a proper say in exactly what constitutes a threat. Kia ora tatou. 
Hon BRIAN DONNELLY (NZ First) 
: 
 I have been asked to take just a very short call on the Customs and Excise Amendment Bill (No 2). We do not have a member on the Foreign Affairs Defence and Trade Committee; however our caucus has looked very carefully at the provisions of the bill and the report by the select committee back to the House. I can say we are very happy with the bill as reported back and we will be supporting it through this stage. 
Bill read a second time.