Border Security Bill — Second Reading 
Border Security Bill — Second Reading 
[Volume:617;Page:13165] 
Border Security Bill 
Second Reading 
Hon RICK BARKER (Minister of Customs) 
: 
 I move  
That the Border Security Bill be now read a second time 
. This bill is part of a comprehensive approach by the New Zealand Government to keeping New Zealand secure and to ensuring that our export trade is facilitated expeditiously across foreign borders at all times including at a time of heightened international security concern. There is no question that we must address national security. The Border Security Bill will put New Zealand’s security on the front foot. The bill will enhance New Zealand’s international reputation as a reliable low-risk trading partner and will help make New Zealand a safe destination for the tourism industry. 
I want to thank the members of the Government Administration Committee for their work on this bill. They have proposed a number of amendments that will ensure protection of New Zealand’s borders while still respecting the rights of the individual. 
 The Border Security Bill amends the Customs and Excise Act 1996 and the Immigration Act 1987 as they affect border trade and security. In summary the changes will firstly improve the security of global travel and trading environments; secondly strengthen the gathering and sharing of intelligence; thirdly ensure better use of information to assess risk; fourthly enhance customs enforcement powers at the border; and fifthly strengthen and enhance immigration processes relating to persons intending to travel to New Zealand. 
I want to deal firstly with cargo security. Our export destinations are increasingly taking measures to ensure they do not import anything undesirable. The United States for example is introducing an approach that will put imports into either a red lane or a green lane. To qualify for the green lane the US must recognise the exporter as a trusted trader and his or her country of origin will count in that assessment. Otherwise the goods face automatic red lane scrutiny and the likelihood of added costs. The majority of customs administrations around the world including APEC members and the European Union are also working on trade security measures. 
These measures have the potential to slow down our trade and add costs to traders unless we go on the front foot. This Government wants to ensure that New Zealand’s export trade is seen as trustworthy and is moved expeditiously through the green lane of overseas border controls. To achieve that we must take responsibility for ensuring we are not exporting risk and we have to demonstrate that security assurance to our trading partners. 
The Customs Service has a four-part strategy to achieve that: accurate electronic information about all goods entering transiting or leaving New Zealand; intelligence-based risk assessment of those goods; targeted smart and low-cost examination of cargo identified as a potential risk using non-invasive or X-ray technology; and voluntary agreements to reduce risk—the Secure Exports Partnership programme. The Border Security Bill underpins that strategy. The legislation enables the Customs Service to access electronically the computerised cargo management systems of organisations in the trade and transport chain such as freight forwarders and consolidators. The bill also establishes the legislative environment for the Secure Exports Partnership scheme where Government and business work together to protect the interests of New Zealand traders. The bill and the systems behind it will enable the Customs Service to give assurance to overseas customs administrations that goods exported under the scheme are packed securely and pose no security threat and that there are no other goods packed with them. They then have to be conveyed securely and without interference to a place of shipment and then shipped. 
The aim of a supply chain security strategy is that all New Zealand trade will have the Customs Service seal of approval—either through the Secure Exports Partnership scheme or through risk assessment and examination prior to shipment. Our trade will then be regarded by overseas customs administrations as low-risk thereby minimising inspection disruption and delay and facilitating clearance on arrival. It will be up to individual exporters whether they participate in the Secure Exports Partnership scheme but it is clear from the level of interest that they are willing to do so. The Customs Service has over 90 applications from businesses interested in the scheme so far. 
The only concern that has been raised is over the funding of this and other parts of the supply chain security strategy. That is an issue that has been raised right across the industry both in submissions to the select committee and in consultation meetings with the Government. It is a fact that securing the supply chain costs money. However the benefit for traders from trade security is the facilitation of trade in an increasingly uncertain global environment. For New Zealand the main cost of enhancing trade security is in providing the Customs Service with the capability to screen shipments deemed to be at risk. To achieve this with the minimum disruption to trade flow the Customs Service needs cargo X-ray technology and more staff. The Government has already provided capital funding of $22 million to purchase equipment and set-up costs of $9 million in the current financial year. 
In recognition of the benefit to business of the facilitation of the movement of cargoes across international borders the Government will be looking to industry for a contribution towards the new costs of the trade security programme. Those new costs are approximately $20 million per annum for import export and trans-shipment clearance services. However partly as a result of representations made by exporters and others the Government has decided to take several significant steps to meet some of the concerns raised by the export sector over the level of contribution it might be expected to make both now and in the longer term. 
First the Government believes that given the rapid pace of change in international security requirements and given the significant changes in the international trading environment that have occurred since 11 September 2001 there should be a review of all Customs Service goods clearance charging. The review will examine the quantum and apportionment of charges for imports exports and trans-shipments and the basis on which Customs Service charges should be levied. The review will start after promulgation of regulations enabled by this bill with the results of the review being implemented no later than the first half of 2006. 
Second the Government will continue to contribute significantly to the total cost of goods clearance including a share of the new costs of the trade security programme. To help reduce the impact of the new charges on top of the other costs that exporters are facing and while the review is taking place the Government will provide an additional $8 million over the next 2 years towards the costs of Customs Service export clearance. That represents 50 percent of the new costs for export clearance being met by the Crown and 50 percent by exporters. The Crown will as a result be contributing 60 percent of the total funding requirement for export clearance in that period. The detail of how these charges will be collected is currently being discussed between business interests and the Customs Service. Once this bill is enacted the Act will require further consultation to be undertaken before the new charges are finally set. 
Let me turn now to other aspects of border security. International crime and terrorism involve the transnational movements of people goods such as explosives and money to facilitate criminal and terrorist activities. New Zealand needs to be sure it is adequately equipped to manage all of those threats at the border. We have seen a great deal of debate recently about individuals their presence in New Zealand and whether they pose a risk. As Minister of Customs my goal is that the Customs Service be able to identify intercept and effectively deal with those people at the border. For the service to be able to do that advance passenger information is essential. 
There are two elements to the travel information provisions provided for in the legislation. For immigration purposes the following will apply. Firstly airlines and cruise ship operators will be required to use electronic means to submit passport details for persons boarding craft for the purposes of travelling to New Zealand in advance of their arrival. The full implementation of the legislation will mean that passport and visa details will be checked automatically against electronic records held by the New Zealand Immigration Service. Any matches will trigger an advisory back to the airline about whether that person should be allowed to embark for New Zealand. As well as checking that passengers have met the legal requirements to enable them to travel to New Zealand this pre-boarding screening will assist in the direct detection of forged visas and passports so that fraudulent passengers do not get to New Zealand. While the Advance Passenger Processing system improves the likelihood of identifying fraudulent passengers or those who have not met requirements for travel to New Zealand the bill does not change any of the existing requirements regarding who is permitted to enter New Zealand. This form of screening of data is the best way to reduce New Zealand’s exposure to risk from people travelling here while at the same time maintaining a high flow of arrivals to New Zealand at any one time. There will be no refusal of holders of valid New Zealand passports or returning residents visas. 
The second equally important aspect of travel information gathering and analysis in this legislation is the provision for the Customs Service to access electronically the computerised passenger booking systems of travel operators and their agents. This will allow access to certain passenger or ticketing information. The Customs Service will access this information for the purpose of identifying persons who may present a risk to the New Zealand border. These provisions have been carefully developed to enable New Zealand authorities to have access to information without jeopardising the privacy of legitimate travellers. Again I am aware of the very detailed consideration that the Government Administration Committee gave to balancing the rights freedoms and privacy of individuals with the rights of the State to protect its citizens and its interests. 
Airlines around the world are responding to similar legislation from other countries. Here Air New Zealand has voluntarily led the compliance and all airlines are now providing the information voluntarily. 
The Border Security Bill also strengthens the Customs Service’s powers and controls over people crossing our borders illegally. Right now if a customs officer encounters a person who is unlawfully arriving from or leaving for a remote location and is not currently on a craft such a person is not subject to the normal level of scrutiny that a person arriving legitimately in a Customs Service - controlled area is subjected to. It is obvious that this translates to a considerable security risk for us and for our immediate neighbours so we are toughening up on the controls and we are empowering customs officers to deal with those situations. We are particularly targeting those suspected of being involved in transnational organised crime—terrorists people-smugglers etc. 
I commend the bill to the House. 
SHANE ARDERN (National—Taranaki - King Country) 
: 
 I rise to speak in opposition to the Border Security Bill. It is with a great degree of sadness that I have to do this. I acknowledge the work of the officials for the Government Administration Committee—of which I was a member for part of the time—because they did a thorough job and came back with some very solid recommendations as to how we should enhance and improve security at our borders. Unfortunately this Government is once again trying to sneak in a sneaky back-door tax—like another sneaky back-door tax I can think of that was introduced in Parliament recently. Here we are again with another sneaky back-door tax. 
I acknowledge that the Minister has backed down a little bit and is now prepared to wipe $4 million off the proposed $8 million per annum that the Government was going to charge exporters. The Government made that announcement today on  
Intranews 
 at 4.18 to coincide of course with the second reading of this bill. But it is a long way from where the Minister needs to go. 
The National Party said at the select committee—it is what we have thoroughly investigated and still believe and what we have put in our minority report—that the $19.753 million in extra tax is an arbitrary figure based on nothing that we could find. The Treasury papers we saw certainly demonstrated that there was no thorough investigation into what these border investigations would cost. 
Further this bill once again shows the grey area this Government is trying to introduce in terms of part user-pay charges. In New Zealand security costs have historically always been a public good met by the State. As the Minister said in his opening comments these changes came about primarily as a result of the 9/11 attack in the US and our need to be able to get through the extra security measures that the US has put in place. These are absolutely a security cost and should fall on the taxpayer as a public-good cost. They should not be shoved on to industry as this Minister is trying to do. 
If this bill proceeds as proposed something like 70 percent of the Customs Service’s costs will be now met by users. That percentage is higher than it has ever been in New Zealand and higher than I can find anywhere internationally as well. Seventy percent of all security-related costs for the Customs Service will now be met by users. That is a very high percentage. The Minister is not sure whether to nod in acknowledgment of that or to shake his head but that is what this shows me. 
Treasury guidelines stated—and this was presented to the select committee—that a very high threshold is being set in terms of what is a public good and what is not. I ask the Minister—and perhaps he is prepared to take another call to answer some of these questions—whether this is a public good. Yes or no? Is it a security cost? Yes or no? The Minister will say that exporters would not be able to get through the fast lane without the Government’s intervention. Yes I accept that that is true. The Government is supposed to intervene when a foreign nation starts to dictate what must happen at our borders. That is what the Government’s role is. What is the role of Government if not to provide security to industry and exporters? 
Hon Rick Barker 
: This is the member who voted for the privatisation of prisons! 
SHANE ARDERN 
: The Minister needs to get clear what is in the public interest and what is not and explain to people how he can draw on private prisons when we are talking about a security cost imposed on a nation by foreign nations in relation to trade—when to comes to getting products in and out of our country. I am sure he will take a call later on to explain that to us. 
National strongly opposes new clauses 7B and 8C which permit the introduction of this underhand back-door tax. It can be described only in that way; there is no other way to describe it. Industry accepted that the Government would not back down 100 percent and came back and offered the Government a 50/50 cost split. I thought industry was generous in coming back—it showed a sign of weakness and it should have stuck to its guns—but that is what it did. That is what the collective exporters importers and shippers of New Zealand decided they would do. 
 They came back to the Government and said: “Look clearly you’re going well beyond where Governments have ever gone before but we can see that you are not going to back down 100 percent so we are prepared to meet 50 percent of the cost.” What did the Government do? It slammed the door in their faces and said: “No way. At best we will come up with a reduction of about $4 million per annum on this $20 million tax on the exporters.” 
The Minister says that is 50 percent. It is 50 percent of the exporters’ costs—I accept that—but it is not 50 percent of the total cost. I have not worked out the percentage in total—I am sure someone here who is pretty quick with maths can work that out and make a contribution in a following speech—but the reality is that the Government has introduced a cost that has normally been met by the State. It can only be described as an extra tax. There is no other way of describing it. 
The Government which is enjoying the best economic times in the recent history of New Zealand and which has massive surpluses has seen fit once again to introduce another form of tax on our exporters who are the very heart and soul of our economy. They are the engine room that drives our economy and they have allowed the Government to come up with the best returns a Government has had in a long time. In talks with the Government they have decided that they will find a way to fast-track our exports with foreign nations which is something they should be commended for. I thank the Minister for his efforts there and the officials who advised him on that. So why can the Minister see the advantage of it at that level but not see that this cost is a public good that should be met by the State—as it has always been? 
In closing I say to the Minister that he should go back and listen to the concerns of industry leaders. The Prime Minister has indicated that she is willing to listen to some of those concerns so he should reassess his stance on it. He could do himself a lot more good politically by going back and saying: “Yes we concede now that this was an arbitrary figure plucked out of the sky and there is no basis for this charge.” He should accept that it is a tax and back down 100 percent on it which would be the honourable thing to do. 
STEVE CHADWICK (Labour—Rotorua) 
: 
 I rise to take a quick call on this bill. I also was on the Government Administration Committee and I refute the allegations of the member opposite that a sneaky tax was imposed. The Government had to move very quickly. We had to do something new and innovative to protect our export market and the member opposite knows that. We could not have a secure export partnership scheme without new costs. 
The Minister stated clearly today that the Government has listened to industry and has made a shift in its contribution. It will contribute to 50 percent. I was on the committee and heard the need to reconsider. We have reconsidered. If we want to export we had to move on our secure export partnership scheme. This is a result of that move. This is a very sound bill worked through very ably by the Government Administration Committee. I support this bill. 
DAIL JONES (NZ First) 
: 
 This bill is a kick in the teeth for the exporters of New Zealand for the workers of New Zealand for the trade unions of New Zealand and for everyone out there earning a dollar all day 24 hours of the day and night. It is a kick in the teeth for the sailors who go on the ships that take our exports overseas. It is a kick in the teeth for those people who load our exports onto aeroplanes around New Zealand and send them overseas. No wonder New Zealand First will be opposing this legislation! 
Not too long ago the Labour Party was saying in its election manifesto: “Funding such core responsibilities has a far higher priority for us than the meaningless dribs and drabs of tax cuts announced by our opponents.” That was a Labour Party election policy in 1999. Where did I get that quote from? It was in an answer to the House by the Rt Hon Helen Clark the Prime Minister when on 8 April she was asked a question by Peter Brown the deputy leader of New Zealand First. How could that have been a high priority for the Labour Party in 1999 but no longer a high priority today? 
A Government is elected to ensure the peace order safekeeping and security of a country. In ensuring the security of a country we ensure its borders from the point of view of both imports and exports. Barely 2 years ago there was an import bill in which the Labour Party introduced a $20 million tax on imports. Now it is going the other way and imposing a tax on our exporters. That tax will cause a great deal of difficulty to Air New Zealand and to shipping companies and the like—not only because of the tax itself but because of how it will be calculated. Added paperwork—added administrative work—is always a problem when yet another tax is introduced. 
The Labour Party has reneged on its views in the past. The Prime Minister was asked why the Government was introducing the tax on this occasion. She said that policy was honoured in full in the Government’s first term in office; it was not repeated in the 2002 manifesto. As I have always said about political parties it is not what they say in their manifestos that is important; it is what they do not say. One has to read a political manifesto not from the point of view of what a party says it will do but what is left out of it. That was left out of the manifesto at the last election and the lesson is here for us all. If the Labour Party leaves something out of its manifesto we can be absolutely certain that it will do it next time round and this is a classic example of that. 
We see no reason why a single dollar should be imposed by way of this legislation. It has traditionally been the responsibility of the State. During the Second World War did the Government impose a tax because there was a war on? Of course not! That was the responsibility of the State. During the First World War did the Government impose any tax? I do not know of any tax that was imposed then. Just because something happens in the United States does that mean we have to impose a tax? 
In the Second World War London was burning. We had all sorts of problems. There were U-boats off the coast of New Zealand. Did we impose a tax? No way! It is a specious argument for the Labour Party to suggest that because something has happened in one country overseas we should somehow impose a tax as a result. That is an absolutely pathetic argument. As correctly stated it is just another sneaky tax by this minority Labour Party Government. It has a $7 billion surplus and it will hand out money left right and centre next week. 
Where does that money come from? It comes from exporters and all those people who work their hearts out to try to earn a buck and make a profit. What will happen to them? They will be banged up for another $19.5 million approximately give or take. We are never quite sure how much the give is but we can be sure that the Government will take it again and again. It is another classic example of this Labour Party taxing business left right and centre. 
New Zealand First will be attacking this legislation in the Committee stage next week. We are looking forward to putting forward various amendments to try to overturn the actions of this minority Labour Party Government and its sneaky tax grab that is kicking all workers in the teeth. We will be vigorously opposing this bill in the Committee stage. 
IAN EWEN-STREET (Green) 
: 
 The Greens will be supporting this bill though it is a decision we have not taken lightly or quickly. The process of consultation on this legislation has been an object lesson in how not to undertake consultation. The bill first came before the Government Administration Committee without any mention at all of cost recovery. It was only after it had been through the select committee process and people had made their submissions that the Minister introduced a Supplementary Order Paper that did include cost recovery. It was only at that point that he asked the Greens—and I think we were the only party left at that stage to support the Government—for our support to get the legislation through Parliament. We said there was no way we would do that and he should consult with the players. To his credit the Minister did consult with the players. At that point the bill went back to the select committee and at least those people’s voices were heard. Whether the Government has responded in the way that members of the travel and trade industries would have liked is a different issue but at least their voices were heard in the select committee. I commend the Minister for having the gumption to say that he had made a mistake and at least he moved to correct it. 
Essentially the dispute boiled down to the fact that after September 11 in the United States the US Government moved to increase security. Obviously it did not want to have containers on board ships that could result in floating bombs nuclear bombs fertiliser or anything like that arriving in ports in the middle of big cities. The idea of having secure containers was very good. The problems arose with the process of getting to that point and determining who would pay for it. 
The Government was telling exporters from New Zealand that if they undertook to sign up to its plan then they would have a trade advantage. The Government said that if exporters got their product into the United States it would guarantee that the container contained what they said it contained and that a very strict regime was in place to make sure that the contents of containers complied with the manifest. So the Government was saying that that was an advantage to traders because when containers or goods arrived in the United States they go through what the Minister called the “green lane”. In other words they would simply arrive on the wharf and be moved off to their destination because they would be guaranteed to be free of potential bombs or other terrorist threats. The converse of that is that if New Zealand does not go down the “green lane” and have an approved security measure then every container would go through the “red lane” which would include processes like taking containers off ships putting them on wharves and opening them up and looking at the contents each stage of which costs money and time. Every trader and every exporter knows that time is of the essence—that when their goods arrive at their destination they need to get them to the customer. 
The Government argued that the security regime was an industry good because its processes would facilitate trade by getting goods into the US off the wharves and into the hands of importers or clients at their destination as quickly as possible. The converse argument of that came from the industry itself which said that national security for the United States and for New Zealand is a national good—a public good. The industry asked why it should have to front up with money for something that traditionally had been and should continue to be carried out under the auspices of the Government. Both those arguments had merit. I am delighted that the Minister has finally relented and said that the Budget will have a halfway stage. As I understand it the Government will put $4 million a year—certainly $8 million over 2 years—into the Budget which will cover 50 percent of the cost that was to have gone to exporters. At the end of 2 years there is to be a review and we welcome that as well. 
The Greens support taking a principled approach to this legislation. We have been urging the Government to undertake a proper review not only in terms of the export trade but of passengers as well. We are pleased to hear that the Minister has finally announced that a review will happen. On the subject of passengers there is also an element of human rights that we need to consider. We have concerns along with some of the submitters to the select committee about privacy issues—and this applies to passengers—particularly around the collection of personal details from travellers under the advanced passenger identification system. The subsequent use of that information could have an unreasonable downside for passengers particularly if there are inadequate controls on the information that is collected and on how it is used especially by foreign jurisdictions. We say that there needs to be a very tight rein on the information that is gathered on whom it goes to and on what it is used for. That particular point has been and continues to be a controversy that is raging between America and the European Union at the moment. It is an issue that we will deal with in the Committee stage. 
 The bill itself has a rightful place. We do need to improve the security of both inwards goods and inwards passengers into this country and to do the same with regard to our outgoing goods and passengers. The controversy as always comes down to who pays for it. There has been an ongoing argument which became quite heated between the industry and the Government about that. The Government urged people to appreciate that the added security was actually an industry good and therefore industry should pay 100 percent of the cost but conversely the industry said that it was a public good and the taxpayers of New Zealand should pay the entire cost of it. I am really pleased that we have come to what at least appears to be a reasonably rational solution with the Government agreeing to cover 50 percent of the disputed amount over the next 2 years and a review to follow that. As I said the Greens support this bill but not with great alacrity. 
GERRARD ECKHOFF (ACT) 
: 
 The word “principle” is occasionally mentioned in this House but not very often and even less is it followed through on. Members of Parliament and indeed members of the public who are listening to this debate will understand the concept of a public good. They understand that when the health life well-being or safety of a New Zealander is at threat there is no demand for cost recovery. When individuals are trapped on the face of Mount Cook or Mount Aspiring or when they are out in the ocean the search and rescue people are called in and they do their damnedest to ensure a successful outcome. Yet no cost recovery is imposed on those people. All of us know that in some circumstance at some time of our life we may need the benefit of search and rescue or the Government services to help us. 
Hon Pete Hodgson 
: The ACT party is now arguing over subsidies is it? 
GERRARD ECKHOFF 
: The ACT party has always been in favour of user-pays but I say to the Minister of Transport that the next time he sends out search and rescue to pluck a person from the ocean or off Mount Aspiring he should tell that person that there will be a 50 percent cost recovery. That is all I am asking for. That is the principle that is involved here. I say that there is as every other speaker has alluded to in this House a fundamental principle that when there is a public good then the public should pay. 
It is quite fascinating to note that the socialists here in the House who have a philosophy of all sharing in the wealth created in this country do not seem to accept that philosophy when the costs of creating that wealth occur. So I ask that Minister what the principle is behind this legislation. That is all that New Zealanders are asking and that is all that the tourism industry and trade industries are asking. They are asking to be given the principle behind this bill. They want to beable to see that what the Government is doing is fair and reasonable. They say that if they can see how they as individuals are to benefit from the whole process they may well accept it. But there has been nothing in response to that. This Government has yet again seen the cash cow of industry—the wealth producers of this country—and it keeps on milking it. We could argue that a few million dollars here or there will not make a huge difference but again I come back to the principle of continually imposing costs on industry. I wonder where John Tamihere the Minister for Small Business is. Why is he not speaking on this bill on behalf of small business—for example on behalf of the fellow I spoke to who exports high-quality fish to France? He told me that he now has to turn that fish into fish fingers because he cannot afford to go through the process of guaranteeing security. The costs are just too great for him to do that so we will lose out on that export. That is absolutely wrong. 
The next time we have members of the New Zealand public in need of the police why should we not then impose a cost recovery regime on them too? When there is a fire or when some resource is needed why should we not impose cost recovery on the people involved as well? Those are huge costs to this country. What about our armed services? Surely they are the ultimate in a public good. Many of those men and women go overseas to protect New Zealanders our nation and our resources for goodness’ sake as they did in the two world wars. Why should we not impose the cost of wars on everyone and tax the people who own those resources? The argument is a nonsense one from this Government. That is why industry has stood up and said it has had enough. In some respects I am actually quite pleased that the Government is imposing yet another whack on industry because it is just another nail in this Government’s coffin. Come election time—whenever it may be; hopefully it will be sooner rather than later—it will be very easy to stand up and speak to the people of this nation and to tell them what the Government has done in terms of imposing continuing costs on this country. 
It is no wonder that people like the McLachlan family referred to in a  
Sunday Star-Times 
 article cannot make ends meet. It is tougher to survive in this world than this Government understands—just competing against the world without compliance costs being imposed almost weekly by a Government that has no understanding of business. How many members of this Government have actually been in business and paid compliance costs? I do not think there are any. 
Hon Pete Hodgson 
: Me! 
David Parker 
: Me! 
GERRARD ECKHOFF 
: Well to be charitable maybe one or two have. That is the real problem. The meat industry and the farming industry— 
Hon Members 
: Ha ha! 
GERRARD ECKHOFF 
: I guess the Government can laugh at those sorts of things but the farming industry is not laughing. I can tell Mr Parker that the people of Central Otago will not be laughing when I tell them that Mr Parker thinks this legislation is fine and that it is wonderful to impose costs on farmers. He may just have a bit of a struggle on his hands at the next election when I inform them that he thinks it is perfectly fine to constantly impose such costs on them. 
I say again that the ultimate responsibility of a Government is to provide security for its people. That is why we pay 39c in the dollar in income tax—not for the Government to turn round and say we are paying $7 billion more in tax than we need to but it has a $20 million cost here that it is going to grab off us again so it can fire all that surplus into the welfare Budget next week. That is the real issue and the people of this country understand that. That is why they have reacted strongly against this bill. They have bent over backwards to accommodate the Government and the Government has constantly moved away from them. The terrible events of 9/11 have imposed the requirement for additional security and every country recognises the need to up its security—absolutely; there is no question about that. But the real issue is that if there is a public good involved here then the taxpayer of this country who benefits every time resources pass over a wharf or into an aeroplane will benefit. We will all benefit from that. It is not just the meat industry or the farmer who will benefit; it is also the freezing workers and the people who have good jobs that have been created by industry. They will benefit from this measure. Every person who pays tax will benefit—indeed every New Zealander who receives benefit from the Government will receive benefit from this country having first-rate security. That is all we are asking for. 
I say as an ACT party MP who absolutely has a philosophy of user-pays that I have no problem with regard to paying my fair share. But I do not expect nor does industry—especially industries like the meat and wool industries—to have to pay twice and maybe even three times. That is all that the farming community and the export industries are asking for: for the Government to be fair about this issue. But the Government has thumbed its nose at them walked away and said they have to pay the costs because it has the power to impose them. Well if that is consultation I think it is a really good indication yet again that this Government’s days are numbered. 
PAUL ADAMS (United Future) 
: 
 I rise on behalf of United Future to oppose the second reading of this bill. I find it interesting that all the Opposition parties opposing this bill are not opposing the need for it; rather they all speak against the cost recovery in it. 
There is no doubt that the terrorist strike of 11 September 2001 aroused the United States from a strategic slumber and spurred Washington to act to protect its borders. On that day the United States experienced a terrible new reality: the importation of external terrorism. This reality served to galvanise the US Government—and indeed all Governments—to put in place new standards of border security. The Bush administration eventually moved to overhaul completely its border control security measures against terrorism and other suspicious activities related to cross-border crime. That resulted in the US Container Security Initiative. The bill before us today is driven principally by the need to respond to the US Container Security Initiative although New Zealand’s overall supply chain security is designed to cover all our exports. 
It should be noted that the principal driver of security over imports is the protection of New Zealand’s domestic interests. The need to increase trade security cannot be disputed. United Future acknowledges this and supports the practical proposals contained in this bill. However despite our acknowledging the necessity for action and approving the measures proposed we cannot lend our support to the Border Security Bill in its current form. This is because we fundamentally disagree with the Government on the question of who should fund these important security initiatives. The Government swimming against the tide of both industry outrage and common sense has decreed that the private sector should bear a large amount of the cost. 
Certain guiding principles form the basis of United Future’s rationale for not supporting the bill. We fully recognise that it is for the Government to determine which border and supply chain protection measures are needed to ensure the protection of New Zealand and our critical trade links. The Government would be remiss if on the back of the measures required by the United States of America it did not move to protect New Zealand’s trade with the US and other trade links where necessary yet it should be noted that the Government would also be remiss in its duties if it did not move expeditiously to ensure the security of its citizens from threat of acts of terror—whether passing through or brought into New Zealand. The defence of the realm is at the very core of any Government’s responsibility. We are engaged in a war of terror that will likely last for decades—a war against all New Zealanders. 
We do not support the Government’s irrational and shortsighted claim that the protection of New Zealand’s trading supply chain will benefit only exporters and importers. The protection of these chains of supply is vital to the maintenance of the national economy. This relationship is particularly important in New Zealand with our heavy reliance on the export economy. We should be supporting the export sector in every way possible. It is definitely a public good the success or otherwise of which impacts on all New Zealanders. United Future contends that the foundations of this bill are rooted in the overarching principle of national security. It is this particular principle that the Crown and the Crown alone has a duty to uphold. Simply stated it is an extraordinary and untenable position to propose that private exporters and importers should be encumbered with a large percentage of the cost involved. 
Added to the weight of the argument against the Government’s proposed levy are reports from independent research-based organisations. Two reports in particular one from the New Zealand Institute of Economic Research and another from Capital Economics both strongly and unequivocally refute the Government’s argument for private good. Instead they passionately affirm the obvious public-good characteristics of the initiatives. Even Treasury in its  
Guidelines for Setting Charges in the Public Sector 
 which sets out very clearly for agencies such as the Customs Service which services are appropriate the level of any charges and which parties should pay is somewhat reluctant to wholeheartedly box in the Government’s corner. This speaks volumes as to the error the Government has made. 
 The overall conclusion of all of this is that the Government not only has fumbled the ball with regard to listening to the concerns of industry but also has used false logic to justify its decision. Let me restate that these proposed initiatives though needed will be there to protect the economic and physical security of the nation as a whole and the Government should therefore fund their ongoing implementation in line with its core responsibility of protecting the national interest from the threat of terror which is really what this bill is all about. United Future is opposed to it because we believe that the public safety is a Crown responsibility. United Future is opposed because as has been pointed out ad nauseam to the Government by the trade and travel representatives of this country it is wrong to send our importers and exporters the $20 million bill involved. We are opposed because two independent research reports one from the New Zealand Institute of Economic Research and the other from Capital Economics have both unequivocally refuted the Government’s private-good arguments. We are opposed because they breach Treasury’s own  
Guidelines for Setting Charges in the Public Sector 
. 
Simply stated the Government has got this one wrong. It appears that it decided to lumber a large cost on our trading sector almost by way of knee-jerk. The subsequent process that it has followed in post factum entering into discussions with representatives of that sector has been deeply flawed from day one. We are disappointed therefore that even when those realities became obvious the Government rigidly adhered to its original position. That position is unreasonable and unprincipled and United Future will be voting against this bill. 
PANSY WONG (National) 
: 
 The National Party will definitely vote against this bill. I just want to take a short call to make a very important observation this afternoon. The Opposition members apart from the Greens have all stood up and given two very good reasons for not proceeding with this bill. One is on principle because of the definition of “public good” and the second is that nobody is fooled that this is a levy or cost recovery—it is simply a tax. When a Government cannot justify it it is nothing but a tax. Yet this bill will pass its second reading because of the Green Party. 
It is very interesting to look at the Green Party whose members always claim they have principles and are the guardians of democracy. They say they stand up for principles. I am not too sure what deal has been struck but whatever it is it must be pretty scary because that party is prepared to ditch its principles and support the Labour Government’s tax grab which is what this bill is. 
 This week or next week—soon—we are going to see the Hon Dr Michael Cullen playing Father Christmas. He will be giving away early Christmas presents in anticipation of next year’s election. We were told that the Government is looking at a revenue surplus of $7 billion. But it continues to punish the wealth creators of New Zealand our primary industries our exporters who are already having a hard time because of the high exchange rate that is facing them the Labour Government’s increasing compliance costs and the 17 other new taxes that have been imposed on New Zealanders particularly the business sector. 
I make the observation that I hope the Green Party between now the Committee stage of this bill and the third reading demonstrates once and for all to the New Zealand public that it is a party that stands up for principles and will not strike a deal to back the Labour Government on this legislation which is nothing but a tax grab in light of the $7 billion surplus which this Government will use to buy votes rather than relieve the burden on our farming and export sector which is our wealth creator. I look forward to the Green Party coming back to its principles changing its mind and making sure it sends the right message to the export sector to the people who already are struggling in terms of making sure their products are sold overseas to the benefit of all New Zealanders. 
A party vote was called for on the question  
That the amendments recommended by the Government Administration Committee by majority be agreed to.  
Ayes 62 
New Zealand Labour 51; Green Party 9; Progressive 2. 
Noes 50 
New Zealand National 24; New Zealand First 13; ACT New Zealand 7; United Future 6. 
Question agreed to. 
A party vote was called for on the question  
That the Border Security Bill be now read a second time. 
Ayes 62 
New Zealand Labour 51; Green Party 9; Progressive 2. 
Noes 50 
New Zealand National 24; New Zealand First 13; ACT New Zealand 7; United Future 6. 
Bill read a second time.