Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill — In Committee Speaker Recalled In Committee 
Text is incorporated into the Bound Volume 
Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill — In Committee Speaker Recalled In Committee 
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Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill 
In Committee 
Clauses 1 and 2 Parts 1 and 2 and schedules 1 and 2  
Hon MAURICE WILLIAMSON (Minister of Customs) 
: 
 I want to take a very brief call just to remind members of what the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill is about. It has been a long time in the Parliament and now that we are up to the Committee stage it would be worthwhile just covering the three major headings that the bill has been done for.  
There are three categories of amendments in this bill which is amending the Customs and Excise Act and the Biosecurity Act. The amendments are required to provide for planned information-sharing by the New Zealand Customs Service and the Ministry of Agriculture and Forestry. As time evolves and computer systems get more sophisticated information sharing is vital. The bill provides for developing information-sharing arrangements with other agencies in the future as well—things that allow both the Customs Service and the Ministry of Agriculture and Forestry to get on and do their jobs.  
The second part of the bill enhances the effectiveness of law enforcement. The Customs and Excise Act has a variety of compliance and enforcement mechanisms some of which were put in place in 1996 with relatively little review since then so I think that is important. These mechanisms no longer have the deterrent effect needed or are proving to be unnecessarily complex to administer with little benefit. The amendments will indeed strengthen the Custom Service’s penalty regime increase deterrence and provide greater distinction between enforcement for minor offences and enforcement for the more serious end of town offences.  
Finally the third part of the bill is to provide clarity to existing legislation provisions or to address new situations that have emerged since the Customs and Excise Act was passed.  
Can I finally say that technology is changing the whole way that both the Customs Service and the Ministry of Agriculture and Forestry do it and there can be no better example to members of this Committee than New Zealanders going through all of our international airports who can now go through SmartGate on departure and SmartGate on arrival and have a computer electronic system do all of that processing for them. And as the Joint Border Management System with the Customs Service comes into effect and as that is developed this particular bill and the provisions of this bill will be needed. 
KRIS FAAFOI (Labour—Mana) 
: 
 It is nice to see members opposite so happy that I am taking a call on the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill. Can I thank the Minister in the chair the Minister of Customs for his brief synopsis of the bill; it has been some time since it has been before the House and again for his glowing praise of the SmartGate system. You know it is a rare occasion when we talk about SmartGate in the Chamber so it is nice to hear some praise around SmartGate!  
This is a bill that the Opposition is supporting. We think that in this day and age—and we have seen other bills before the House in recent days looking at a time of increased technology and better technology—we should be making sure that we can share information between agencies to make sure that they can do their job more effectively and efficiently. We think especially that in the job and task of policing our borders we should take advantage of the increased technology and make sure that we can keep our international reputation of having a safe and secure border.  
Can I just make the point again that this bill is about the effectiveness— 
Hon Tau Henare 
: Let’s talk about border control. 
KRIS FAAFOI 
: Excuse me Mr Henare? 
Hon Tau Henare 
: Let’s talk about border control. 
KRIS FAAFOI 
: Border control—someone lets you back in Mr Henare so in terms of data sharing between the Ministry of Agriculture and Forestry and the Customs Service I am sure you will not pop up on their radar. Effectiveness and efficiency letting our Customs Service agents and Ministry of Agriculture and Forestry agents do their job better at the border is what this bill aims to do.  
Can I thank the Minister for responding to concerns that the Labour Opposition had in the previous Parliament around the sharing of information and the privacy of that information. I know that my predecessor in the customs portfolio Su’a William Sio certainly had some concerns when this bill was introduced into the House around the provision for privacy and it is good to see some changes have been made. One for instance is that the Privacy Commissioner will look at this after 5 years to see whether the level of information or type of information that is being shared between these border policing agencies is appropriate. Can I also say that it is great that we are looking at making sure we can be more effective and efficient at the border.  
But we must also have suitable and adequate resources at the border to make sure that we can effect some of the intelligence and some of the efficiencies that we can get from these new systems. Some of the noises made recently from the National Government around its move to scale back numbers in the Public Service are a concern when we are spending a significant amount of money to increase intelligence and maybe the Minister in the chair might be able to clarify that. In the first instance it was thought that the system was going to cost about $75 million and there was some suggestion that it might rise to around $200 million. Maybe the Minister in the chair might be able to clarify that.  
But going back to my earlier point it is a concern around the noises that have been made by National—[ 
Interruption 
] Yes some of them may not have eaten; they are getting a bit ratty. It is a concern around some of the noises that have been made by the National Party in terms of cutting the Public Service as to whether we will be able to take advantage of some of the efficiencies that come from information sharing and may come from this bill. We do have serious concerns around the level of resourcing especially when this is a party in Government that said in 2008 that it would cap and not cut the Public Service then over 2000 jobs went missing over the last term of Government. So we do have serious concerns around the ability of the Government to implement some of the efficiencies and the effectiveness that we may benefit from from this bill and the investment in better technology if we do not have the people on the ground the people at our borders to make sure that we can benefit from the move that is in this bill.  
Also it was good to see some changes around the regulation-making powers that the Minister may have. It is good to see that he is going to have to consult with the agencies concerned in this information-sharing exercise before he expands the amount or the type of information that these agencies can share. Also there is a provision within this bill to make sure that again the Privacy Commissioner is— 
TIM MACINDOE (National—Hamilton West) 
: 
 I will take a very short call. In fact I was going to thank the member for Mana who I have just discovered is Labour’s new customs spokesman for his comments—his supportive comments initially—and in particular for his acknowledgment of the work the Minister has done in order to take things on board.  
I have to say that latterly in his speech I think the member moved well away from the actual focus of the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill so I would like just to come back to that and to reiterate a point that the Minister in the chair the Minister of Customs has made and that is that planned information-sharing is logical. It is cost-effective. It is efficient and most important it is increasingly vital for our customs officers in order for them to be able to operate successfully in the very important work that they do. There is no question that their role is a demanding one. They have to be vigilant all the time. What they do matters hugely to New Zealand.  
This bill recognises the technological advances such as SmartGate which the Minister and Mr Faafoi have both referred to. Our Joint Border Management System has greatly increased the speed and the ease of travel and that is great for all of us who travel internationally but of course it puts extra responsibilities on to those customs staff and others who monitor and control our borders. This bill not only moves with the times; it gives them the tools they need to do the job. It is something that I believe is warmly welcomed in the House. I commend the Minister for the work that he has done and I commend the bill to the Committee. 
Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman) 
: 
 I stand up unashamedly as the biosecurity spokesman for Labour. Although we have indicated our support for the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill can I say I raise some serious questions. National members will laugh about it because they are the party that has slashed biosecurity funding.  
If this is a SmartGate then I will take us back 100 years to when farmers invented the Taranaki gate. I am sure they considered it smart as well but now we need not a Taranaki gate; we need a safe door—that is not one that is locked permanently but one that is opened when people meet the requirements and know the code. What is happening here today every day in this country is that we have a Taranaki gate for biosecurity when we need a safe door. At no time in this country’s history has biosecurity and the threat of an incursion been greater. We have more people and more goods coming over our border every day than ever before. This Government thinks a smart gate is a Taranaki gate.  
I have to say that this bill as has been specified by the Minister of Customs and others attempts to do information sharing. A great idea—I cannot argue with that. The issue is what is happening in front-line biosecurity as both agencies—the Customs Service and MAF Biosecurity—have been moving in this direction. This programme has been around for a wee while and I have colleagues who may talk about that.  
What has been happening? Take for example Auckland International Airport—Auckland biosecurity staff. “Government has not hired any front-line staff for at least 3 years at Auckland Airport.” It goes by many names: sinking ceiling cost cutting attrition. People have been pregnant they have left they have retired and they have been on their OE but not one of them has been replaced at Auckland Airport. Is that a smart gate? No way. I feel very reluctant to offer support for this bill when the National Government has taken resources from front-line biosecurity people and placed them into one of Mr Williamson’s little technology projects.  
Well we can make progress through information sharing; there is no doubt about that. But we have claims that if you have an Australian or New Zealand passport you can virtually import anything into this country without challenge. Can I say that there have been—and you see them occasionally if you travel the borders—dogs. In fact this bill says it is illegal to harm a customs dog or biosecurity dog—a great move. How many of them are there? How much work are they doing? How much protection are they offering us? I put to you from firsthand information that I have received that the dogs cover about 1 hour a day of a 24-hour operation—1 hour per day. There are some more dogs being trained that is true but what happens is that they take the dogs from the airport to the port or the mailroom and they shift them around. Mr Williamson is smiling because all the reports he gets from all his managers say it is all fine it is all OK they are covering it all off.  
When front-line biosecurity staff are alarmed they are stressed. Those people who are truly committed to border protection see people walking through—in fact having their passports stamped to walk straight through without any checks at our airports. Now Mr Williamson is aware of this because he has been given this information. I do not know what he is doing about this. He is proceeding with the bill because he thinks that sharing information on computers—and to be fair to him he has been a consistent advocate for computers and technology; I acknowledge that. I am slowly catching up myself. But that is no replacement for the front-line protection that we need in this country every single day.  
There is a view among biosecurity staff that the next Minister in charge of biosecurity will soon be responding to the next incursion—imminent and inevitable. That is what they think because they are unable to carry out the duties that they know are necessary at the front-line borders be it at the port or be it at the airports. We are covering the whole thing— 
The CHAIRPERSON (Eric Roy) 
: No no let me just respond because I am on my feet. I made the comment earlier that just because we are having a debate on all clauses and schedules of the bill it does not mean we talk about anything that is broadly under biosecurity. It should still pertain to the bill and this is an information-sharing bill. I ask the member to just contain himself. 
Hon Trevor Mallard 
: I raise a point of order Mr Chairperson. I refer you to clause 7 “Regulations relating to entry of goods for export”. I would have thought that a regulation-making power in that area which gives specifications in that area would be about as broad as one could get as to the possibility of making regulations in this particular area. I would have thought that under that clause just about anything would go.  
The CHAIRPERSON (Eric Roy) 
: No it will not. It has to pertain exactly to what that clause actually requires. It does not allow any kind of debate on biosecurity. It must pertain if the member is using that to clause 7. 
Hon Trevor Mallard 
: I raise a point of order Mr Chairperson. I apologise and I regret the fact that I appear to be arguing with you. That clause is an amendable clause. That is a clause that is headed “Regulations relating to entry of goods for export”. The member could propose anything to do with goods coming in for the purpose of exporting them if he so chose. It is about as broad as you can get. In a Committee stage it does not have to be the exact words here; it can be any addition to that header that comes within the scope. My argument is that anything would come under that scope. 
The CHAIRPERSON (Eric Roy) 
: It is about the amendment to the clause and I have made that point. 
Hon DAMIEN O’CONNOR 
: Thank you to my colleague; I think he is right. I will stick to the bill as always. The sharing of information about every aspect of biosecurity and customs is no doubt the objective of the Minister and that is why I make comment on this.  
Can I go to the issues of fines. Minimum fines are increased from $50 to $200 in the customs area. They have already been increased in the biosecurity area and I think it is important because there is uncertainty as to what this might do. Will it improve the situation or not? The firsthand evidence of what is happening in biosecurity now is that firstly passengers are not made aware of their rights. They simply get slapped with—for biosecurity purposes—a $400 fine and told that that is it: pay it or nothing. Of course they are not informed of their four options the problem being that the resources taken for the Joint Border Management System have been taken away from training for front-line biosecurity officers who have to impose these fines. That is what is going on here now. I have firsthand information regarding that. The Minister has firsthand information regarding that and I hope that he will take a call and hopefully deny that that is occurring. But I suggest that he probably is not in that situation.  
One other point that I think pertains to this legislation is the fact that MAF Biosecurity has moved to implement a new computer system. It is called MAFPAX I believe. It was imposed on staff who have effectively rejected the use of it because it takes too long and it is too complicated to record the data. If this is the data that is going to be shared but front-line officers do not have the training or do not have the time to put it in the system then what progress are we making? Are we just kidding ourselves here? Will the Minister Mr Williamson be able to say that we have got the most sophisticated information-sharing system in the world with the Minister responsible for biosecurity saying we need to gather $100 million to take on an incursion because we have had something slip through the border? That is the likely outcome of the current Government’s approach to biosecurity.  
We need an independent review of what has occurred in biosecurity over the last 3 years as we have moved toward the Joint Border Management System. I hope the Minister in the chair will get up and give us that assurance. If he will not then I have real trouble supporting this bill and the so-called progress we are making on border protection for this country. The Minister cannot deny claims and information given to him firsthand in the hope that it will go away and that officials will give him reassurance that all is hunky-dory. Well it is not. I have spoken to people from Christchurch who are in the same dilemma—that is staff working are unable to speak out publicly. They are committed to border security and biosecurity but they do not want to speak the truth for fear of losing their jobs. 
Dr CAM CALDER (National) 
: 
 It is a pleasure to rise and take a brief call on this bill the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill. The name is encased in the title very well. I am particularly interested in the way in which this bill helps us combat the ravages of P. In our last term our Government made it very clear that we were not prepared to stand by and see families young people and in fact all strata of society affected by this appalling drug. We are pushing back in terms of the harm done by the abuse of alcohol. The Alcohol Reform Bill is the first push-back in 30 years of progressive liberalisation of the alcohol laws.  
But the Prime Minister announced the war against P on three fronts and these fronts are reducing the availability of the precursors of P in our domestic market giving the police more tools and more manpower to deal with the illegal P labs and of course closing the door to the raw materials coming into our country. This is where this bill is so important.  
The schemes of the drug lords are fiendishly clever. We have all heard—and I remind you if you have not heard—of a shipment of kitchen granite brought in from an Asian port. Right in the midst of these slabs of granite which were hollowed out were kilos and kilos of the precursor to methamphetamine. It was only the good work the surveillance and tracing by the Customs Service and the sharing of information—and in the Budget in 2010 the Government put in almost $6 million to improve the way the Customs Service can surveil and trace potential drug shipments—that allowed this to be intercepted. The information sharing between agencies can only help this. The production of 169 kilos of methamphetamine was stymied by the interception of the precursors for this foul drug.  
This bill is an excellent bill. It will increase communication among our agencies. I commend this bill to the Committee. 
DENIS O’ROURKE (NZ First) 
: 
 New Zealand First supports all parts of the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill. However we do have some concerns and reservations especially in relation to the privacy of personal information notwithstanding however the important role of the Privacy Commissioner as set out in the bill. The important part I think is new section 282B inserted by clause 24 which empowers the sharing of border information between what are called accessing agencies and holder agencies. However the only definition of “accessing agency” or “holder agency” is whatever is to be set out in the regulations and we do not at this stage know what that would be. New section 286A inserted by clause 25 allows regulations to specify “any agency or any class of agencies as an accessing agency:”. So that is very wide. It can include companies such as airport companies as well as Government departments port companies and so on. We do not really know how wide that is so that is something of a concern for us.  
Nevertheless New Zealand First does support the new provisions in the bill in so far as they allow appropriate agencies to share border information and we accept that that will better and more efficiently and effectively allow those agencies to carry out their duties. We think the provisions in the bill for those purposes are sensible and necessary and make good use of new technologies. The reservation we have however is that the provisions really contain no clear limitation on the types of agencies that can access the information and we think no adequate control on what the information may ultimately be used for. All this relies on ministerial discretion and on what ultimately goes into those regulations.  
So the concern in particular that we have is that information may reach the wrong hands and be misused may be passed on to others—perhaps unofficially—and may not be shared for border security or related reasons. I note that the Board of Airline Representatives of New Zealand did suggest a limitation along the lines that information sharing should be limited only to those agencies that have a border security function. That may be appropriate but it may be a little too restrictive because there will be related functions that are important as well.  
But of more particular concern to me is that the accessing agency may access and use information for private commercial reasons. To deal with this what New Zealand First would have liked to see in the bill is an addition to new section 286A(2)(c) relating to matters to be considered by the Minister in respect of those regulations. We would like to see something like: “whether the personal information accessed might be commercially sensitive” or “might confer a commercial advantage on the accessing agency”. There is nothing of that nature in the bill which we think is something of a disappointment because it does impinge we think on that principle of private personal information requiring adequate protection.  
I also note that the report of the Justice and Electoral Committee refers to new section 286A(1)(e) which refers to regulations made for border information sharing that may prescribe “the conditions under which an accessing agency may access border information …”. But this differs from the committee’s advice which says “provide a means for Government agencies to place controls on the way information provided to commercial interests could be used;”. So the new section 286A(1)(e) does not do this. It does not provide a means for the holder agencies to place controls on use for commercial purposes. It only allows regulations by way of Order in Council to prescribe conditions under which accessing agencies can gain access. So it is uncertain whether that provision would be effective to control use for commercial purposes. Again the broadness of amendments allowing access and the lack of specific controls on the use of commercial purposes are a concern for New Zealand First. There was a need we think for section 286A(1)(e) to be further tightened up in the ways that I have mentioned.  
I would like to turn now to the new provisions relating to biofuels. Again New Zealand First supports the amendments especially to section 74(2)(c) which exempts home production of biofuels and biofuel blends from licensing requirements if for personal use if not for sale and if manufactured on land on which the manufacturer’s house is located. The amendment also exempts home-produced biofuels from excise duty which we also think is appropriate and consistent with exemptions for home-produced tobacco and alcohol.  
However I do have a concern about the amendment to section 2 relating to the definition of biofuel. This refers to fuel production from biomass but there is no definition of biomass. So there is a risk that fossil fuels could be included as a fuel produced from biomass thus beating the meaning of the Act in relation to exemptions for biofuels. The dictionaries of are no assistance on the term “biomass”. They refer to biomasses as “organic matter that can be converted into fuel”. So that could let fossil fuels in we think. However if we look a little bit wider for example at Wikipedia it says: “Biofuel is a type of fuel whose energy is derived from biological carbon fixation. Biofuels include fuels derived from biomass conversion as well as solid biomass liquid fuels and various biogases. Although fossil fuels have their origin in ancient carbon fixation they are not considered biofuels by the generally accepted definition because they contain carbon that has been ‘out’ of the carbon cycle for a very long time.” So for that reason I think the definition as it is will just survive and be workable. However it would have been preferable to see a better definition in the bill. With those reservations New Zealand First will support the bill as it is. 
Hon Trevor Mallard 
: Mr Chariman— 
Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman) 
: 
 I hate to interrupt my colleague Mr Mallard—it is not my style—but I seek leave to table a letter received in my office on 14 February dated 4 January sent to the Minister for Primary Industries claiming that— 
The CHAIRPERSON (Eric Roy) 
: That is enough. I will put the leave. Leave is sought for the tabling of that document. Is there anyone opposed to that course of action? There is. [ 
Interruption 
] You know the rules. Leave was put; leave was refused. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I am just flabbergasted by the lack of cooperation from the Government which is looking for cooperation from the Opposition. I would like to ask the Minister of Customs a few questions around the regulation-making powers that sit within the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Bill. I ask him whether he makes them himself whether there is a requirement to take them to Cabinet and whether he had any discretion in this matter. Are they the sorts of regulations where he just rubber-stamps the recommendations of the department? If that is the point then there is no point in having the Minister involved in making the regulations because we know with this Minister—in recent years at least—that there has been no sign of a mind of his own. There is no sign of his being able to make an independent decision to take the interests of the country to heart and to do what is important for the country. I just want the Minister to get on his hind feet at some stage and indicate to the House whether in fact these powers give him any discretion or not or whether he is just a lapdog and a puppet of the department that is concerned. 
Dr Cam Calder 
: I raise a point of order Mr Chairperson. The member in question raised a point of order when I referred to Geppetto some years ago. I do not think it is appropriate to call anyone a lapdog or a puppet in the Chamber. 
Hon TREVOR MALLARD 
: Speaking to the point of order I think that in that particular case we were talking more about the family of Pinocchio and calling someone a liar. I am certainly not calling the Minister a liar. 
The CHAIRPERSON (Eric Roy) 
: I think the member is just sort of inside the scope of what is acceptable—just. 
Hon TREVOR MALLARD 
: As my kind colleague the Attorney-General’s cousin has pointed out there is a question about whether he could make independent decisions or whether he has to have the intellectual giant Jonathan Coleman assist him in making this sort of decision as to whether to make recommendations for this sort of regulation. Between them frankly I have more faith in Maurice Williamson. If he was going it alone I think—[ 
Interruption 
]—no I should not have more faith! He has no faith in himself. He agrees with the High Court. He agrees with the High Court. It has no faith in him either to make any sort of recommendation or any sort of decision according to the law.  
There are a couple of other points. I do want to acknowledge in this question of information sharing and computing generally that this Minister at least in the past—and I think Peter Dunne will remember; my colleague Annette King will probably remember; probably no one else in the Chamber will remember—was the Minister who stood up against Jim Bolger in opposing the INCIS. I want to ask whether the courage and style that he had then is something he is prepared to carry through and to tell John Key now. He was very good at that time at saying what could be done and what could not be done and I would be very interested to hear whether the courage that the member has shown in the past is continuing through to his contributions as part—[ 
Interruption 
]—no it is not. No it is not. He has been beaten up by the High Court. He shakes his head and he says: “I had a chance of convincing Jim Bolger—I failed—but I have no chance of convincing John Key what is the right thing to do as far as information and communications technology is concerned.”  
Turning to the more specific parts of the bill now I would like to ask the Minister what the difference is between a dog used for customs purposes and a customs dog. What is the difference between a dog used for customs purposes and a customs dog? 
Chris Hipkins 
: Poodle. 
Hon TREVOR MALLARD 
: No it is nothing to do with the pedigree. There is no doubt that if this Minister is involved it is a mongrel. We are being asked to change the law to change the term from a dog used by customs to a “Customs dog” and I want to know what the difference is. Why are we doing this? Why is it so important?  
I would also like to ask him to help explain to the Committee the interplay in clause 13 of the bill between new sections 128 and 128B when it goes to definitions of “materially incorrect” and the calculation of amount of penalty. I note that it appears that it refers to any error—any error or omission—in relation to the following matters. So if for example a full stop is left out of the overseas supplier’s identity if a tariff item number is one digit out if the zero or the decimal point is in the wrong place or if there is a currency conversion error that section catches it as being materially incorrect. As a result that means that there is an obligation under new section 128B around the calculation of the penalty. I accept that for the vast majority of these goods of course there are no tariffs and therefore there are unlikely to be any penalties under section 128B(3)(b) where there is a dollar amount. But notwithstanding that under section 128B(3)(a) there is a $200 penalty for any material error. Unfortunately “material error” is defined so widely that the misapplication of a full stop— 
Kris Faafoi 
: Really? 
Hon TREVOR MALLARD 
: Well it actually says: “materially incorrect means—(a) for an entry under section 39 that the entry contains an error or omission in relation to any of the following matters:”. It does not mean that you got it completely wrong. It does not mean that you put something down that is false. That is where the error or omission is made knowingly—not that anyone would knowingly leave out a full stop; clearly that is caught under section 128B(3)(b)(iii). I do not think there is any suggestion of that but under paragraph (b)(ii) or (iii) or under “materially incorrect” paragraph (a) it appears that “material” in the normal sense of actually making a difference and in particular where something is deliberate—although in this case of course there are errors that are “grossly careless” or “did not take reasonable care”. I think it is fair to say that missing out a full stop or a dot in an email address probably could come into the category of not taking reasonable care. I am not sure and I want to make sure that we are not catching here more than it is the intention of the Government and the Committee to catch.  
I think in summary I am seeking some assurances from the Minister around the width of the definition of “materially incorrect” and how that interplays with the penalty clauses. I would like him to make some comments about dogs and the effect of the change in the law here. Also I would like some sort of assurance from him that his previous good work in ensuring the integrity of the Government’s information and communications technology system will continue.  
KRIS FAAFOI (Labour—Mana) 
: 
 Thank you Mr Chair for allowing me to have a second contribution to this bill. I would just like to start this contribution with reference to Tim Macindoe the member for Hamilton West—Hamilton West? 
Hon Member 
: East I think. 
KRIS FAAFOI 
: Hamilton West. Heaven forbid he gets mixed up with the member for Hamilton East! Tim Macindoe said that there are many measures in this Customs and Excise (Joint Border Management Information Sharing and Other Matters) Bill that are logical and we on this side of the Chamber agree with it. That is why we are supporting this bill. We think that the move to share information between the Ministry of Agriculture and Forestry and the Customs Service is logical. We think it is logical that householders who produce their own biofuels get an exemption from any duty that they have to pay. We think it is good that we give more powers to customs officers at our borders to take action to remove people who are making a nuisance of themselves. We think that is logical.  
We obviously agree that there are a number of measures in this bill that are logical but what we do not agree is logical is that the Government at the moment is taking measures around the resourcing of a number of Government departments to make sure that very few of these measures will be able to be carried out efficiently and effectively. And if we are led to believe that the Government’s moves around the reduction of the Public Service go far beyond just using technology with the sharing of information where are we going to go now with our smartphones when we go through customs? We will just flash our smartphones through a scanner and then we will be going through. We can imagine the kind of trouble and what will happen to our reputation in terms of border security if we do head down that track. So we are very concerned about the illogical move of the Government and although we support these moves that are being debated today in this bill we do not support the Government’s move that will see many of the benefits of this bill not come to fruition.  
We do also welcome the increasing of the penalties that come in under this bill. We understand that it has been around 15 or 20 years since penalties under the two laws that this bill will amend have been looked at and the change of I think the minimum fine going from $50 to $200 is welcome. Also the maximum fine going from $10000 to $50000 is a welcome move too to make sure that those who have been trying to take more advantage of our laws over time are punished sufficiently under this new regime.  
Along with my colleague Trevor Mallard I did put a question to the Minister of Customs earlier on and I am hoping that he might be able to address it. It was around the cost of bringing in this information-sharing technology. It was around $75 million and that was the first price tag to introduce this technology. I think that in these times of austerity from the Government we would like to know an exact figure of what it might cost to bring in this technology at our borders especially when media reports at the time of the introduction of this bill were that the estimates went up to around $200 million. I can see that the officials and the Minister are shaking their heads so that would suggest that that is not necessarily the price tag for the introduction of the technology. But it would be nice to hear from the Minister in the chair exactly what it will cost to bring in this technology.  
Also Mr Mallard referred to the ability of the Minister to make regulations to expand some of the information sharing and what type of information that both the Ministry of Agriculture and Forestry and the Customs Service might be able to share. He made reference to the High Court decision today. We hope that in the future the judgment of the Minister might be a little bit sharper in terms of what he might be able to extend in this bill as to what he decided in the Crafar farm decision that he made along with an Associate Minister of Finance Jonathan Coleman.  
I do not want to be too negative about the bill though because we are supporting it. We do welcome the move from the Government to make sure that we can have more efficient and effective policing of our borders. It is a move that we can progress to because of the increased technology and the increased willingness of Kiwis and those who are coming to our nation to use their own technology to make sure that they can come in and out as freely as they can. So we do support this bill. There are some reservations around the cost which I hope the Minister in the chair may clarify because I think in this day and age when a lot of Kiwis are being told to— 
Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) 
: 
 I am sorry to cut off my colleague Kris Faafoi but I wanted to raise a couple of questions with the Minister of Customs. I am seeking some clarification. 
Firstly it seems to me that in principle I need to say that the purpose of the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill—to improve information sharing between border agencies—is well supported but the devil will be in the detail and the implementation. So the fact that the bill refers to a review at 5 years and before 6 years is I think a positive thing. It is an important element of ensuring that the operational practice of implementing the intent of this bill has been achieved effectively. 
The questions that I have for the Minister that I am seeking clarification on relate to the level of discretion given to the chief executive. In particular I am looking at clause 22(2) of the bill. In my initial reading of that clause it seems to me that the chief executive is given quite a wide-ranging brief in terms of his or her ability to exercise discretion. On that matter if the Minister were inclined to take a question it would be this: is he comfortable with the level of discretion that the chief executive is able to exercise in relation to this bill and is he convinced that it is a matter that does not require review? It could be the simple fix that as the aspect of information sharing is to be reviewed at 5 years or 6 years the level of discretion exercised by the chief executive could be subject to that review also. 
If the Minister did take the opportunity to respond to that question the other part would be in relation to the setting of penalties and the rates. It is not clear to me whether the calculation of penalties is reasonable. I think it is a fair question. Obviously to say that the penalties have not been addressed over a period of time and need to be looked at—I do not dispute that. My question to the Minister is on what basis he determined that the penalties set were a reasonable amount and something that was justifiable. In reading section 128B in clause 13 and the amount of discretion implicit in it that the chief executive can exercise again my question to the Minister is whether he is comfortable with that. He may well in fact respond by saying that my reading of that section is entirely wrong and I accept that but it implies that again the chief executive has the ability to exercise discretion over the amount of penalty that could be attributed to offences under this particular provision. 
Can I also say in relation to the explanation about agencies other than border agencies having access to the information that is collected on the database that I understand that one of the submissions was given by Auckland International Airport and that it argued that it was important to have access to this information so that it could make some timetabling decisions around staffing at the airport. Although I have some sympathy for that argument my main concern if we are going to deal with the issue of border control is that this is primarily an issue of ensuring that those border agencies that are tasked with ensuring security at the border are the primary utilisers of the information. Although I have some sympathy for the airport’s position I do not think it is the type of agency external to border agencies that should have a huge amount of access to the information that is being collected in this particular database. If I understand the way in which this bill is constructed it is not intended that the airport company or for that matter cruise ship companies or services or duty-free services at cruise ship terminals would have an in-depth detailed amount of information from this system. But it is again worth asking the Minister whether as this matter is being reviewed it is the Minister’s intention that the primary responsibility and objective of the bill is focused on border agencies and not in large part on external agencies. We must be absolutely confident in this House when we pass laws to do with our border that our primary focus is on security at the border. 
So with that in mind I am hopeful that the Minister will take a call on those questions. I have been very specific so as not to waste the time of the Committee. It has been encouraging to see that the Justice and Electoral Committee spent some time going through this bill and making some useful amendments to ensure that it can pass with the support of Labour and other parties in the Committee. I encourage the Minister to take me up on my offer and respond to those questions. They are genuine ones that I consider are useful and may help with clarification—certainly in  
Hansard 
 and in the bill being read as intended by the Minister—to help in the interpretation and utilisation for the successful implementation of this particular bill. 
Hon MAURICE WILLIAMSON (Minister of Customs) 
: 
 I will answer just a couple of the questions that were raised either by the Hon Trevor Mallard or by the Hon Nanaia Mahuta. Yes indeed I am confident that the chief executive’s discretion here is the right level for that to be exercised for these levels of penalty.  
I refer to Trevor Mallard’s concern that “materially incorrect” when filling out some of the forms may even relate to a full stop being in the wrong place. Can I tell the member that under section 128A “Imposition of penalty” in clause 13: “(1) The chief executive may issue a penalty notice to a person if the chief executive is satisfied that—(a) an entry of goods made by the person contains an error or omission;” so the chief executive is allowed to use his discretion. 
SU’A WILLIAM SIO (Labour—Mangere) 
: 
 The Minister of Customs Maurice Williamson is perhaps the only Minister I have known in the past 3 going on 4 years who has consistently brought good news to this House in his portfolio of customs. Unlike my colleague Trevor Mallard I will not be making the allegations he made about why but simply will note that we all generally agree about the importance of protecting our borders and he is now the beneficiary of credit for work that goes back a ways to the time of Minister Rick Barker and to the time of Minister Nanaia Mahuta. I just want to lay that on the table for people to note. 
The Minister will also know that when he first introduced this bill there were some serious concerns despite our general agreement on it. The first point was around the sharing of information and privacy. That still remains the concern for me despite the fact that we now have the Privacy Commissioner being able to review the goings-on in 5 years’ time. I suppose the question that still remains doubtful in my mind is the period from the start to 5 years out. What happens when information is inadvertently shared with those companies or whomever that we do not want to have this information made available to? What systems are in place is my question in terms of how we ensure that that information is safeguarded for the purposes that we seek to have it available for? I would not mind the Minister being able to sort of allay those concerns because I think those were concerns shared by many on the Justice and Electoral Committee which deliberated on this particular issue. 
To expand a little bit on that I will tell you a story about something that took place last month. I had an aunt who passed away in Melbourne just as my younger brother arrived here and used the gateway system. He then had to go back to Melbourne with us. On arriving in Melbourne I was able to use the gateway system. My brother attempted to use the gateway system in Australia but he could not go through. Anyway I went through thinking it would be a matter of minutes before I would see him again. We arrived at 10 o’clock in the morning; I did not see my brother for another 3 going on 4 hours. What had happened was that apparently his passport was not scanned by the gateway system on the other side for whatever reasons. He was told that the machine did not pick up the number from the passport. So for 3 almost 4 hours he was questioned by the authorities there. There was no other information available to them to enable them to determine whether his passport was legitimate. In fact they made the allegation that perhaps it was a forged passport. So the officials there had to call New Zealand.  
The CHAIRPERSON (Eric Roy) 
: You need to come back to the bill.  
SU’A WILLIAM SIO 
: Well the point is in terms of what I said earlier about the sharing of information. This was very important information it was not available to the authorities there and for some reason or other it was considered that the information that the machinery should have had was in limbo and therefore we were detained for 4 hours my brother was alleged to be some sort of bad person and there were questions over whether that passport was legitimate or not. This was not his fault; this was the fault of the system. OK we paid by waiting around for 4 hours or so. The fear expressed by some in the industry and by other officials is what if this information ended up in the wrong hands. I think the example shared by some was that sensitive business information could get into the wrong hands. So that is one issue. 
The other issue that still is a matter of concern is the cost of the system that we are putting in. I think there have been some rough estimates of around $200 million maybe $400 million. Do we now have a correct figure? I would not mind the Minister being able to share that with the rest of us. 
I guess another concern also is that now we have added instant fines added other costs on the importers the fear is that those costs will simply be passed on to the consumers. Is that the reality for us? Do we expect increases in the costs of consumer items as a result of the change in the cost regime? I mean I think most people here in this Committee agree that yes if we are going to create jobs we have got to try to encourage and support business. That is one of the reasons why Labour has always supported reductions in the compliance costs of business but it seems that we are now going the other way by adding what some might say are unnecessary costs on importers with the threat by those importers that those costs will simply be passed on to the consumers. So I would not mind the Minister making some comments around those. 
Generally the rest of the amendments were minor. I do not know whether the Minister has answered Trevor Mallard’s questions about the dog. Did we ever find out what the difference is? The other point that I also make is in terms of secure customs areas and giving officials the power to use reasonable force. Have we determined what “reasonable force” is? The concern there is that officials are only humans. How do we prevent officials who are tired who might be upset from overdoing what may be “reasonable force” on unsuspecting travellers who might through no fault of their own end up in space that is considered to be customs space? I mean I would have thought that to prevent that you would have some clear big signs to ensure that people do not trespass into those particular areas. So those are really the concerns. 
 I was not part of the select committee so I do not know what updates have been made. I am generally asking the Minister whether he would mind sharing whether there are any changes to that. My biggest concern I have with this particular system is whether we are going to lose any jobs at the front line. Will we lose jobs by combining the systems for the collection and sharing of information? That is my contribution to what I do not consider to be very sexy legislation. I would have thought that this time would be better spent debating some of the issues that were raised in the maiden speeches by the Green Party earlier today and by my colleagues late yesterday. Speeches on closing the gap in terms of inequality would have been better than for us to be looking at border control which is an issue that we all agree we need to look after. I will finish off there. I am hopeful that the Minister will take the time to respond to some of the questions that I have raised. Thank you. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I am very happy to take a brief call on the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill. This is one of a number of bills. It seems to have been a bit of a theme for the last week or two that we are dealing with a number of bills that relate to better information-sharing between Government agencies and departments.  
I think that generally speaking that is something to be encouraged although one of the concerns I have had in the House this past week in dealing with a number of bills that relate to this topic is that I have not really got a sense from the Minister of Customs’ contributions that the Government has an overall plan and approach to information sharing. It seems to be being dealt with on very much an ad hoc basis rather than with a wider whole-of-Government approach to better information-sharing which was something that the Prime Minister talked about just a few days ago.  
I think that if we are going to be dealing with this issue of better information-sharing between Government departments—and it is coming up and recurring in a number of different areas—we need to get a sense of what the Government’s overall objective is here. There are a whole range of considerations: there are privacy considerations and there are considerations around whether Government departments should be using information that they have collected for one purpose for another purpose. I think the Parliament as a whole should be considering the wider principles behind these sorts of information-sharing arrangements rather than just dealing with them on an ad hoc one-by-one basis.  
I do have a few questions with regard to the specific bill itself. I was not on the Justice and Electoral Committee but primarily the first point that I want to talk about is around the cost of these measures. I understand that industry sources estimate that it could cost up to $200 million and that some of this cost will be recovered through the use of an import transaction fee which would apply to goods over $400 but may apply to packages valued at less than $400 and I wonder how that will be enforced and how that will be tracked. This is an issue that has been raised with me by people in my own electorate around monetary values of imported goods particularly where they are imported using the postal system and how we actually keep track of that. People can import goods above a threshold by dividing them up into smaller packages and importing them in a series of smaller packages. How is that traced? And will this information sharing that this bill is intending to put in place stop that from happening? There are wider implications from that than simply those of a customs nature.  
There are taxation implications. To give an example I have got a model crafts and hobbies retailer in my electorate who imports models—model aeroplanes for example—which the retailer is taxed on. Yet if somebody goes online and buys parts of these models one bit at a time and imports them they may get them all arriving at the same time but if they get them all in different packages they avoid paying tax. So the retailer who provides the comprehensive service and imports the whole lot all at once gets taxed on it whereas somebody who uses online technology to import it—[ 
Interruption 
] I am getting to the point—does not. My question is: will the information sharing that is proposed in this bill have any impact on that? As I say the implications are much wider than merely what would seem to be suggested by this bill. The import transaction fee that I referred to I understand will apply to items such as jewellery clothing and electrical appliances so potentially would it apply in the instance that I have just mentioned of somebody importing models and those types of craft items? That is something that it would be useful to get clarification from the Minister on.  
Overall the bill is a good one and I understand from colleagues who have been on the select committee that it was well examined by the select committee. The chairperson of the Justice and Electoral Committee is Chester Borrows and this is the first opportunity I have had to congratulate him in the Chamber on his elevation—a well-deserved promotion and long overdue in fact. It would be fair to say that in the short time that I have been in the House Chester Borrows is probably the best select committee chairperson that I have encountered notwithstanding the excellent chairmanship of David Parker of the Government Administration Committee— 
Charles Chauvel 
: How did you find your experience on Regulations Review? 
CHRIS HIPKINS 
: Oh and the Regulations Review Committee as well. It is very easy to forget. 
MICHAEL WOODHOUSE (Senior Whip—National) 
: 
 I move  
That the question be now put 
. 
The CHAIRPERSON (Eric Roy) 
: The question is— 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Chairperson. This has been taken as one question by leave rather than in three parts. The understanding when that happens is that if there is ever going to be leave for it again we are not going to be cut off by a closure motion. 
The CHAIRPERSON (Eric Roy) 
: I have listened to the member. That is not a point of order. If the member disagrees with the closure he should vote against it. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Chairperson. I would like to invite the senior Government whip to withdraw that motion in the interests of getting leave in the future to take parts together. 
The CHAIRPERSON (Eric Roy) 
: The member can make that request. It is not a point of order and that is the sort of discussion that should not be made as a point of order but in direct dialogue with the member concerned. 
A party vote was called for on the question  
That the question be now put. 
Ayes 63 
New Zealand National 59; Maori Party 2; ACT New Zealand 1; United Future 1. 
Noes 53 
New Zealand Labour 34; Green Party 11; New Zealand First 8. 
Motion agreed to. 
The CHAIRPERSON (Eric Roy) 
: The question is that clauses 1 and 2 Parts 1 and 2 and schedules 1 and 2 stand part. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Chairperson. I would like those put separately. 
The CHAIRPERSON (Eric Roy) 
: Well the member will have to seek leave if that is what the member wants. 
Hon TREVOR MALLARD 
: We do actually have some separate questions. We have an agreement to a debate. We do not have an agreement to have them put together. 
The CHAIRPERSON (Eric Roy) 
: No I put leave at the start that the debates be taken as one and the questions as one. On the previous bill that was held in Committee leave was sought to separate the questions. Unless there is leave put and agreed to— 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I seek leave to have the questions taken separately. 
The CHAIRPERSON (Eric Roy) 
: Leave is sought to have the questions taken separately. Is there anyone opposed to that course of action? Leave is opposed.  
A party vote was called for on the question  
That clauses 1 and 2 Parts 1 and 2 and schedules 1 and 2 be agreed to. 
Ayes 115 
New Zealand National 59; New Zealand Labour 33; Green Party 11; New Zealand First 8; Maori Party 2; ACT New Zealand 1; United Future 1. 
Noes 1 
Clauses 1 and 2 Parts 1 and 2 and schedules 1 and 2 agreed to. 
The result corrected after originally being announced as Ayes 119 Noes 1. 
Hon MAURICE WILLIAMSON (Minister of Customs) 
: 
 I move that Supplementary Order Paper— 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Chairperson. We have reached the time when you must report. 
The CHAIRPERSON (Eric Roy) 
: No. On a closure motion one completes the voting. I call Maurice Williamson. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Chairperson. I think we have completed the voting on the question that you put to the Committee. This is a separate motion now being moved. 
The CHAIRPERSON (Eric Roy) 
: It has been the convention of this House that all matters dealing with the conclusion of the bill that is being progressed are progressed at that voting. So I will ask the Minister— 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I move  
That the Chairperson obtain the Speaker’s ruling on whether a motion to divide the bill was covered by the closure motion. 
Motion agreed to. 
House resumed. 
Speaker Recalled 
The CHAIRPERSON (Eric Roy) 
: Mr Speaker the Committee has voted that you be recalled to determine whether or not the ruling that I made was in fact the correct one. The Committee was debating the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill. I put a closure motion to the Committee on the debate. The closure motion was accepted. The vote on the clauses the parts and the schedules was agreed to. I then proceeded to call the Minister to put the motion to divide the bill and the question was raised whether or not that was covered in the closure motion. I ruled that it was. There was a question about that and you have been asked to determine whether in fact that is the case. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I think the Chairman has summarised it absolutely clearly. It is a very simple question and that is when a closure motion has been called for and passed on the preliminary clauses and the parts of the bill—voted on; that has been completed—obviously the Committee moves immediately as its next item to the Minister moving a motion. We had at that stage passed the time for the reporting and therefore it is my submission that that is a motion for the next sitting day. 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Thank you. I am going to seek some advice on this. My understanding is that it has been agreed by leave that the bill be taken as one question. With that in mind when the vote starts it is also to be— 
Hon Trevor Mallard 
: Can I interrupt? 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: The Hon Trevor Mallard. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 Sorry the Chairman made it absolutely clear to the Committee that what had been agreed was that the parts and the preliminary clauses would be taken as one question and the votes on those would be taken as one question. He stated that clearly to the Committee as part of an earlier discussion. He did not include in his summary any further motion by the Minister. I also want to make it absolutely clear that in the motion for leave that the Committee agreed to the Minister’s motion which could have been included in that leave and probably would have been accepted was not included in what the Committee agreed to. 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: I thank the member. I will just reiterate what I said to start with and that was that it was agreed by leave that all parts and clauses would be taken as one question—we agreed on that—and the vote was put on that. The question that arises is when the Minister then had to divide the bill. At that stage if I am hearing what you are saying you think that is outside the ambit of the original intention—that is as you see it. Well the convention has always been that when you have a bill that needs to be divided it immediately follows the vote—it immediately follows the vote. That was as I understand it from the Chairperson exactly what happened. So if we were to take this in sequence the vote was put the Minister immediately then came forward and moved the motion about dividing the bill and that is the proper thing to do as that is the sequence it follows. The question that then arises however is once that is done it actually could be regarded as a debatable motion and I think that is the area with a question mark at this stage. I am just going to seek some further advice.  
The convention is and I will just reiterate the point that I have made that immediately following the vote where a dividing of the bill were to follow it is a debatable motion as I mentioned earlier on. Although that has been a convention by concluding the debate now it actually stops members from participating in a further debate. So my ruling is that we have to move back into Committee and the Chairperson must report progress. 
In Committee 
Debate resumed. 
House resumed. 
The Chairperson reported the Taxation (International Investment and Remedial Matters) Bill with amendment and progress on the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill. 
Report adopted.