Border Security Bill

It is with some regret that I rise to speak in opposition to Part 1 of the Border Security Bill tonight, on behalf of the National Party. This bill went through the Government Administration Committee and I acknowledge the fine work that was done in that committee. I also acknowledge the fine work done by the officials in advising the Minister on the need for some changes to the way we carry out our border security, particularly in relation to events around the terrorist attacks of 9/11 in the USA.

Unfortunately—and I say “unfortunately” because it is unfortunate—the Minister decided to take this opportunity to slip in, without consultation with industry, at the eleventh hour in the process, a backdoor tax, which was an original proposal of about $20 million of extra tax at a time when this Government is experiencing record surpluses. Subsequently, the Minister, under extreme pressure from not only the Opposition members of Parliament—in particular, in response to this legislation—but also from industry, has made a minor adjustment now and decided to back down by $4 million on that cost for exporters. In doing so, of course, he is admitting that he got it wrong in the first place and is actually agreeing with the advice that was given to him, which was that the figure was an arbitrary figure, that there was no basis for that figure, and that proper costing had not been done to figure out what it would cost to implement some of those measures. So now the Minister has announced—and he is hoping that industry will support him, which, of course, it will not—that he is backing down on $4 million on the export part of the cost.

In clauses 7B and 8C the Government is proposing to introduce those costs. We will strongly oppose those back-door costs right through this process. I give the Government warning now, and I expect some members on the other side of the Committee to take a call and explain to the industry—the exporters and importers, and those in between who are in shipping—why it felt the need at this point, with these huge surpluses, to dump this cost on them. Why did the Government feel the need for that?

What the Government also needs to explain about Part 1 is how this is in keeping with the statement made by the Prime Minister, and many other Ministers at various times, that this Government is pro-growth. How this measure ties in with that statement is beyond me—I admit to that. It would be very, very interesting to those listening tonight, and also to members on this side of the Chamber, to hear a member on the Government benches stand up and tell members how dumping $16 million or more of tax on to exporters, importers, and shipping companies is consistent with the statement in the Speech from the Throne about putting more growth into the economy of New Zealand. What this Government fails to understand—and has failed to understand ever since it has been in power—is that it is our exporters, importers, and those who are involved in business in New Zealand who actually drive the economy. That is the bit the Government has not been able to understand. It is something that it fails to comprehend, and there is no surprise in that, if one understands where those members come from. Not one of them has been an exporter, an importer, or a person who has been in business.

💬 Hon David Carter: All union delegates.

They are all union delegates. They are all people who have always been price receivers rather than price generators, as it were. They have always been out on the end of some pay chain, rather than generating the wealth that pays the salaries. So we end up in Parliament tonight debating the Border Security Bill, which effectively is a further tax—and a back-door, sneaky tax at that—with no consultation. It is an abuse of the select committee process and an abuse of industry.

💬 Lindsay Tisch: Who was the Minister?

Well, there has been a variety of fingerprints all over this one, but the Minister is Rick Barker. I invite Mr Barker to take a call.

💬 Hon David Carter: Will he take a call?

I am sure he will. I am positive he will, because he is passionate about this. I am sure he will take a call to explain why it is that tonight in the Committee, members are debating this back-door tax.

I am encouraged by my colleague Shane Ardern’s speech. I am encouraged that the National Party is taking this issue seriously, because this bill is little more than a con trick. This is a con trick on exporters, importers, and the New Zealand people. Border security is a cost that should be borne by us all. It is a very important issue, and the cost should be paid legitimately out of taxation. It should not be imposed on a segment of our country—namely, importers, exporters, and trans-shipment.

💬 Jill Pettis: They are making it, we are paying.

I do not think the member has read the bill. She should read what her Government is putting out on this. I will explain to the member just what is happening. There will be an additional cost of $20 million to upgrade the border security systems. The suggestion is that exporters pay $8 million, importers pay $4 million, and trans-shipment—whoever they are—also pay. Nobody knows at this point whether they are the cargo owners, the cargo people bringing it in and transhipping it on, or the carrier; that has yet to be defined. That comes to $20 million. What the Government has done is con Rod Donald, because the Greens do not know, and they have not—

💬 Hon David Carter: They haven’t conned the Greens; they have conned New Zealand First.

Will the member put his brain into gear, and then something sensible will come out of his mouth from time to time.

💬 Brent Catchpole: A load of irrelevance again.

Yes. The Greens did not know the breakdown of the cost. I asked Ian Ewen-Street today, and he told me it was fifty-fifty. It is not, but it is fifty-fifty on the exporters alone. Importers will bear the cost of $4 million, and trans-shipment people will bear the full cost of $8 million—that is, if the Government identifies the carriers as the importer, exporter, or the person who carries it in and takes it out again. But for exporters the Government is prepared to give $4 million : $4 million. That is 80 percent : 20 percent. That is unfair in this day and age.

I think Mr Ewen-Street agrees with me, and I see him nodding. But I guess he will be whipped—or mustered—into line to go along with this unfair legislation. I put up a Supplementary Order Paper, which I trust the sensible members of the National Party, including Mr Shane Ardern, will read, and give us their support. I think he should put a bag over his colleague’s head to keep him quiet for a little bit longer.

💬 Hon David Carter: Not a voluntary euthanasia bag!

But not a voluntary euthanasia bag, Mr Ardern—I do not want him to take it too far. I think there will be several calls tonight on this issue, and I hope the National Party takes the time to read the Supplementary Order Paper and give it support. Similarly, I hope the ACT party will also take the time to do so. I think Mr Eckhoff is already studying the Supplementary Order Paper and giving us support, and I hope United Future will take note of this Supplementary Order Paper and give us its support. There is no hope for the Greens. They have been lost in a wash of mystery.

I must say this Government made a commitment in its manifesto some years ago that border security costs would be a legitimate cost to the taxpayer, but Dr Cullen has so much money in his coffers that he does not want to part with it. He has what one would call the Scrooge mentality—when one has a lot, one wants more. Are members aware of that sort of mentality? Dr Cullen should be looking into the importance of this bill to the country, and putting his hand in the pocket and pulling out the $20 million to put into this bill, whereupon it would go through the House with unanimous support, I suspect. If the duties described in this bill were funded correctly—by the taxpayer—then the bill would go through unanimously. I suggest members would be spending only 10 minutes on this bill, because its substance makes sense. We all know we want border security and that it has to be upgraded, but we strongly object to the cost being put on to exporters.

💬 Jill Pettis: But we’re putting in $4 million.

The member has woken up.

That is a speech that I will recall for quite some time. But if the member was serious about opposing this legislation, then he should have done a deal more when he and his leader sold out to the Government to support the foreshore and seabed legislation. However, the point I want to make is that the important part of this bill is the question of whether border security is fundamentally the responsibility of the taxpayer or whether it is something that can be cost-recovered. I say that border control is a fundamental function of Government that should be paid for by Government by taxes, and I am sure, Mr Chairman, that you would agree with that.

During the debate, this bill will be bogged down by an argument over two clauses—clauses 7B and 8C—that propose to give the Government the right to collect more taxes from the importers and exporters of this country. I say to the Minister in the chair, the Hon David Benson-Pope, that the importers and exporters of this country are heartily sick of being passed a raft of tax after tax that seriously threatens the very competitive nature of New Zealand. The Minister can laugh at that, but I suggest he gets out there, opens his correspondence file, and he will find a raft of letters from organisations like Federated Farmers. He shakes his head, but I have a copy of a letter that is addressed to him from Federated Farmers, which was also copied to me, that strongly opposes this legislation for the very reason that I am talking about, which is that it imposes more cost on a very valuable sector.

Although we are concentrating on those two clauses, in amongst this legislation there is quite a lot that is good. I am all for giving more power at the border to our Customs Service officials, because with the smart practice of some of those people involved in the illicit trade, they need it. I say to the Minister that if he wants wholehearted support for this legislation, he should accept Lindsay Tisch’s amendment—which will be moved at the end of the discussion on Part 1—to omit new clauses 7B and 8C. As Mr Peter Brown said, without those two clauses in the legislation we can move on in, I suspect, a unanimous fashion, and pass the Border Security Bill to the betterment of the enforcement of our borders. The issue that we have strong objection to tonight is the imposition of yet another tax. There is no other description for it. It is another tax on the—

💬 Jill Pettis: That member’s Government did nothing.

Now Jill Pettis interrupts and says: “That member’s Government did nothing.” “That member’s Government” did a huge amount to ensure the success of our export sector, because it recognised the contribution that those people made to the creation of wealth in New Zealand. It gave that member the opportunity to be in Government and pass something like 26 new taxes prior to this one. No. 27 tax is about to be imposed with the passing of this legislation. I say to Jill Pettis that her Government certainly does not have a record she should be proud of.

The legislation could be moved quickly if the Government were prepared to acknowledge that border control is a public good to be paid for and funded from taxes. That is the issue. The Minister has already done a semi-backdown. We have had all sorts of back-downs over the last few days—one over the sex move by Mr Phil Goff—and the Minister has done a back-down of $4 million. He now acknowledges that $4 million will not be collected from exporters and importers, and will be paid out of general taxes.

I ask the Minister about the other $16 million that he is intent on putting on the exporters and importers of this nation. [Interruption] He is mumbling something. If he will take a call, I am quite happy for the Minister to answer and justify how, first of all, he could come up with a cost recovery regime of $20 million, and then, because he received lots of letters that he seems to have forgotten he received—but I know he received them—suddenly back down and change his mind on $4 million of the $20 million. There is no rationale for that at all, apart from as an acknowledgment that he was not right, and that he was unprincipled with his first imposition of yet another significant tax on the export sector.

I am pleased to take a brief call. I speak rather more in sorrow than in anger, but I think it is important to set the record straight, given some of the extraordinary statements that have been made by preceding speakers. It always surprises me that those advocates of the free market turn to the State to pay their bills when they do not like to take responsibility themselves.

💬 Peter Brown: Oh, come on!

I say to Mr Brown, if he would take the trouble to listen to what I am saying—and I am happy to provide him with the other material I have here—that according to what he said earlier, the New Zealand First position has clearly changed. We all know that this matter has arisen out of the events of 9/11, and that in order to access international markets, particularly the US market, there are some new issues around border security. The Government acknowledges that there are a number of issues of public good about the clearance of exports at border security, but clearly there is also considerable private advantage for individual exporters. If individual exporters wish to be supported by a Government that is going to great lengths to facilitate their entry into no-delay processes in the so-called “green lane” on arrival in the US, then they should be very happy to pay those costs.

Just to set the record straight, I remind members that the Government will continue to invest in the cost of export clearance. It already meets approximately $2 million of that cost. The Government has already met the capital cost of $22 million for the X-ray machines that are now required, and the taxpayer has also met the set-up costs of $9 million this financial year.

💬 Shane Ardern: Show us how that has been established.

Mr Ardern seems to be interested in the taxpayer, but he is asking the taxpayer to pay for the private advantage of some of his exporter friends—not of everyone, but just of the rather blinkered, gumboot-wearing sector that he purports to represent. The Government has also agreed to provide an additional $8 million over the next 2 years to assist exporters to meet the new requirements.

The key factor in this issue is that, overall, the Government will meet 60 percent of the total export clearance costs over the next 2 years. My colleague Mr Barker has already made it quite clear that an ongoing review of all the border control and export clearance charges is flagged. I think that that is a demonstration of more than considerable goodwill towards our exporting community, and of a clear intent to come to a good compromise. Frankly, I am disappointed—given the urgency and importance of this matter—that we had two rather bigoted speakers from the National Party who are not prepared to see their sector, and their sector interest groups, pay their way.

It was with some incredulity that I have just listened to what I can only describe as a vitriolic diatribe from a Minister who is totally out of his depth. He is the Minister of Fisheries, for goodness sake, and he was totally out of his depth. He does not even understand the basics of border security clearance. The Minister said that the State would pay the bills of exporters, and he talked about Government support, and so on. I have news for the Minister: the State, or the Government, creates nothing. All that this Government does is to take from other people. It takes from taxpayers. The Minister and this Government create absolutely nothing. [Interruption] He is mentioning something to the Chairman.

This Border Security Bill is one that every member in the Chamber would like to support. There would not be one member who does not think that, for New Zealand, border security is probably No. 1. New Zealand is a major exporting country—the No. 1 exporting country in the world, as far as I am concerned. The Minister does not seem to understand that we do not survive if we do not export. We will not survive without exporting. Mr Peter Brown talked about the importance of shipping to this country, not to mention all the other forms of transport. Border security is crucial. I know that the previous speakers from the National Party, Mr Ardern and Mr Carter, and from New Zealand First support that concept, but for its own electoral purpose the Government has said it will build its surplus as big as it possibly can, then distribute those funds at election time so that it can benefit, and whack the exporters yet again.

There is a fundamental principle that I, as an ACT member of Parliament, would not break. If there were a private good associated entirely with the exporting of my product—which, as a farmer, is meat and wool, etc.—I would accept that. But significant work has been done by Capital Economics. A very respected economist by the name of Bryce Wilkinson has done an in-depth study on this issue, and he came to the very clear conclusion that the exporting industry is right and the Government is wrong, and that export clearance is a public good. I had better tell the Minister in the chair, David Benson-Pope, what a public good is. A public good is one that cannot exclude anyone from benefiting. The public of this country benefit from exporting—it is not just the farmer, the processing company, or the flower exporter who benefits. Everybody benefits, right down the train from those who are in the exporting business. A private benefit, of course, is one that can exclude people from benefiting. How does, for example, the meat industry exclude the freezing worker from benefiting from exporting? It cannot. It pays good wages, and it is a thriving, vibrant industry. That is a very simple illustration of why export clearance is not a private good. It is very much a public good, and that is what the argument from the Travel and Trade Industry Coalition is all about.

The Federated Farmers submission to the Government has obviously been totally ignored, but I want to read out a few words from it. Federated Farmers state that they are concerned that the bill is “based on poor process and lacks sound principles.” Well, is that not the truth? The Minister in the chair can pretend to be busying himself there. It is a pity he is not listening to those words from an important grouping of people in this country, who state that this bill lacks sound principle and is based on poor process. There are no sensible checks and balances being introduced in order to ensure that the powers exercised by the New Zealand Customs Service are reasonable and that any cost recovery must be met on the principles of equity, efficiency, transparency, and justifiability. This part fails on all counts.

I want to speak mainly on clause 8C in Part 1. I begin by saying simply that the consultation process legislated for in that clause is very, very deeply flawed. We could debate what the word “consultation” means for a long time. I put it to the Government that it is about to enact legislation to do with industrial relations in this country that insists on good faith from both parties: both employers and employees. The truth is that on this occasion, having decided to charge $20 million to importers, exporters, and trans-shippers, the Government simply went and told them that was what it was going to do. That does not constitute consultation. The fact is that the sector that the Government is obliged, according to this legislation, to consult has told the Government very, very clearly that it does not appreciate simply being told that was what the Government would be doing and those guys would be picking up the tab. It is really a double standard for the Government to insist that fair and even consultation processes occur in one part of the law, but not in another part. The only difference here, I guess, is that it is the Government itself that seems to have broken its own rules. I also say that the so-called concession of the Minister that the consultation should be ongoing until 1 July 2006 is fundamentally unacceptable. The truth is the Government does not even have the assurance that it will be the Government on 1 July 2006, so how can it possibly commit itself to ongoing consultation beyond the term of the next election? That does not make sense, and smacks of a degree of arrogance.

The second thing I want to speak about is the charges on exporters, importers, and trans-shippers. The initial charge proposed for exporters, which was $8 million, has now been reduced to $4 million. I want to add United Future’s voice to those of the other speakers, by saying that the Government should be picking up the whole of the $8 million cost involved here. There should be no fifty-fifty deal, because, quite clearly, all the people of New Zealand benefit from our exports and the revenue generated from them. We are faced with a balance of payments deficit of record proportions, which is steadily growing worse. Just as a household cannot buy goods unless it has an income, so we as a country cannot import goods unless we first export goods and services. At the moment, that imbalance is well astray. It is quite inconsistent for the Government to tell us that there will be some good things for exporters in the Budget on Thursday, but to tell the people of New Zealand tonight that we cannot come up with another $4 million, even though we have had overwhelming evidence from external, independent, highly respected consultants that there is no private good element in this area and that it is for the benefit of New Zealand and our exporters. It is so that we can continue to import the goods we need and all appreciate, as consumers. It is simply unprincipled and mean-spirited of the Government to deny picking up that charge.

A similar, but somewhat different, argument applies with regard to the $4 million to be levelled on importers. The first and core requirement of any Government is the protection of the realm. Why are we putting in place this regime for imports? The Minister in the chair, David Benson-Pope, himself just conceded that it flows from September 11. We are doing this to protect the citizens of New Zealand against the possibility that in one of our import containers, at some stage, there will be weapons, chemicals, and so on that could be of harm to the citizens of this country. The defence of the realm principle is almost as old as our democracy. It would be as old as democracy in New Zealand—150 years. We have always said that one of the first responsibilities of a Government is to protect the citizens of its country. That is all that we are doing here, and quite clearly, the Government should pick up that cost, not lumber importers with it. That is simply a dereliction of duty and a breach of that fundamental principle.

United Future could possibly have lived with the $8 million levy on trans-shippers, because, to be consistent, neither my defence of the realm nor my trade assistance argument really apply to that.

I want to take issue with the Minister in the chair, David Benson-Pope, who asked why we would be mucking around with this bill tonight when it was so urgent that it be passed. I want to lay out some facts for the Minister. Page 39 of the commentary to the bill states that this bill was “referred to the committee on 1 July 2003.” If it is so important that this bill be passed, why has it taken nearly 11 months for us to get to the Committee stage and be debating it part by part now? If this debate had been urgent, I am sure the Government would have wanted to expedite it and we would have had it back at the end of last year, not half-way through this year.

Another point that has already come up in the debate tonight is the cost-recovery provision. In the original bill, I say to the Minister, there was no provision for cost-recovery. This provision is an afterthought. Why are exporters and importers so uptight about this bill? It is because they never had an opportunity, when they first made submissions to the select committee—and I am a member of that committee and heard all the submissions—to make comments on the cost recovery provision in their submissions on the original bill. Clauses 7B and 8C were not part of this bill.

What did the select committee have to do? Before the bill was reported back in the form that we are debating, the select committee had to give extra time—only because we said it had to, and Shane Ardern and I were there to ensure that there was some accountability—for those other submitters to come forward to submit on clauses 7B and 8C. Do members know how much time was allowed? There were 2 hours of extra submission time divided between about 20 submitters, who are the backbone of the New Zealand economy.

Those submitters were the big firms—the people who make things tick here, the wealth creators of New Zealand. How much extra time did they get to talk specifically about clauses 7B and 8C? They got 2 hours. If this Government says that this bill is so important, why did they not get that right from the word go? There was no provision in the original bill to have a cost-recovery regime. One wonders why the exporters—the wealth creators of New Zealand—get upset with the Government. They get upset with it because it is sneaky. The Government brings through the back door these sorts of taxes that hit the productive sector of New Zealand. This is a Government that prides itself on growth. This is another tax. The reason National is not supporting it is that it is a back-door attempt to increase taxes and compliance costs for businesses. When this Government says that this bill is urgent and we should be passing it without any hesitation, I want it to think again.

National would have supported this legislation. In fact, we said that in the minority report. National is the only party that has a comment in the report about the points that we believe are important. National states that it supports the principles of the legislation but is not prepared—[Interruption] That would be right. What we are not prepared to support is the back-door attempt to increase costs to exporters and importers in New Zealand.

It is important that we reiterate—and it has been mentioned before—what this legislation will cost the productive sector. Originally, it was about $20 million—$8 million for trans-shipped costs, $8 million for exports, and $4 million for imports. The Government has been very generous, has it not, in the last week! It said that it would give a 20 percent discount. That means for exports it will go down to $4 million. I do not care whether the tax is $1 or $50 million; it is wrong. When we look at reports around the world and the responsibility of a Government, first and foremost it is to protect its citizens. That is the role of any Government. This is a public good and not a private good. This tax is solely a public good. It is for the benefit of New Zealanders. It has been forced on us by the events around the world, by what happened in the United States on 11 September 2001.

I agree with Lindsay Tisch to the extent that the consultation process on this legislation was appalling. It went through the select committee once without any hint of cost recovery, and then when the Government realised that the legislation had no support for introducing cost recovery, it had to go back to the select committee. That was a bad process. However, to give the Minister some credit, he did consult.

The process I personally have been through in coming to terms with what this legislation is about has been quite illuminating, for me anyway. On the one hand the Government is saying that this is an industry good; that if the Border Security Bill goes through, it will have the effect of facilitating trade, particularly into the US. Goods being exported to the United States will go through what the Minister calls the “green lane” and with the minimum of fuss. The Government is guaranteeing that those goods will get fair treatment, the Americans will guarantee the contents of the container, and the manifest will reflect what is actually inside the container. That is one side of the argument.

I have to say that the other side of the argument is also persuasive—that is, this is a public good. Why should exporters have to pay for something that is a public good? That is what it came down to. It came down to a debate between the Government saying that this is a private good and that the industry should pay for it 100 percent, and the industry saying that this is a public good. However, this is where the argument falls down for exporters. Take the bill away. Let us say that there is no green lane. Let us say that exporters do not have to pay for a guaranteed manifest and contents of the container. When goods arrive in the United States they have to go through the red lane. That is a choice exporters make. My understanding of the situation is that if exporters choose the red lane, and they pay for the container to be taken off the ship, the goods to be inspected on the wharf, repacked, and then taken out again somewhere else, the costs will be much greater for them than they would be under the terms of this legislation.

I was very pleased that the Government told exporters that it would go fifty-fifty over the next 2 years and then have a review at the end of that time. The Government should be applauded for listening, and saying that this is a trade-off, that the issue is not black and white, and there is a grey area in the middle somewhere. I think that what the Government has come up with is not unreasonable at all.

This legislation is the result of 9/11. The world, as we knew it, changed forever on that day, and as a result terrorism has taken hold around the world and we have had to look to alternatives for trans-shipping our product to and from our markets. The fear of an attack with the carriage of some of our goods to or from our markets is great. Therefore, New Zealand First supports the bulk and intent of this legislation. However, a major problem is that this Government is set to tax exporters. Exporters are our lifeblood. If this country does not export, it does not have an income. If it does not have an income, then the economy will shrink to next to nothing. Would this legislation benefit just the exporters? No, it would not benefit just the exporters, as the Minister Mr Benson-Pope would have us believe. It would benefit all of us.

There are two reasons why it would benefit all of us—first, the economy, and secondly, our security. If the Government were to dump all the costing, the 100 percent recovery, on to exporters, importers, and trans-shippers, as it originally had in mind, that would have said to the country that it did not give a damn about the economy of this country. It finally relented and reduced the cost. Exporters were willing to pay some of the cost, but not the 80:20, as the Government has them set to do now.

The Minister gave us an example of the huge set-up costs the Government had to go through. He failed to take note or even acknowledge the huge set-up cost for exporters. They have a huge cost. They have to comply with all sorts of electronic upgrades. Their computer systems and software have to be upgraded, so they have to put up with a lot of extra costs as well. The Minister’s argument of just the Government having to bear costs is ludicrous. It is a clear example that he just does not give a damn about our exporters. All he wants to do is recover costs and make them pay, because he considers it to be big business.

💬 Shane Ardern: Just another tax.

It is just another tax and another means of filling the pot. My colleague Peter Brown said the Government is like Scrooge—when it has a lot of money left over, it wants more. This legislation is another means to recover those costs and to add to that pot.

The potential protection of our citizens is paramount, and the responsibility of a Government is to protect its citizens. We have heard time and time again around this House that our citizens are of paramount importance. Basically, for the Government to load the cost on to importers and exporters is to ignore its responsibility to citizens as a whole. Therefore, the citizens should help with those costs, because it is for their protection as well as for our goods and exports. The so-called “green lane” is wonderful. It is a great idea. But let us not load the cost all on to exporters and importers. If that happens, our economy will shrivel on the vine, and basically, so will the people in this country.

I also want to take issue with some of the comments the Minister made. The Minister made comments like this: “You’re only protecting your gumboot mates. You’re only protecting the farmers. You’re only protecting those out there who produce the wealth of the country.” I want to remind that Minister of something. I have right here in my pocket a couple of interesting documents. One of them was put together by the Labour Party in 1999 when it was campaigning. The first document states: “Create jobs through promoting New Zealand industries and better support for exporters and small business.” That was a No. 1 pledge on the 1999 pledge card. A bit further down it states that there will be no rise in taxes.

I then fast forward to 2002 and see the next pledge card, headed: “The next steps”. It states: “Work with all sectors to create an innovative, growing economy with more jobs.” That was pledge No. 1. At the bottom of the card it states that there will be no more taxes. What are we debating here tonight? Here is a question for the Minister, and I hope he takes a call. I do represent the gumboot brigade—those out there wearing leather boots; the working people who make this economy work, not these shiny bums down here in Wellington; not this group over here who pander to the unions, cannot understand where the wealth of this economy comes from, and have no idea what they put on their pledge cards or what it means.

Here are two questions for that Minister: when is a tax not a tax, and when is security not security? Is this a security cost—yes or no? Those questions are simple to answer with either a “Yes” or a “No”. I know that Minister does not understand those answers.

💬 Hon David Carter: Ask the Chairman.

I am sure the Chairman understands, but the Minister there has no idea what I am talking about. When is a security cost not a security cost? When in the past have security costs not been paid by the taxpayer of New Zealand? Where is an example of that? In the history of New Zealand, when have all security costs relating to customs been paid for 70 percent by the exporters and importers as is proposed in this legislation? When has that ever happened? Can the Minister show me a jurisdiction in the world where that is the case?

I am sure the Minister will take call. I am sure he has the answers to all of these questions. I know that the Hon Rick Barker has the answers, and I am sure he will be here and will take a call. Tonight we are in a vacuum, because these are the questions that people out there are asking, and these are the questions that exporters and importers—the very people that this Government referred to in its pledge cards—want answered. I am sure there will be a big silence, because there are no answers.

That is why the National Party opposes this ridiculous back-door tax. That is why we are strongly opposing clauses 7B and 8C tonight. That is why we will put forward an amendment to those clauses, and that is why we want this Government to stand up and tell us tonight why it is that it felt it was necessary to do that at a time when this Government is going to collect $44.9 billion in the 9 months to March this year from taxes and levies, at a time when this Government has got a huge surplus, and at a time when in the Budget on Thursday it will be handing out lollies like Father Christmas. Why does the Government feel the need to dump this $16 million—down from $20 million—on our exporters, importers, and those in between, which we have not quite been able to understand?

💬 Hon Damien O'Connor: Does the member want a subsidy?

The honourable member from the West Coast—the only one in this Chamber who I thought understood exporting, importing, and the farming sector—asks whether we are asking for a subsidy. Obviously, he did not hear what I said earlier on. When is a tax not a tax, and when are security costs not paid for by the State? I look forward to the member taking a call to explain that to the good citizens of the West Coast, who are totally dependent on exports. I want to know from the member for West Coast - Tasman whether he will stand up and represent those exporters who sent him here. Will he support those farming sectors? Will he support the gumboot sector that his honourable colleague over here hates so much, or will he sit over there and carp on, not take a call and tell us tonight why it is that he feels the need to dump $16 million on our exporters?

I move, That the question be now put.

I raise a point of order, Mr Chairperson. I note that the Government is moving closure motions. If this legislation is as important as the Minister said it was, and if we look at what Part 1 is about, we can see there are 64 pages. A number of members on this side of the Chamber are seeking a call. I ask you, Mr Chairman, that before you accept a closure motion you take into account that Part 1 is the biggest part of this bill, far bigger than Part 2, and, of course, far bigger than the title debate, and that you give due consideration to the number of speakers on this side of the Chamber who are seeking the call on this very important legislation.

I would like to note that a member of this side of the Chamber is also seeking a call.

The CHAIRPERSON (Hon Clem Simich): That had not escaped me.

I raise a point of order, Mr Chairperson. Just as a point of clarification, will you confirm that new Part 3A is embraced in this Part 1, or is it separate?

The CHAIRPERSON (Hon Clem Simich): It is clear from the bill that it is in this part. New Part 3A is part of clause 8 in Part 1.

I am making the point that this is a complicated bill with a brand new part being put in and you are taking only a relatively few number of calls.

The CHAIRPERSON (Hon Clem Simich): The only effect several members have had is in delaying further debate on this part.

I thank the Minister for acknowledging that National Party members are here representing the gumboot-wearing farmers of this country. I also think that the Committee should note the interjection made by Damien O’Connor tonight who, I think, is still the Associate Minister of Agriculture and who claims that this argument being advanced by National is effectively a subsidy to be paid to farmers.

💬 Hon Damien O'Connor: The member has never worn gumboots in his life.

If the Minister wants to take a call he can take one. He claims that if this cost recovery measure—this extra tax that he is now going to label as a subsidy to farmers—

💬 Hon Damien O'Connor: No.

He is now backing down from that. He is the Minister who only 12 months ago was so keen to impose more taxes on the farming community, but he was cowering in his office when 2,000 farmers stood on the steps of Parliament arguing against a tax the Government was going to impose on flatulence. Only 12 months ago Damien O’Connor, the farmers’ representative here in Parliament, was trying to justify the flatulence tax. He now does about as good a job as that in defending the Government’s new move to impose further taxes on the farmers of New Zealand in this bill.

I want to make two points. The first point relates to the contribution of the Greens. I well remember when cost recovery was first advised by the Government. The Green member Ian Ewen-Street put out a press release opposing the imposition of cost recovery on the import and export sector of this country. Therefore, I found it incredibly strange to listen to his contribution about 15 minutes ago and find that he is now actually supportive of the imposition of this tax on the farmers of New Zealand.

💬 Ian Ewen-Street: He is not.

He now says that he is not, so we are not sure just where the position is with the Greens. If he were now not supportive of an additional tax being imposed on the farmers of New Zealand, then it would seem that suddenly the Government does not have the numbers to pass the Border Security Bill. It is very important that the Green member be allowed to stand to clarify his position because he has had three positions in the time he has walked the length of the Chamber, and I am no longer sure whether he supports the legislation. I suspect that at the end of the day he will roll with the Government, as the Greens are inclined to do.

The second thing I want to do is to talk about an amendment being moved by Peter Brown of New Zealand First. He has asked whether we would be prepared to support his amendment. I would have huge difficulty supporting it. Mr Brown stood and opposed this legislation because it imposed taxes on the import and export sectors. Yet he is moving a very verbose amendment—it is four pages—that talks about clarifying the principles for cost recovery. I say to the member Mr Peter Brown that rather than passing that amendment, which seems to me to be a very halfway-house measure, he would do far better to support the excellent amendment in the name of Lindsay Tisch, which simply states, in a fraction of a page, that clause 7B and clause 8C be deleted.

💬 Peter Brown: We’ll support that.

The member is saying he will support that. I am sure that if Mr Ian Ewen-Street were to clarify his position—he is on the phone, just checking what his position is, so when he gets off the phone he might be able to clarify his position—we may well be in a situation where the debate can be curtailed. I think we might be in a position where everybody is prepared to move this legislation, the good parts of which assist the Customs Service at the border—we are all for that—and the bad part of which removes the cost recovery levy, which is nothing more than a further tax. It is No. 27 of the new taxes that have been imposed. Ian Ewen-Street is now off the phone, so I am sure he has clarified his position. We hope he will take the next call and confirm now that he has clarified with his whips and that they are opposed to tax No. 27. No, I am not sure that he has worked it out yet, but he will take a call and let us know.

Let us hope we are in a position of support for the excellent amendment put forward by Lindsay Tisch to advance the legislation and to complete the debate on the Border Security Bill, without cost recovery, for the benefit of all importers and exporters of this nation.

In talking to clause 8C, there are just a few other points I would like to make. First of all, I would like to make it very clear that United Future believes that the system the Minister has put in place in terms of border security in these matters is a very, very good system. I think it is actually a world-class system. I want to make it clear that we have no problem whatever with the actions the Government is taking in that regard. Our sole problem is with the fact that importers and exporters are to be lumbered unfairly, in an unprincipled way, with the costs arising from that.

I make the point that the passage of this bill tonight does not in and of itself impose those charges on exporters and importers. What the clause does is give the Governor-General, on the recommendation of the Minister, the authority to make regulations in respect of charges, fees, etc. Therefore, the passage of this bill tonight does not necessarily mean that those costs have to be imposed; they are imposed only if the Government decides to do so. At this point in time, as far as we know, that is what it intends to do—impose another $4 million on exporters and $4 million on importers. That is what we oppose. As far as the $4 million cost on importers is concerned, this bill is kind of irrelevant, as that is being done under existing regulations. So even at this late time I continue to appeal to the Government to reconsider this matter, do the common-sense thing, and absorb those costs.

I want to mention the arguments put forward by Ian Ewen-Street in terms of the rationale for the Greens’ decision to support this $16 million charge on importers, exporters, and trans-shippers. The argument seems to amount to this: the Government could chose to do nothing about the border security of New Zealand, and a consequence of that would be that exporters would have to use the red lane in Los Angeles and pay, I think, US$350 per container. But I say that that premise is fundamentally flawed because that is simply not an option for any responsible Government. As has been pointed out already by several speakers, all of this flows from September 11, when the world changed. We have to have proper border security. We have to have proper supply chain security for our exporters. So, really, it is a ridiculous non sequitur to argue that we can just do nothing, and in that case the exporters will have to pay. That is true in itself, but it is an unacceptable position for any Government to say it will abandon its exporters to the mercy of whatever the United States intends to do on this matter. That is simply not good enough.

The central argument here is whether this Government is prepared to give all assistance possible to the exporters of this nation. That is the real substance of this argument. It is United Future’s view that the Government on this occasion has got it wrong, and that this measure can only be interpreted by all the members of the Travel and Trade Industry Coalition, which is a who’s who of New Zealand businesses, as an anti - defence of the realm measure and an anti-exporting measure. Again, I appeal to the Government to think again. It is not too late, even at this point, for the Government to change its mind and do the common-sense thing.

I move, That the question be now put.

I think this side of the Chamber, with United Future, has put a convincing argument why the Government should abolish the idea of putting up fees. The Greens have given us the philosophy of why it should not do that, but I am not sure where they stand on it; it appears that they are still going to vote for it.

I would like bring to the Committee’s attention part of a speech that Helen Clark gave to the New Zealand Tourism Industry Association conference just before the election. It was in July 1999, when she was the Leader of the Opposition. She said: “There is one other significant issue of public policy which I wish to highlight today. A coalition of tourism industry interests was instrumental in forcing the Government”—that is the National Government—“to postpone its plans to introduce the user-pays regime for border control services, which was announced in the Budget last year. I can announce formally today that that regime will not be established by the incoming Labour Government. We will continue to fund those border control activities which the State presently funds. Funding such core responsibilities has a far higher priority for us than the meaningless dribs and drabs of tax cuts announced by opponents.”

In addition, I would also like to draw the attention of the Committee to a letter written by the Aviation Industry Association of New Zealand just after the Labour Government came to power in 1999. A line in there, referring to that speech, states: “We also appreciated your confirmation that border control is a core State function which should be funded by Government.” A letter that the Prime Minister sent to the aviation industry, in response to that letter, has a handwritten note on the side, written by the Prime Minister, which states: “PS Yes, there is a Minister for Civil Aviation, Mr Gosche, and we will be honouring the commitment we gave you re border control.” It is signed “HC”.

💬 Shane Ardern: Who’s HC?

I can only conclude, as it came from the Prime Minister’s office, that that is the Prime Minister. Well, it came from “Leader of the Opposition, House of Representatives, Wellington”—that is, it was written when she was Prime Minister elect.

I ask the Minister sitting there how the dickens the Government can say that this country should act under the regime of good faith in everything it does, when the Prime Minister makes that sort of commitment to a section of industry, and now is rolling over on it completely. Border control, as many of us have stated many times tonight, is a legitimate cost of the taxpayer. It is not Dr Cullen’s personal money. It is not Helen Clark’s personal money. It is the taxpayer’s money, and it is legitimate, fair, and reasonable that some of it is used to make this country safe and secure for all of us—absolutely all of us. [Interruption] I am glad Mr Carter has alerted me to Mr Tisch’s amendments. I was not aware of them. We will read them if we can get a copy—I can get one off the Table—and we will support the deletion of the clauses that I think Mr Carter referred to.

This is absolutely unfair, it is unreasonable, and it is unnecessary. It has been made quite clear in this Committee tonight that everybody would support this bill if it were fair and reasonable, and the costs fell where they should, and that is on the taxpayer. The member over there thinks it is a joke. He thinks it is a laughing matter. I can tell the member over there that this country is all the better for internal and external trade, and we should be looking after exporters and importers—

💬 Shane Ardern: Where is his name on this?

The member here is holding up the pledge card. I cannot see that the Labour members are terribly interested in that now. That is all history. That is something that one says in Opposition and one wants to get into Government, then when one—

💬 Hon David Carter: The “Maharey principle”!

That is it—the “Maharey principle”.

I just want to take a relatively short call on this particular part, to re-emphasise the point that has been made, I guess, that Part 1 is totally unprincipled. We have sat here listening to the Associate Minister of Agriculture, Damien O’Connor, actually accuse this side of the Committee of trying to promote some sort of subsidy for the export industry or the farmers. Mr Damien O’Connor seems to believe that cost recovery is a legitimate cost imposed on the exporting industry.

Well, let us think about that for a moment. Do we get, for example—and I ask this in a rhetorical sense—cost recovery, in that sense, from a climber stranded on the south face of Mount Cook, with helicopter services rushing to his or her aid, and climbing parties going up at huge expense to the taxpayer? All of us, I think, would agree that emergency services are some sort of public good—that we rely on the Government to provide, through our tax, those sorts of services, so that a climber who is known to be in trouble gets some assistance. What about an ambulance service? Is there cost recovery from somebody who is run over by a bus out in the main street? Do we tell the ambulance driver that he or she must check and get some form of cost recovery from the person crushed under the bus? No, that does not happen. It is a public-good service. Let us think about search and rescue out on the ocean. We had that appalling tragedy off Moeraki just recently where a number of fishermen drowned at sea. Of course, there is an enormous cost to search and rescue. I am not sure what the figure is but it would run into the multimillions. But nobody challenges the concept and insists on cost recovery. Nobody has said that people must pay before those services are allowed to go out and help people in those circumstances. It is just not true. Does anybody in this country say that conservation in its purest sense should be based on cost recovery? Well, in some aspects I would say it should be, but in other aspects I would say that everybody benefits from, say, the kiwi recovery programme. Everybody benefits, it is a public good, and we are not trying to exclude anybody, and those points are made all the time.

Yet we get the Associate Minister of Agriculture hurling insults across this floor, saying that the farming community is asking for subsidies. What they are asking for is principle. I ask the Associate Minister to tell us the principle behind this measure. I think Mr Ardern made the point that if one is going to—well, how can I put it—reduce the cost, what principle is that based on? One imposes either the full cost or none at all. That is the argument that industry throughout New Zealand has made. If the increased costs were genuine, we would be perfectly happy to pay them. Well, nobody is really happy about paying increased costs, but if they are justified they would be accepted—but they are not. This whole concept of cost recovery from exporters for anti-terrorism measures has been challenged left, right, and centre by the export industry. I think members of the Green Party are the only people who are seeking to justify it, besides the Government. Every exporter knows that there is no principle behind it.

I spoke with an exporter of fish to France. It is a high-quality, high-value product. The costs of doing business in New Zealand—and add this cost to them—mean that instead of his exporting a high-quality, high-value product, those fish will be turned into fish fingers. That is the unintended consequence of this bill. Is that not appalling?

I finally want to make this point. Where is John Tamihere on this bill? Why is he not speaking on this bill? He is the Minister for Small Business. He is here to represent, surely, small business.

This bill is a consequence of world events that have been outside our control. It acknowledges the need to counteract transnational criminals—not those involved in the commercial sector. It is also in our national interest that our citizens are protected, and I mentioned that before in a previous speech. The bill also acknowledges New Zealand’s obligation to play a part in the international community, and it also acknowledges there are benefits for New Zealand from international trade. The point I want to make is that we on this side have argued that the measures in clauses 7 and 8 are a public good, not a private good. The whole country will benefit from the Border Security Bill, and in that context it is important that the whole country plays its part.

In fact, if we were to look at the report made by the Controller and Auditor-General, under the heading “Managing threats to domestic security” we would find a very important statement, and maybe the Minister would like to comment on it. I think it is important that we understand what this report notes: “It is important for the country’s own protection and well-being, and to meet international obligations, that New Zealand adapts to meet the new security environment in the most effective way possible. Unless security measures keep pace with those being adopted elsewhere, New Zealand risks attracting terrorist attention and could unwittingly provide a safe haven for terrorists and terrorist activities.” So what the report says is very, very succinct. There is an obligation on New Zealand to provide for its own security arrangements. The report further states: “On 28 September 2001 the United Nations Security Council unanimously adopted Resolution 1373, which binds all member States and provides a framework for the international response to terrorist attacks.” Here we have a document that is regarded around the world as being important. New Zealand is a signatory to it.

I am saying quite clearly that our security arrangement is a whole-of-Government domestic security strategy. With that in mind, although National members support this bill in its context, we cannot support those provisions that add huge costs on to our export sector—and I mentioned those earlier.

The point I come back to is that there was no mention in the original bill that there would be a cost recovery mechanism. As there was no mention of it in the original bill, someone making a submission would have thought that any provision for security would be paid for out of general taxation. That is the reason why our export sector became so annoyed with this Government. It had not had an opportunity to make submissions on that provision, because it had not been part of the original bill. So we had to provide for that at a later date, with the select committee reconvening to hear those major wealth creators of New Zealand, who had to be crammed into a 2-hour session to have their say.

The Government has talked about there being a direct benefit to traders. Well, when I look at the bill I find there is actually no mention of the benefits to exporters. The word “benefit” is not mentioned in the commentary, yet over time Ministers have said that it is the traders who will benefit. I say that this bill will allow New Zealand to benefit. New Zealand benefits from this provision, not just the traders in that sense.

I move, That the question be now put.