Border Processing (Trade Single Window and Duties) Bill

Before question time, we were debating this riveting piece of legislation called the Border Processing (Trade Single Window and Duties) Bill. The bill amends the Customs and Excise Act 1996 and the Biosecurity Act 1993 to support the implementation of the Trade Single Window component of the joint border management system. These are ideas and concepts that were introduced initially under a Labour Government.

This is not hugely controversial legislation. Labour is intending to support it. But, lo and behold, when the bill came up for its first reading, who was the Minister moving the first reading motion? It was Craig Foss, the Minister who was responsible for Novopay. The joint border management system is an IT system. It is designed to replace outdated systems in the Customs Service and in biosecurity in the Ministry for Primary Industries. When I saw Craig Foss, the man responsible for the debacle over Novopay, get up to move the first reading of this bill, I almost recommended to Rino Tirikatene that we change our mind on whether we support it, because after that debacle, how could we have confidence in this IT system, which is in fact the biggest single investment, probably, ever made by the Customs Service?

A year after Novopay there are still bungles that have not been sorted out, and we have spent tens of millions of dollars more than was budgeted for a system that has failed. So how could we have confidence in this system? Then I read that the actual IT agency that is supplying the goods is IBM. IBM is the agency that about 12 years ago was responsible for the police INCIS system. The police INCIS system—I think you, Mr Speaker, were here at the time—cost $100 million, and at the end of it they threw it away. That was $100 million of wasted investment.

Between the combined influence of Craig Foss and the track record of the National Government, time and again getting it wrong, I wondered whether we should be supporting this legislation. Look, let us be fair about it. Labour brought about the introduction of this legislation. It is designed to give the Customs Service and the Ministry for Primary Industries better information and risk assessment tools for targeting higher-risk trade and passengers. For Mr John Hayes, who said that this had nothing to do with people, I note that the joint border management system, of course, does include passengers, though this tranche deals with goods and services. I am particularly worried as to whether this legislation, which is inherently good legislation, will be undermined by cuts that are being made to border security and biosecurity.

Mr Hayes shakes his head, but in 2009 that Government sacked 54 biosecurity officers from around the airports and the ports of this country. That was in 2009. In 2010, 18 months later, we had Psa in this country. Psa has cost this country tens if not hundreds of millions of dollars, and John Hayes knows that. So what I want to say to this Government is that it is penny wise and pound foolish. It will try to make cost cuts to save a little bit of money in the short term, only to find that the long-term costs and risks to this country are immense.

Then we saw the Budget this year, and in terms of biosecurity the Government had chopped another $6 million. You can bring in whatever border security IT system you like, but if at the same time you are undermining biosecurity by cutting costs and cutting the officers who are working hard to protect New Zealand, its agriculture, its exports, and its lifestyle, then you are wasting your money on this legislation. So I ask the Government how we can be confident that we will not see further botch-ups, because at the same time as we are introducing this legislation, we have seen restructuring of the Ministry for Primary Industries and the Food Safety Authority. At the same time that that was happening, we saw an unprecedented failure in terms of quality assurance about our export goods on dicyandiamide, on botulism—or the suspected botulism—on nitrates, and on meat exports that sit on the wharves.

I say again to this Government that, yes, it has been smart enough to pick up Labour’s idea on this legislation, but not smart enough to stop cost cutting where it affects New Zealand’s vital interests, and not smart enough not to restructure departments so that they no longer work. The Food Safety Authority is a classic example of that. I could talk about the Ministry of Foreign Affairs and Trade, which lost its key trade negotiators, Mr Hayes, and now John Key is saying “Maybe we’ve got to go out and recruit some.” Of course you have got to go out and recruit some, because the botched restructuring saw some of the best people—and Mr Hayes knows this to be the truth—in the trade negotiation area lost.

The Trade Single Window as a concept is a good idea. It will enable businesses to complete border requirements for customs, food, and biosecurity purposes through one electronic transaction. It will make compliance easier. It is better at providing risk-related information, and for that reason Labour will support this bill, despite the bungling and the botch-ups of the Government, which has done so much damage in other areas of biosecurity and trade.

Thank you for the opportunity to speak on the first reading of the Border Processing (Trade Single Window and Duties) Bill. New Zealand is a trade nation. Trade is essential to our economy. The National-led Government has done, or has been doing, whatever it can do to promote New Zealand trade and to help our traders. This bill is yet another example. Our trade has been growing. For example, we have a plan to double our trade with China from $10 billion in 2010 to $20 billion in 2015. We are confident that we will be able to achieve that goal. This bill is an omnibus bill. It amends the Customs and Excise Act 1996 and the Biosecurity Act 1993 to support the implementation of the Trade Single Window component of the new $89 million Joint Border Management System, or the JBMS.

The changes in this legislation are important because they will increase the efficiency and effectiveness of the Acts. The Joint Border Management System is a joint initiative by the New Zealand Customs Service and the Ministry for Primary Industries to replace current information systems. A more efficient and effective system will result as border clearance processes for persons, goods, and craft are modernised and combined. The Trade Single Window component of the system provides a single electronic gateway for industry to interact with Government agencies for their customs and biosecurity requirements. New Zealand’s border will be better protected and a smoother flow of legitimate trade will be ensured. So there is no impact on people travelling in and out of the country, because the changes relate to the importing and exporting of goods and the arrival and departure of craft only.

The amendments in the bill fall into three categories: first, registering users of the Joint Border Management System, which will provide for a wider range of border requirements; second, providing information to and receiving information from the Trade Single Window, which will adopt the World Customs Organization’s international data model; and, third, consequential changes to offences, which include failing to comply with the new requirements and failing to update the Customs Service with the correct information. Building a more productive and competitive economy is one of the National-led Government’s priorities. Supply chain efficiencies from the Joint Border Management System are estimated to deliver benefits to the economy of at least $450 million over 10 years, which is good news for New Zealand. I commend the bill to the House. Thank you.

Before I call the honourable member, can I just ascertain whether this is a 5-minute call, a split call?

💬 Hon Members: Yes, it is.

It is an honour to take a short call to speak on the Border Processing (Trade Single Window and Duties) Bill. Labour supports this bill, and I welcome it going to the select committee where, no doubt, it will be scrutinised, tested, and enhanced for fit for purpose. For the benefit of viewers and listeners at home, can I remind us all that the intent or the purpose of the bill is to amend the Customs and Excise Act of 1996 and the Biosecurity Act of 1993 to support the implementation of the trade single window component of the Joint Border Management System. To that end, can I commend this side of the House for conceiving the Joint Border Management System initiative, and this is why Labour is supporting this bill to the select committee. What is the single trade window? It creates a hub for exchanging information. I particularly want to acknowledge previous speakers who talked about front-line staff ensuring that our borders are secure, particularly our biosecurity systems, because, as previous speakers have said, our reputation as being a green, safe economy is important to our economy.

I particularly want to talk about two areas that were raised by previous speakers. One is the IT reputation of the system that is being put before us in this bill. I too share some of the concerns that the Hon Phil Goff mentioned in this House around the debacle with Novopay and in particular with INCIS. When reading that this initiative is to create a one-stop shop of intensive data-sharing, it did give me some concern to ensure that we do not fall down that trap of what happened with INCIS and Novopay. This is why I again look forward to the bill going to the select committee, to get those assurances that that will not happen this time around.

I also want to acknowledge Mr Hayes for introducing this bill. He mentioned in his speech the advantage that this will bring to particularly cherry-growers and apple-growers. As the member for Ikaroa-Rāwhiti and coming from the fine Hawke’s Bay where apples, amongst other things, such as wine, are grown, I too look forward to a bill that enables economic growth at the regional level. Can I share with the House that in my by-election days members of the Labour caucus were fortunate to meet with apple-growers, in particular with John Bostock from Hawke’s Bay, who shared his views on economic growth, particularly in the apple-growing industry. He shared with us the hope of having expanding markets, land availability, and skilled labour. What I can respond to him is that we are introducing a Border Processing (Trade Single Window and Duties) Bill that will lead to economic growth. Hopefully, John will see the value in that.

We also spoke to the owners of Apollo Apples Ltd—one of the largest apple-growers in Hawke’s Bay—and they shared their views on economic growth in the Hawke’s Bay. They have got one of the largest cool-storing facilities in Hawke’s Bay and it has been under-maximised. When we talk about benefits for apple-growers and cherry-growers, I want to bring to the attention of the House the need for regional development investment, particularly in the Hawke’s Bay, to ensure that we can maximise the primary industry around apple-growing and that it is realised, which I completely support. Again, I stand in support of this bill and commend it to the select committee. Thank you.

It is a pleasure to take a call on the first reading of the Border Processing (Trade Single Window and Duties) Bill. I would like to acknowledge my colleague John Hayes, who is the chair of the Foreign Affairs, Defence and Trade Committee, which will be receiving the bill. I am sure that the committee will be very happy to get this bill.

If we accept the fact that we are an export-based nation—and we are—and that 70 percent of our productivity is driven by the private sector, then this is actually a very, very good and important bill. One thing that we do face, as a small nation down the bottom of the world competing with the rest of the world, is our supply chain, the fact that we are further away, and, therefore, we do incur more costs, and, therefore, we have to be more efficient. I would just like to acknowledge our exporters and our private sector because they spend a fair bit of time and invest a fair bit of their own capital in making sure that we are competitive and that we do have an efficient supply chain. The Government should be doing its bit in supporting them, and this bill goes a long way to doing that.

From my own experience in the logistics industry there has been a lot of investment gone into very, very sophisticated programmes in partnership with companies like Microsoft, focusing very heavily on in-transit visibility. Of course, this bill has also got a flavour of that, in terms of exporters and importers being able to have visibility on where their freight and where their containers are.

I would just like to focus in on the registering of users of the Joint Border Management System because really this is where the rubber hits the road for a lot of our companies, in terms of being able to streamline the process. Having had to deal with multiple agencies, they are now able to interface and deal with one agency. The Customs and Excise Act 1996 requires that all goods imported or exported must be entered into the customs computer system by individuals—being importers, exporters, or their agents—who are registered users of the system. The trade single window will provide for a wider range of border requirements. For example, registered users will be able to provide and receive information on the movement of their goods, streamlining the supply chains. That sort of comes back to what I was saying earlier about this in-transit visibility and actually how critically important that is. The bill amends several aspects of the Customs and Excise Act to ensure that there is an appropriate registration mechanism for access to and use of the Joint Border Management System.

The other thing that is actually really important about this bill is that there is a focus, of course, on making sure that our borders remain secure. We are very fortunate in many respects that we are an island nation. I have lived in countries where they have multiple shared borders, of course, and border security and biosecurity are always very, very big issues there, and costly in terms of trying to manage those. We are fortunate as an island nation that we are able to focus very carefully on how we do that ourselves.

The areas covered by the amendments include allowing companies to be registered users instead of individuals only, specific grounds on which the Chief Executive of the Customs Service can refuse an application are included, and allowing the Chief Executive of the Customs Service to issue unique user identifiers for the Joint Border Management System that can be used by both customs and the Ministry for Primary Industries for border-related purposes. Finally, I would just like to say again that this is a very, very good bill. I am sure that Mr Hayes and the Foreign Affairs, Defence and Trade Committee are looking forward to receiving this bill, and I commend it to the House.

Chris Hipkins for the balance of the 5-minute call.

I am very happy to take a short call on this bill, the Border Processing (Trade Single Window and Duties) Bill. Look, like every New Zealander I probably think most about border control when I am going through the airport, and going through Maurice Williamson’s SmartGate. It is one of those terrible things to admit, but when I get off a long overseas flight one of the first people I think about is Maurice Williamson. I think about Maurice Williamson when I am going through the border and going through SmartGate. You will be pleased to know that the SmartGate technology has obviously improved considerably, because the first time I tried to go through SmartGate I failed and it would not let me through. I did not pass. But my most recent interactions with SmartGate, you will be pleased to know, were very, very positive, and I made it through. I was very relieved.

💬 Tim Macindoe: That was your security profile, not the technology.

Oh, that was the security profile. That is right, the Government Communications Security Bureau has been on to me.

Border security is incredibly important to a country like New Zealand. To some extent, I guess, we are lucky in the sense that we do not have any other countries touching us. We do not have other land masses touching us. We are surrounded by a massive amount of water, so on one level that makes controlling our borders a little bit easier, but then on another level it creates a whole lot of challenges as well because we cannot patrol absolutely every beach and every potential area where somebody might try to come ashore in New Zealand. But I think that by and large we do a very good job of controlling New Zealand’s borders.

One of the reasons that border security is important, of course, is the significant biosecurity implication for New Zealand if things go wrong. We just cannot afford to get that wrong. We have an amazing advantage, I guess, in New Zealand in the fact that we are so isolated geographically as a country. That has meant that certain things have not spread to New Zealand, and we want to keep them out. There are a whole lot of pests and diseases and so on that we have managed to avoid having here in New Zealand, and we want to keep them out. That is where our biosecurity at the border is vitally, vitally important.

So I am concerned. I share my colleague Damien O’Connor’s concern about the cuts to biosecurity funding, because as we have seen just recently, New Zealand relies so much on our clean, green, 100 percent pure image. Any biosecurity incursion could do significant harm to that. If you take many of our primary producing exporters and the potential for significant economic harm to them from a biosecurity threat or a biosecurity risk, it is really, really important that we do not scrimp in this area in order to save a few dollars, which ultimately would be so detrimental and so expensive to the New Zealand economy should something happen, and should things go badly wrong. I think this is an area where we need to be very careful.

But turning now to the bill that we are debating, the Labour Party supports this bill through its first reading and we are looking forward to the select committee process on the bill. I am sure my colleagues Damien O’Connor, Shane Jones, and various others who have a real interest in this area will be getting into the detail at the select committee. We think that the front-line agencies, the border security agencies, do an absolutely amazing job. The Joint Border Management System initiatives were actually conceived when Labour was last in Government. One of the things, I guess, that I always find interesting is that 5 years into my time in Parliament it is heartening to see how many initiatives simply span across all Governments, regardless of who the Government is.

In an area like biosecurity where I think there is quite a lot of bipartisan agreement, this initiative has obviously been going on for some time and we continue to support it. A single trade window will create a hub for exchanging information. In areas like border security and biosecurity the exchange of information is vitally, vitally important. It will introduce the first wave of a major information technology overhaul to replace existing outdated systems and modernise and integrate border clearance processes for persons, goods, and crafts. This is people going through the airport but it is also all the ships coming in. It covers quite a variety of things coming into the country, which is very, very important.

We need to make sure that we get this right. I think Phil Goff made a comment before about the fact that the IT systems that will have to be put in place in order to make this work should not turn out to be another Novopay or another ACC debacle. We have got to make sure with these information and communications technology projects that we get them right. I am not convinced yet that the Government has sufficiently robust mechanisms in place to ensure that the significant investments in information and communications technology and information sharing are actually going to run smoothly and efficiently.

💬 Hon Christopher Finlayson: Yeah, thanks Chris.

I am pleased that the Attorney-General has been listening very closely to every contribution, and I look forward to seeing the passage of this through its first reading.

Bill read a first time.

Bill referred to the Foreign Affairs, Defence and Trade Committee.