Customs and Excise (Border Processing—Trade Single Window and Duties) Amendment Bill, Biosecurity (Border Processing—Trade Single Window) Amendment Bill

I move, That the Customs and Excise (Border Processing—Trade Single Window and Duties) Amendment Bill and the Biosecurity (Border Processing—Trade Single Window) Amendment Bill be now read a third time. Prior to the Committee of the whole House stage these amendments were progressed through the Border Processing (Trade Single Window and Duties) Bill, which was actually an omnibus bill. The bill had its first reading on 27 August last year.

These bills amend the Customs and Excise Act 1996 and the Biosecurity Act of 1993. The two bills make important amendments to existing legislation to underpin the implementation of the Trade Single Window component of the new Joint Border Management System. The Trade Single Window ensures a smoother flow of legitimate trade and is consistent with Government priorities relating to the provision of more joined-up online services.

More than 250,000 transactions have been processed to date through the Trade Single Window. Traders are continuing to register and transaction volumes are increasing rapidly. The only feedback I get from all users of it is that it is a fantastic system and they would like to get the extra functionality online as quickly as they can.

The bills contain three key categories of amendments in respect of the Trade Single Window: registering users of the Joint Border Management System, providing information to and receiving information from the Trade Single Window, and consequential changes to offences. The Customs and Excise (Border Processing—Trade Single Window and Duties) Amendment Bill also makes minor technical changes to the Customs and Excise Act of 1996 to provide clarity and to improve the effectiveness of the Act to meet Government policy goals for border management.

I want to thank the Foreign Affairs, Defence and Trade Committee, which has proposed two amendments that have actually been incorporated into the legislation. The first makes consultation over any changes to the de minimis mandatory, so that those who are representative of interests that are likely to be substantially affected by proposed changes to regulations governing the valuation method and value for an import consignment below which duty need not be collected will be consulted.

The second amendment is to provide for the avoidance of doubt for the making of biosecurity levy orders that enable the levy to be paid at more than one rate and that can set the actual levy rate or rates. The amendment aligns the provisions in the Biosecurity Act 1993 on biosecurity levy orders with other provisions in that Act.

I have cut my formal speech short tonight because I thought that after the Committee stage, when Mr Shearer and Mr Goff raised a whole lot of issues about secrecy and privacy but have never ever given out—

💬 Hon Phil Goff: Time to give a reply to the questions.

Well, see, the problem is, Mr Goff, that I did not have my research done at that time, because I remember signing out a whole lot of things. But, you know, you sit in the chair and you think that the worst thing you can do around this place is make a claim and then get it wrong. So we had Mr Shearer say: “We’ve never heard about this secret increase. We’ve never heard about the secret increase.” Well, I want to canvass a few facts.

Let us go through some parliamentary written questions, first of all. These are interesting. The first one is from Damien O’Connor, lodged on 19 June last year. I know that some Labour Party members do not talk to Damien O’Connor—in fact, I know that most do not talk to him—but they should have. They should have, because he would have been able to tell them that my answer to that written question No. 7575 said: “The capital budget agreed for the Joint Border Management System in 2010 was $75.9m. In March 2013, Cabinet approved expenditure increase of $8.9m from within existing Customs and MPI capex baselines. Cabinet also approved $4.9m fiscally neutral transfer …”. So there is the first disclosure of the extra money, to a parliamentary question written by Damien O’Connor.

But wait—wait—there is so much more. In fact, I am sorry to do this to my colleagues. I have got pages of it. I have actually even got pages of parliamentary questions from Mr Shearer himself, who asked the questions, and then said—

💬 David Shearer: But why didn’t you know?

Well, I did not ask them, sir. You asked them, and did not remember what you had even asked. For example, a written question from Mr Shearer to me on 28 January this year asked: “What is the current projected costs for the completion of the Joint Border Management System, and what is the current estimated completion date …?”, and in the answer to that question I explained that the budget had gone up to $89.67 million because of extra functionality and scope changes that had been put in. Just like for anybody building a house who along the way decides that they might want to add on another garage or double the size of the kitchen, there is a budget increase. [Interruption] That is right. But Mr Shearer did not even know that he had got it. What he said in the Committee was embarrassing for him. He must be so embarrassed. He kept saying: “This is a sneaky, little deal that we’ve only learnt about”—hang on, I will give you his quote. I will give you his quote: “This is a sneaky, little deal that we have only learnt about for the first time tonight.” That was last week, when the legislation was in the Committee of the whole House, and yet he had got parliamentary written questions with it all laid out.

Oh, but wait, there is more—there is so much more. There is a thing called the Foreign Affairs, Defence and Trade Committee. I understand why people who are not on it may not have known what was disclosed to that committee—I understand that. But I am going to check with my colleague Mr Hayes. Are Phil Goff and David Shearer on that committee? Well, there you go—they are.

So let us go through the select committee report—let us go through the select committee report. Here we go. First of all, what went before that committee, the New Zealand—

💬 Hon Phil Goff: You’re trying too hard, Maurice.

💬 David Shearer: Maurice is trying so hard. You’re over-egging it.

Look at how embarrassed they are now. They have been caught with their pants down. They are making out that they never got told all this secret information—“We never got told it.” It turns out that not only have they had it in parliamentary written questions but it has been canvassed at the select committee hearing on estimates. I can give you the date for that—the hearing was on 14 November. I presume the members read their minutes or, if they were there, listened. The question was: “What IT projects, if any, were completed or are under way?”, etc., and the answer that was given was the Joint Border Management System tranche one, with an initial estimate of $75.9 million, but now a completion total cost of $89.7 million. There is the increase again. It was given to the members at that select committee hearing on 14 November last year. They came into the House last week and said: “This sneaky Minister—he’s never told us about the increase.” That is what they said. I have got their Hansard—I have got Hansard. It says: “sneaky Minister who never told us”. That shows us how much work those—you know the old guys up in the balcony on The Muppet Show? You know the two grumpy, old guys upstairs on The Muppet Show—that is them.

💬 Tim Macindoe: Phil and David.

Grumpy, old—what are they called?

💬 Tim Macindoe: Phil and David.

Phil and David—yeah. Phil and David—the grumpy muppets up in the balcony, grumpy as hell, and making up stories.

💬 John Hayes: They hate each other.

Do they? See, I just do not know who hates each other any more over there. It is so hard to work out.

There is even more. The select committee report that was made available on 6 December says in it—this is in the report on page 2; I will give it to you—“The Joint Border Management System has been developed since 2010 and has received considerable funding: $75.9 million in Budget 2010, with an additional $13.8 million in 2013.” That is the sneaky bit about it! We put it in the select committee report. We put it in answers to written questions to those members. We actually put it in the estimates stuff. We even had the Customs Service go before the committee and explain it all, and Labour members had the cheek, the absolute gall, to come into this House—

💬 Hon Peseta Sam Lotu-Iiga: “Dumb and Dumber.”

Yeah, “Dumb and Dumber” are their names. Now I have found that out. They had the gall.

If I had another half hour I would love to go through a whole lot more.

💬 Hon Peseta Sam Lotu-Iiga: Just one more.

OK, let us do one more. Let us do one more because there are so many more. Here we go—David Shearer.

💬 Hon Phil Goff: Hey, try answering some of the questions that you’ve avoided.

OK, we will try. A written question lodged on 28 January from David Shearer about the decommissioning of CusMod asked whether CusMod was supposed to have been commissioned. The answer was no, the decommissioning was only ever planned to be done once the full operation of the Joint Border Management System was up and running. But again Labour members said: “Oh, it’s all up and running. CusMod is still running, isn’t it?”. Yeah. Would you like me to have done a Novopay and switch it all off and then have nothing? Is that what you would like? But, again, in the short period of 10 minutes—when I can spend my time ripping them to shreds because it is so enjoyable—they sat in this House and David Shearer got up with all of the anger he could muster and said: “This is outrageous. We have got a Minister who has deceived this House. He hasn’t disclosed these numbers. We have never seen them until tonight.” That is what he said. That is what he said, and guess what? Not a skerrick of it, not a jot of it, not an iota of it was even close to the truth. That is an outrage.

What an extraordinary speech from Maurice Williamson. I was really glad that there was a doctor in the House, Paul Hutchison, because Maurice Williamson went red in the face. He huffed and he puffed, but what he could not do was hide his embarrassment. That must be the first time that I have heard a Minister get up and confess in his third reading speech that he had stuffed up in the Committee and had not done his homework. Not only had he not done his homework, he was being entirely disingenuous about what happened in the Committee, because what we know happened in the Committee was that the Minister of Customs admitted there had been a budget blowout—from $75 million out to nearly $90 million. That is a 17 percent blowout. And do you know what he did not explain? He did not explain why there had been a blowout.

💬 Hon Maurice Williamson: We did. It’s in the questions.

He did not—no, it is not. It is not in the answers to the question. The Minister is yet to explain to the House why his budget has blown out by 17 percent. He has yet to tell the House whether that is the end of the process or whether there will be further cost escalation. He has yet to tell the House where that $13 million came from. Is that going to be at the expense, Minister—before you leave the Chamber—of the other services that the Customs Service is offering? What happened?

The Minister explained one thing when the bill was in Committee. He said that there had been two variations—two variations—that had caused extra cost. Was that an admission that the Government was to blame because the Government, having set out the plan for IBM, then kept moving the goalposts so that the costs went up? And if that is the case, I am really worried because I remember the INCIS program. There are a few others. I think Paul Hutchison was here in the 1990s when under a National Government the police budget blew out $100 million—down the drain with nothing to show for it. This is where institutional memory is quite useful. When we did the select committee inquiry, what did we find? There was a failure of the INCIS program, with $100 million of taxpayer money down the drain, because the Government kept changing its mind and changing the requirements. That is just what we heard from Minister Williamson in the Committee of the whole House: the Government had changed the requirements.

So maybe the Government is to blame. It was its incompetence. But then the Minister said in Committee one other thing. I have got my notes, and the Hansard is there. He said that there are contractual obligations and that they will hold people to account. Well, that suggests that the Minister was blaming IBM. My colleague David Shearer asked the question of whether the Government is going to sue IBM to recover some of that money. Is it IBM that is to blame? Or is it the Government because it kept changing its mind on what it actually wanted and what it needed? Then we tried to find out from the Minister. We tried to screw the information out of him about what the problems were with the system. He said that there were defects. He admitted there were defects. “It didn’t quite work.” was the phrase that he used. Well, what did not work? Is it being managed? Is it being resolved? Has it been resolved yet? Is the problem ongoing? Is the problem still to be resolved? None of those questions—asked time and again in the Committee—was answered by the Minister, and he comes in here with disingenuous outrage to say that they had all the answers. The problem is that in the Committee of the whole House the Minister gave no answers.

Then there were other things. He said that all the information was there. Well, I recall, and Hansard will have recorded, that in the second reading of the debate on this bill I asked questions about IT problems, and I challenged the next National speaker to get up and explain what those problems were. There was silence. Nothing was said. The Minister has made no press statement, no public comment, about why these problems have existed, how serious they are, and whether they are being resolved. We are yet to hear those answers, and the challenge on the next sitting day will be for the next National member to explain what has actually gone wrong here.

Then the Minister came into the House and used the word “sneaky”. He said that we had accused him of being sneaky. No, Hansard will prove that that is not true, that that is dishonest. It was the Minister who said that an honest customs official and an honest contractor were being sneaky by acknowledging that there were problems. That is how keen the Minister was to cover it up. His first answer to my question was: “Who told you that?”. He said: “What sneaky person behind a gorse bush let out that information?”. I am glad the Customs Service and the contractors have been honest about that, because the Minister has been anything but honest. It is not the person or persons who said there were problems in the system who were being sneaky; it was the Minister, who never fronted up, not in the House, not in public, and not through the medium of the press, to explain what was happening with this new system.

This is a new system, which we on this side of the House support. It was a concept that came out of a Labour Government, and it is a concept that is a good concept. I am not challenging the concept; I am challenging the implementation by this Government, because we have put up with INCIS under a former National Government, and right now we are still putting up with Novopay. It is 2 years after it was introduced and “Mr Fix-it” was put in place—because Craig Foss had failed to fix it—but “Mr Fix-it” has not fixed it. It is getting worse. We deserve to know, in this House, whether this system of the Trade Single Window IT support is suffering the same sorts of problems as Novopay.

I know there is one difference. One difference is that there is a parallel system. The old system is still in place: CusMod. Is that the only reason why this is still working—because they are relying on the parallel system? We deserve an answer to that. I understand that CusMod was due to have been phased out by now. Is that correct, Mr Hayes? Is that correct? That is what we understood at the Committee, I think. What we now know is that this system, the old system, is still being generated because the new system is failing. They will not tell us how it is failing, the degree to which it is failing, but we know there are problems. We know the problems, from the body language of the Minister when we met in the Committee of the whole House. We know the problems are real, because of the body language of the officials. We know the problem is real, because of the pretended offence that the Minister took about us even raising it. But it is right to raise it. I want to know when the Minister became aware of that problem. Why did he not tell the public? Why did he not tell the House? Why was it that he was reticent, and it took Customs Service people and those dealing with the Customs Service to bring out to the public that there was a real problem being faced here?

It is a tragedy that a concept that is a good concept—it is a great idea to bring together into a joint border processing system both the Customs Service and the Ministry for Primary Industries to have a single window system that is a single portal, so that there is a one-stop shop for business. It is a great idea if we can make the system more efficient. It is a great idea for business if it reduces their costs. It is a great idea for the consumer if it means cheaper goods because the border processing costs are lower. It is a great idea if it makes New Zealand internationally competitive.

But what we know from the Committee stage, finally, when the Minister, who had never done his homework and admitted that he had not done his homework, is that there is a problem in the system. The National Government owes it to the people of New Zealand and it owes it to this House to explain the precise nature of that problem. We do not yet know from the Minister whether the problem has been fixed. My challenge to the National Party member who rises to his or her feet to take the next call is to explain to us what the problem is. What required a blowout of $13 million extra? Is that the last of the blowout? This is only tranche one. Are we going to have the same problems with tranche two? Is this going to be another Novopay-type episode, where the Government fails to put in place the machinery necessary to implement a change that is desirable?

People in New Zealand have had a gutsful of a Government that cannot manage its IT system properly. Why was the Government not more up front about this? Yes, I accept that there was a figure buried in a Customs Service report. I never heard the Minister say a word about it. He never came into the House and answered the questions in the second reading debate. He did not answer the questions—and I took four calls—that were put to him in the Committee stage. This is a Government that has not been upfront. This is a Government that has mismanaged the IT processes. This is a Government that is still to come clean with New Zealanders about the precise nature of the problem.

I have got a lot of pleasure in standing up to discuss the Customs and Excise (Border Processing—Trade Single Window and Duties) Amendment Bill and the Biosecurity (Border Processing—Trade Single Window) Amendment Bill this evening. The Minister who is responsible, the Minister of Customs, is more IT-savvy than anybody else in this Chamber this evening. I think he has done an absolutely fantastic job. I will say to the last speaker, the Hon Phil Goff, that more than 250,000 transactions have been processed to date through the Trade Single Window, traders are continuing to register, and transaction volumes are increasing. Building a more productive and competitive economy is, of course, one of our major—

I am sorry to interrupt the honourable member but the time has come for me to leave the Chair.

Debate interrupted.

The House adjourned at 10 p.m.