Border Processing (Arrivals and Departures) Levy Bill

I move, that the Border Processing (Arrivals and Departures) Levy Act be now read a second time.

The ASSISTANT SPEAKER (Lindsay Tisch): It is a levy bill, not an Act.

I move, That the Border Processing (Arrivals and Departures) Levy Bill be now read a second time. As I outlined to the House earlier, this levy will fund the costs of border processing incurred by the Ministry for Primary Industries and the New Zealand Customs Service, and ensure that border services are sustainable.

The Ministry for Primary Industries and the Customs Service together spend around $100 million a year on border clearance for passengers and crew. In the past these costs have been met by taxpayers. It is worth noting that around 55 percent of arriving and departing passengers come from overseas, and therefore do not contribute directly to the costs of our border services. The Government considers it is fairer for these costs to fall on passengers travelling internationally.

Our borders are dealing with increasing volumes. Arriving air-passenger volumes have grown by more than 18 percent, from 4.4 million in 2009 to 5.2 million in 2014, and are expected to continue to increase by around 3.5 percent per year. The levy will help ensure our border processes stay fit for purpose into the future.

It is likely that the total costs for all passengers arriving in and departing from New Zealand will be around $22, inclusive of GST, but further modelling—[Interruption]—in consultation with stakeholders, if members opposite would listen, and with the New Zealand public needs to be completed before the total amount is confirmed.

Officials are preparing a discussion document outlining the proposed options, which will be released for public feedback in June. The levy is proposed to take effect on 1 January 2016, and will be applied to tickets purchased on or after that date. Around 95 percent of travellers cleared at the border arrive on commercial airlines, about 4 percent come on cruise ships, and the remaining 1 percent come on private aircraft, yachts, cargo ships, etc.

This announcement is part of a range of measures in Budget 2015 to improve security and services at the border involving immigration, customs, and biosecurity. The Ministry for Primary Industries and the Customs Service have already been working closely together to make improvements at the border, sharing their facilities, cross-warranting of staff, enhanced profiling, targeting of incoming passengers, and the use of automated systems such as SmartGate.

The introduction of the Border Processing (Arrivals and Departures) Levy Bill will put border services on a sustainable footing by allowing funding to increase as passenger numbers rise, which is fairer, and it will be more responsive to managing the risks at the border as well as providing quality services. I commend this bill to the House.

Kia ora, Mr Assistant Speaker. I am pleased to speak at the second reading of the Border Processing (Arrivals and Departures) Levy Bill. Ordinarily, a second reading takes place after the bill has been referred to select committee, and has received public submissions and viewpoints from the industry and from all around affected persons. That is the path that this bill should be taking but, unfortunately, here we are on Saturday, approaching 6 o’clock, and we are now into the second reading of a bill that this Government has admitted is a tax. I would like to acknowledge Mr Smith for telling the truth and acknowledging that this levy is a tax. So thank you, Mr Smith, for that. I am sure you will progress really well amongst your team. Good luck to you.

This is a tax and, unfortunately, it is a slap in the face for New Zealand’s tourism industry. It is the second-largest foreign-exchange earner for our country: over $10 billion in earnings is generated by the tourism industry. What was the tourism industry told about this? What was the tourism told about this—absolutely nothing. And who is its Minister, the Minister of Tourism? That is right, “Jandal John”—“Jandal John”, flip-flopping all the time. Just a couple of years ago he was trying to advocate to bring down these taxes, so we could actually have open transfer and facilitation of tourism travel. But no, what has he done? He has absolutely thumbed his nose at the industry and absolutely gone contrary to all of the work that it has been doing. It has been outlined in the 2025 strategy of the New Zealand tourism industry. A lot of work has been going on in terms of promoting freer flow of tourists, and what we are seeing is the opposite. This bill will actually be doing the opposite. It is just an attempt by this Government to collect more revenue by targeting travellers—ordinary Kiwis, ordinary folks, and all of our international visitors who want to make a trip to New Zealand.

But there is a cost to this. There is the assumption that, yes, we have got a free flow of visitors, but if you look at the trans-Tasman market for tourists there are a million empty seats on those flights every year. It is a highly priced, competitive, short-haul flow of aircraft, and so it puts a lot of pressure on the travel agents, the airline industry, and the like.

Sitting suspended from 6 p.m. to 7 p.m.

As I was saying before the dinner break, the tourism industry has identified the actual benefits from lowering or having no travel taxes imposed. It has been working very closely with our Australian counterparts. There are a million vacant seats—unused seats—on those routes and the tourism industry research said that there could possibly be a 13 percent yield in benefits from maintaining or having lower or no travel taxes imposed. But what has this Government done? It has actually done the complete opposite, and we are now imposing our own travel tax.

The other point I want to make is around what the proceeds from this travel tax will be going towards. As we know, they are going towards protecting our borders and biosecurity. Basically, this is an admission from this Government that its border management has been underperforming. This measure is an admission of that, and what we have seen are the incursions of fruit flies and other nasty organisms that pose a real threat to our primary industries, especially. This should not be taken lightly. It is a very, very serious matter, our biosecurity system. I know that the Ministry for Primary Industries has various levels of protection, I guess, that we use. But this is an admission that the Government has been underperforming, because you know you are in trouble when you have to call your fisheries officers out to try to chase a fruit fly or look after a sick pig. You know you are in trouble when you are doing that. Our dedicated and highly trained fish cops have been diverted by biosecurity matters.

💬 Kris Faafoi: Coast gets plundered.

Absolutely, and then the coast gets plundered. So that is an admission from this Government that it has underperformed in this area. It is a shame, though. The Crown has funded our biosecurity system and our services, and it should continue to do so. There is no need. It is hurting our tourism industry and it remains to be seen whether there is a reduction in visitor numbers as a result of the imposition of this tax.

The other point I want to move on to now goes back to the Joint Border Management System, the JBMS. That is right, that $100 million lemon, which has not even been delivered yet. The full functionality has not been delivered and it is still kept a secret. If this travel tax is imposed, I think that the travellers—the people who are leaving our shores, and our tourists—have a right to know what their levy spend is actually going on. The Minister has given an assurance with regards to the Joint Border Management System that there is nothing to see and everything is all OK. Well, if that is the case, then why keep it secret? I believe that if Kiwis are paying this tax, which is there to protect our borders, and there is a joint system that has cost $100 million, then Kiwis need to know what they are paying for. There has been a failure to deliver on the Joint Border Management System. For cargo users of the Joint Border Management System, there is a user-pays charge. They know what they are paying for. Well, what is the passenger component? What is the passenger component of the Joint Border Management System? What is that passenger component, because travellers have the right to know? They do have the right to know.

If passengers are paying a levy for greater, enhanced, sophisticated risk analysis of their movements, well, then it is very fair that the public of New Zealand, especially, who have paid over $100 million so far, have a right to know what they are actually getting. Enlighten us, Minister. Enlighten the country as to what it is, because what are the risk and intelligence tools that the Joint Border Management System is delivering? We want to know because the system still has not been delivered yet. It is 3 years too late. It still has not been delivered. We have been told that the delivery date is going to be December this year, but now it is getting put back. We are getting signals that it can be put back again. The Joint Border Management System is actually the engine room, or it is supposed to be. The computer systems between the Ministry for Primary Industries and the Customs Service are joined up so all of the passenger screenings and the biosecurity risk analysis are driven by the Joint Border Management System. If the travel tax is going towards that, then we need to know what the passenger component is. Hopefully, the Minister will enlighten us later on, because that is a very serious issue of public interest, given the huge price tag on this system, which no one seems to know what it is doing and you never hear anything about it.

💬 Hon Nicky Wagner: It’s because it’s working so well.

Well, it is not working so well. If it was working so well, why are you keeping it secret? Why are you keeping it secret, Minister?

💬 Hon Nicky Wagner: Success is no news.

Well, no. This Minister has been negligent in suppressing the details. The public of New Zealand deserve an answer, particularly now that all travellers who will be crossing our borders will be paying a levy that will be subjected to the Joint Border Management System. They are paying for it, so they have a right to know what they are getting for their spend. So we are looking forward to your elucidation on that point. We know that this is just another tax, we know it is a broken promise from this Government, and we continue to oppose this bill.

The New Zealand public told us they wanted a safe border. They want to make sure that it is secure against illegal people and illegal goods—that is, drugs, firearms, and objectionable material—and they want us to manage biosecurity risks such as fruit fly and foot-and-mouth disease, and that is what this levy will do. This levy in the Border Processing, (Arrivals and Departures) Levy Bill will amend the Biosecurity Act and the Customs and Excise Act, and it will impose a border clearance levy for arriving and departing passengers.

I want to make it very clear that this levy is only cost recovery. It will be put into a trust account. It will have nothing to do with the Joint Border Management System, because the Joint Border Management System deals with goods. This is to do with passengers, and the Joint Border Management System deals with goods, and Joint Border Management System goods have always had a levy. Goods have had a levy since the early 1990s, so this is exactly the programme that we are going to introduce for passengers as well.

I want to start by answering Mrs King’s question: what is the difference between a levy and a tax, and why is it absolutely consistent that the Prime Minister has attacked the UK carbon tax and is absolutely supportive of this cost recovery levy? New Zealand’s cost recovery levy is about $20, maybe $22, and that reflects the cost that the New Zealand taxpayer is subsidising for every single passenger who comes across our border. The UK tax is about $150, and although $20 of it may be used for a border levy the rest of it is a carbon tax, and it was designed to be a carbon tax. It is a carbon tax on distance, a carbon tax on air miles flown for long-haul passengers. Of course, that is calculated on the number of miles, and that is particularly tough on a country like New Zealand on the opposite side of the world.

At the moment, if you look at the status quo in New Zealand, it is a lose-lose for New Zealanders. Every New Zealander is paying for other people to come across our border. Then, on top of that, when New Zealanders go to another country they have to pay to go across others’ borders. So not only are we paying for our own borders but we are also paying for everybody else’s borders. That is lose-lose. This change will mean that it is best international practice and it will bring New Zealand into a place that is much more satisfactory for New Zealanders.

I would also like to explain to Mr Lees-Galloway about the cost of this. It is all to do with addition. What our press release said was that it is going to cost $16 at arrival. The levy is $16 at arrival and $6 at departure. The reason for that is that there is much more work at arrivals than there is at departure, because we deal with biosecurity at arrivals rather than at departure. But instead of it being inflationary, as he seems to think, it is actually going to be deflationary, because I think it is probably going to end up at about $20. We believe it is $20 well-spent for New Zealanders, to protect our borders. Just let me make it very clear. This is in comparison with Australia, which is $58 and the UK, which is $150.

Let us now have a little bit of a chat about the Joint Border Management System. I would like to answer Mr Shearer’s queries and Mr Tirikatene’s questions. The Joint Border Management System is working well. I will make it clear again. It manages goods, not passengers. Goods have always paid a cost levy. So this levy actually brings passengers in line with goods. I am really pleased to be able to announce a really good news story. Right now we are able to tell you that the Joint Border Management System has just reached 2 million transactions. I did put out a press release about this time last year when we got to 500,000. But we have now got to 2 million transactions.

💬 Stuart Smith: Wow, 2 million.

Fantastic. And on top of that, exporters now have the ability, the tools, to be able to register online themselves. In the past it used to take 24 hours to register online. They can now do it within minutes. That is a fantastic improvement for the Joint Border Management System. I would also like to tell you that every week more companies are transferring to WCO Data Model 3, which is the new data protocol. This is cutting-edge, latest technology, latest data protocol, and every week more and more of our transactions through the Joint Border Management System are moving that way.

I would just like to make the point that the Customs Service is 175 years old this year. It is the oldest department—175 years. We are also dealing with cutting-edge technology, cutting-edge IT, and I think it just goes to show that you can teach old dogs new tricks.

Also I would like to make a comment for the member Steffan Browning. He was concerned about private yachts. This levy will be in place for private yachts, private aircraft, and anybody who comes across our borders. As it is now, every yacht and every aircraft that comes into New Zealand goes through the customs process for arrival and departure, and we will collect the levy at that time. So he needs to understand that we will be doing a good job.

Finally, I want to get back to Rino Tirikatene again. I just want to tell him that we are not taking biosecurity or security at our border lightly. He seems to think we take it lightly. He probably has not realised that we have actually put $30 million in this Budget on top of this levy to beef up what we are doing at the border. So in the meantime this $30 million is going in this Budget. I also want to tell him that nobody seems to believe that this will make a difference to tourists’ behaviour. This cost is less than 1 percent for a long-haul flight, and it is only one of thousands of variables that people have when they travel. For example, how much does it cost you to get to the airport? What do you eat at the airport? What do you buy duty-free? What do you spend on entertainment on the plane? What do you spend in your country? The interesting thing is that I had a look at some research that said that in the last month the average Australian visitor to New Zealand lost more than $20 just on the exchange rate between Australia and New Zealand. So this is not going to make a difference. In fact, I have a quote from a well-respected tourist leader, who says “It won’t make a blind bit of difference.”

I just want to summarise why this levy is so important for New Zealand and why New Zealanders should be pleased to see it. First of all, it is flexible and futureproof. As the numbers of passengers and travellers increase across our borders, the resources will be there to manage them. As we get more and they are more risky, we will be able to make sure that we keep our borders safe. It is also fairer. I have explained that at the moment every New Zealander, every Tom, Dick, and Harry, is paying $23 in their tax to subsidise international people coming across our borders—people who are on a luxury cruise, people who are coming to play golf in New Zealand. So why should the Whangarei panel beater or the solo parent in Christchurch pay for these people to come across our borders? What we have got now, because the rest of the world is putting on these levies, is a lose-lose for all New Zealanders.

I just want to make one little reflection before I go. Before I was an MP I did not used to like paying tax. I think it was because Labour was in power and I did not trust the way it spent the money. But now I do understand where the money is going, I know that it is spent wisely, and I do not feel so bad about our tax. Most New Zealanders want their tax money to go to something useful. They want it, perhaps, to go to poorer families. They want it to go to hip operations. They want it to go to education. People like their taxes to go to something useful, not to subsidise international passengers. So this levy is good for New Zealand, it is good for New Zealanders, and I commend this bill to the House.

There is hope for Stuart Smith, because before the dinner break he got up and he told New Zealand what we all know: tonight we are debating a new tax that National brought in. We on this side of the House were discussing over dinner what a tragic end this was to Stuart Smith’s political career—so short, burnt bright, and out on one night. But Nicky Wagner has saved him. Stuart Smith could be the next Nicky Wagner—that is what we are finding out tonight—because she has just told us that the promise has been broken: “No new taxes.” That was the promise, and Nicky Wagner has just told us right now that it is a tax. Every single New Zealander knows that, Nicky Wagner.

John Key went on the television last night and invited New Zealanders to google the difference between “tax” and “levy”. So I have done that, and I can tell you that a tax is a compulsory contribution to State revenue levied by the Government on workers’ income and business profits, or added to the cost of some goods, services, and transactions—something that we understand a tax to be. If we google “a levy” we see it is “a tax” or, in fact, both—the verb to impose a tax and the act of levying a tax. In fact, some dictionaries go on to say “Use the word ‘levy’ as you would use the word ‘tax’.” So there we go—it is all there, right here for you. We are happy to table it for you, John. It is one with pictures, so you will be fine; you will be good with that.

So what we now have is a levy that is a tax and a tax that is a levy, except that the Prime Minister does not think that they are the same. We are through the looking glass. This is what Humpty Dumpty told us: “When I use a word, it means just what I choose it to mean—neither more nor less.” John Key is through the looking glass with Humpty Dumpty, breaking the promise, breaking the—

💬 Hon Craig Foss: Come on, give us some poetry.

Poetry? You would not know a poem if you fell over it, Mr Foss.

This is a broken promise. That is what this is. It is not just a broken promise to the voters of New Zealand, who were told at the election by all the National candidates over there that there would be no new taxes; it is a broken promise to the airline industry. The board and airline representatives have made it quite clear that “National’s new tax”—they understand that—“breaches the understanding reached in 2003. Airlines already met the full costs of aviation safety and in return the Government met the costs of Customs. Under the deal the Government was to bear the costs of agricultural screening, which is deemed to be for the benefit of the primary industries.” It is a broken promise to New Zealanders; a broken promise to the airline industry.

But, of course, we all know that John Key is a straight-talking guy. If he went to a conference of a sector that was going to be deeply affected by something that was happening in the Budget—oh, I do not know—2 days after his speech, he might mention it to them. John Key goes to the Tourism Industry Association conference last week, and it slips his mind. Obviously there are a lot of things on his mind, but he fails to even mention it.

💬 Carmel Sepuloni: Slippery mind—that is why.

That is right—because he is indeed, Carmel Sepuloni, very, very slippery. It is a sneaky tax, it is a broken promise, and that is all that New Zealanders will see it as.

But it gets worse. As we look through the department disclosure statement—and I hate to break this to the Minister Nicky Wagner, who got up to give us the numbers before; we had 16, 20, and 22. Do I have any advance on 22—no, apparently not, according to the Minister. When we look at the department disclosure statement, it says, as it goes through, about the model of the levy: “[All of] this work will inform the final levy design, including the level of the levy.” So the level of the levy—which is a tax—will still now be part of the consultation process.

This is a bizarre situation. Here we are, at 20 past 7 on a Saturday night, apparently urgently passing this legislation to enable the imposition of this tax, and the final design of the tax—the level of the tax—is not even going to be worked out. It is off for consultation. It is like going to the city council to get a building consent and saying “We are pretty sure the house is going to have some walls, and we might put a roof on it, and there could be a floor but, look, we’ll work it out later. Just give us the consent now.” That is what the National Party is doing tonight. There are all sorts of questions about whom it will apply to, and will there be exemptions?

Here is a question for the National members: will there be exemptions? Will it apply to every person who crosses the border? There is silence—absolute silence. They have not got a clue whether this tax will apply to every person who comes across the border. Here is a question for you: would it have applied to Prince Harry? No one—no one; they have not got a clue. They do not know what this is about. They have come to this House with an ill-thought-out tax—

💬 Carmel Sepuloni: Will it apply to Gerry Brownlee?

Will it apply to Gerry Brownlee? He will sneak through, so it will not apply to him. Actually, someone called Gerry—his phone is on the desk, so I am not sure what happened there. He may have been a bit angry earlier on and ripped it off. Ring up Gerry Brownlee and find out whether this tax will apply to him. At the moment, what we are being asked to pass in this Parliament is a piece of legislation to impose a tax that the Government does not know how much it is going to be, to whom it will apply, how much it is going to cost to administer, and exactly who is going to administer it. It is a shambles.

💬 Chris Hipkins: But it is very urgent.

It is extremely urgent, but it is a complete shambles and it is a total broken promise, which symbolises everything about this Budget—a tax on travellers that is a broken promise, a property tax about which Bill English said today that he did not even know whether it would work; he is not too sure about that. These are broken promises, and a shambolic Budget. On this side of the House, in a second reading debate, we really should be debating now the contributions of all of the people who submitted at the select committee—the tourism industry, the airline industry, travellers—and we do not have their voices here today. For all of those reasons we cannot support this bill.

I will be very brief. I commiserate with Mr Smith; I would not want to be on Grant Robertson’s dinner plate.

Two very quick points: the levy will not put an impost on those who cannot afford to pay it. It is worth remembering that. The second point about this is that the levy also affords further protection to the income streams of rural and provincial New Zealand, thus boosting the potential for rural and provincial New Zealand to participate in or make a contribution to the Government’s growth targets. I have great pleasure in commending this bill to the House.

I rise to speak in the second reading of the Border Processing (Arrivals and Departures) Levy Bill. Following on from what the Labour members were saying, this shows a sad lack of process. We might be supporting the bill, but we think there is a very sad lack of process. We agree that there should have been submissions to a select committee, which would have added a much better context.

As we heard, importers might want to see a little bit of a fairer balance between their fees and the tourism industry, the fees on these people who will be coming in. I am wondering which one actually deserves to pay the most. We are hearing that it will be $16 probably—probably, but we do not know about the exemptions. It will be $16 out, maybe $6 in, and possibly $22—we do not know. For every importation, an importer pays $13.15 from 1 July, or, depending on another level, $17.37. It is pretty similar money. I am just wondering, if we had submissions and we had some very solid depth to this, we would understand which one was the riskier, which one should pay to get the balance right, if we are talking about biosecurity alone. I would like to know that.

I would like to know—probably from the Cabinet papers that we have not seen or the other papers that we have not seen yet—in terms of the real costings, where the risk lies and what the cost-benefit ratios of each would be. Under what sort of consultation will that happen? Consultation will not be that thorough, and it will not have that opportunity, from our previous experience.

I started on a story before about where the Minister is going with biosecurity. He said that it was his most important area. I believe him, actually. I think he is doing quite well in that area, but he will never do well enough if he is using 2008 figures, when National came into power and did these big cuts. It would appear that the Minister Nathan Guy has got us back, in dollar terms, to 2008. But 2008 was not good enough, either. Before that, in the previous Labour Government, we had didymo, the varroa mite, and a lot more. But our risks appear to be increasing. Of course, we have more tourists and we have more trade, and we need to go a lot, lot further.

The Minister has done some catching up. I want to know from the Minister what his real numbers are at the moment in terms of staff, and in terms of dogs. Some of the time he talks about new staff and new dogs, but we are still not up to those 2008 numbers, and the question is whether this Budget or this bill will help exceed those numbers, and ultimately exceed them significantly. Good on the Minister.

It is a real shame about the incursions that we got, and are still getting, because of the huge knock backs that happened following 2008. There is a whole range of different pests and diseases that have come in in recent times, and that have not been managed very well. Theileria is one that possibly came in with cattle; it may have come in with some other animal. Where is the tax for that one? Did Psa come in pollen? Did it come in a matchbox in somebody’s luggage? Was varroa on a bee in a matchbox in someone’s luggage? Didymo was probably on some fisherman tourist’s spongy boots, I would expect. Kauri dieback was probably brought in on machinery, but we do not know for sure. How did the Hadda beetle come in? We assume that the great white butterfly at Port Nelson came from the port; we assume it did not come with a tourist but we do not know. And what about Psyllid. All these have had massive costs to this economy and to this country.

A number of them are still here, with significant costs. They have come in because of inadequate biosecurity controls. Not only that, will this fund address the next stage—the clean ups, the dealing with those incursions? I doubt it.

They are finally getting on to the great white butterfly, thanks to the Minister, possibly listening to the Greens and others. The Department of Conservation was actually the one that really got it moving because the Ministry for Primary Industries did not, but, ultimately, between them it appears they may have got control. But at what huge cost was that, and what was the threat to both biodiversity and also the agricultural economy? The Theileria, which I mentioned before, is here for ever. How did this Government manage that? Absolutely woefully. MAF Biosecurity is underfunded. I do not think MAF Biosecurity staff are bad. I do not think they are incapable. I just think there are far too few of them and they keep getting mucked around and being told to do a new strategy. I think we are on the third new strategy within a decade—the third new strategy.

And then some of the pathways work that looks to be actually meaningful in getting there is getting some funding knocked off it. That Theileria is huge: it will be costing us hundreds of millions of dollars in the near years—what it has cost and what it will carry on costing in lost production. There is major lost production: the loss of cows being able to carry embryos, to conceive, other ones dying, ill thrift, lack of production—a massive cost. Varroa is still costing us and will continue to cost us. These things also mean we end up using pesticides that we do not need to be using in this country—if we were to stop these things at the border, or clean up absolutely immediately.

I mentioned the fruit fly earlier and that clean up. I visited the Auckland area several times to see how they were doing this, and how they were managing this fruit fly incursion. I believe that they did not have adequate advice. Again, the staff are pretty good, and I have met with some of them and had a briefing and understand what their logic was. They did not open up to enable further advice to do a better, quicker job and, as I heard from one of our fellow members over here before, the cost was something like 50 percent of turnover for some of the businesses. I watched the changes in that, and eventually we got some better systems in and businesses were able to trade a little bit more freely. But there are still impositions on business in that area, and no doubt there will be a lot more in spring again until we get the all clear. So the Greens will support this, but we want to see a lot more than this going into biosecurity and customs clearance. Thank you.

I am very pleased to rise to take a call in the second reading of the Border Processing (Arrivals and Departures) Levy Bill as it scurries its way urgently through the House. In the absence of a select committee process—or any other mechanism of public scrutiny, come to that—it appears that all we have left as a means for ascertaining the reasons behind this bill and for getting some kinds of answers out of the Government is this process of urgency. I have to say that I am a little hurt that Minister Wagner addressed everyone’s questions except mine. I am not taking it personally; it is just that I want to know why. Maybe they were questions that the Minister felt she could not answer. Maybe they cut too deeply to the heart of the matter. But, anyway, I am sure that the Minister will take the opportunity to address the concerns that we have as a party.

The first question I have is that we have been given an indication that this levy—fee, tax, whatever we want to call it—is going to be added on to the cost of tickets, and that will be tickets that are sold here going outwards and tickets that are purchased overseas coming inwards. What I want to know from the Government is: at what stage of the GST process does this levy get applied? Does this levy get applied before GST is added, or after? Is it, in fact, going to have GST on it as well, and is it going to be another tax upon a tax, in the same way that GST on rates is a tax on a tax? This is another case of what happens in terms of unintended consequences—or perhaps, actually, they are intended consequences—when due process is done away with and things happen in a hurry and there is not the time for reflection and contemplation and consideration and questions being asked and answered. Maybe this is one of these things that will just get sorted out later. If the Government does not want to make it a tax upon a tax and add GST on to the levy, well, then there is going to have to be a whole lot more administration involved, and that is going to raise the cost as well, so the value of the levy itself is going to fall—unless, of course, it does not mind adding a tax on a tax, but this we will find out, I suppose, at some stage in the future.

What is really starting to coalesce as being the centre point, I guess, of our difficulty with this bill is that we do not know whether this levy is intended to be additional funding for biosecurity or whether it is actually intended to just replace existing funding. Mr McKelvie, in his long, rambling speech of about 30 seconds, I think it was, spoke of a boost to biosecurity funding. But the Minister has consistently talked about cost recovery. Well, it is one or the other. You know, it is either an additional source of funding or it is a switch in funding from one source to another. I have a horrible suspicion—and it is growing on me all the time—that this levy, which is touted as being a boost and an increase for biosecurity, is, in fact, smoke and mirrors and that, actually, funding allocated to biosecurity will be flatlined and it is just the source of it that will change.

When you drill down through the mud of the Government’s Budget figures, it seems that all the appropriations relating to what used to be Vote Biosecurity and now appears to go by a number of different names are either flat or slightly reduced. There is a one-off capital injection to fund new X-ray machines—we see that. Whether that is actually funded by the levy or the tax or not remains to be seen. There is a mention of some additional staff, but that comes in some of the Government’s publicity material and not actually in the bill itself. Again, there is no clear indication as to whether the ongoing funding for these things—for the additional staff and for the X-ray machines—will be coming solely from the levy or partly from the levy, or whether the existing baseline funding from general taxation will continue or not and the levy will be on top. This we actually need to know.

Last year, I think it was, we passed the Airports (Cost Recovery for Processing of International Travellers) Bill. Airports where that levy applies will not also have the new levy. That, to my mind, adds weight to the idea that this levy—or tax, as is being suggested—is intended to be the primary source of funding for border inspection activities and not an additional source. Cargo inspection, as we know—containers and freight coming in—is already funded through levies and fees. But we also know that only about one in four, or only about 25 percent, of incoming shipping containers are actually inspected. I would like to see increases in this levy as well, if indeed the passenger funding is to be additional to existing revenue.

The Customs Service website advertises inspection fees for containers for the importation of personal household effects of $330 for a 20-foot container up to $480 for a 40-foot container, plus fumigation if necessary. That is for the likes of people migrating to New Zealand or New Zealanders who have been away coming home—their personal effects and so forth. So we know that all these containers are inspected because that fee is charged and paid and there is a devanning process. But the great majority of containers, general freight, are not inspected. There is an audit process where some are taken out or there will be a period of time or—

💬 Mr DEPUTY SPEAKER: Passenger levy.

Thank you, Mr Deputy Speaker. They are not inspected, there are not enough inspectors, and I am wondering whether any of this levy is to be directed to that sort of thing. We would actually like to see the levy extended for that. That is a large barn door that has been left open.

Our other primary concern is whether or not this levy is simply, in fact, a holiday tax. It gets back to my earlier questions around whether or not this is an additional stream of funding or a replacement stream of funding. I do not believe that the travelling public would mind too much about paying $16 on top of their air tickets to come into the country if that was going to contribute to additional safety in terms of making sure that New Zealand does not get diseases like foot-and-mouth, and so forth. We would certainly expect, and the New Zealand travelling public would certainly expect, that overseas travellers would pay that as well. The primary sector certainly expects that anyone, any person, who is a source of potential risk will pay their fair share. It is fairness and the relative fairness of who is expected to pay what that is at the heart of this matter. So we would like some clarity around that.

It is puzzling as to why we would be charging a $6 levy for people to leave the country. I know that the Minister has explained that this is to add to or cover the costs of customs for people on the way out. Customs and biosecurity, as we know, are two different things. But, again, it makes me suspicious that if we are going to charge a levy on passengers leaving the country, paying $6 towards the cost of running the Customs Service that, to me, says very loud and clear that, actually, this is a replacement source of revenue, not an additional source of revenue.

💬 Hon Nicky Wagner: This puts $4.7 million on for departures.

Well, I would love the Minister to stand up in the Committee stage and spell this out quite clearly. I want an assurance from the Minister that this levy is going to be on top of existing baseline taxation funding for biosecurity and customs, not instead of. There is just too much ambiguity about it. The way the Government is spinning this thing as being great and marvellous and wonderful and additional—maybe I am a naturally suspicious person, but it seems to me as if what we are going to wind up with at the end of this whole process is the same amount of money coming from a different place, and not actually an increase.

Actually, most of the bill is concerned with who collects the money and what trust accounts it goes in and what records need to be kept and what penalties will apply if these rules and conditions are broken. It actually does not say anything at all about what the money will be spent on, other than Government statements around funding for biosecurity, which itself is a welcome thing. The explanatory note states: “The objective of this Bill is to ensure that funding arrangements for MPI and Customs are sustainable and the costs associated with the delivery of those activities are borne by those who directly benefit from the activities or give rise to the risks.” I mean, costs being borne by those who directly benefit—

💬 Hon Nicky Wagner: That’s what a levy is.

Well, in terms of customs, Minister, I do not understand that, because, arguably, the only direct beneficiary from a customs inspection would be the Customs Service itself. Although the entire nation benefits from biosecurity inspections, the primary sector could, arguably, be called the primary beneficiary from biosecurity, but it is not being targeted by the levy at all. I am not saying that it should carry more of the cost—the primary sector pays tax, and tax currently pays for biosecurity—but it is a direct beneficiary and yet this levy appears to be targeting a group that is not a direct beneficiary, which, again, is confusing.

The descriptions in the bill itself talk about functions—OK, I guess “functions” can mean anything. We would like a bit of that spelt out a bit more clearly. I have another question: do cruise ship passengers get to pay the exit and entry levies four times over if, for example, their cruise ship stops in Auckland and in Wellington and in Lyttelton and at Port Chalmers? Because if the ship goes outside the 12 mile limit, arguably the passenger has left New Zealand and then come back in again and gone out and come back in and gone out and come back in. Do they get stung with a fee every time they leave and every time they arrive again? Why have we not been told these things?

Again, there is no mention of whether or not this additional or altered source of funding is going to be used to reinstate 100 percent screening of all incoming passengers’ luggage, mail, and freight. This is something we are quite hot on. It is something that will actually make a material difference. Rearranging the beans into different-sized heaps before you count them does not actually increase the number of beans. Again, we have—

💬 Hon Member: What does Jack think?

—questions that are—Jack and the Beanstalk—

I am sorry to interrupt the member, but his time has expired.

It is with great pleasure that I commend the Border Processing (Arrivals and Departures) Levy Bill to the House. Thank you.

I call James Shaw—5 minutes.

I have got a couple of questions that I would like a response from the Government side about, one of which is the question of the money. There were three press releases relating to the levy, and there is a question about whether this replaces existing money or whether it is actually new money. One of the press releases was talking about how biosecurity funding will be boosted by $24.9 million over 4 years, plus $2 million of capital funding. A second press release talked about how the Customs Service would receive a $4.7 million operating funding increase. The general release about the airport tax said that the Ministry for Primary Industries and Customs Service currently spend about $100 million a year and that the airport tax is expected to raise about $100 million a year. That would imply that the new airport tax would raise an equivalent amount to what is currently being spent.

I just wanted to check with the Government. The $24.9 million boost over 4 years and then the $2 million capital funding for biosecurity—does that come out of the $100 million—

💬 Hon Nicky Wagner: No.

—or is it additional? And the same with the $4.7 million—is that out of the $100 million or is that actually new money?

💬 Hon Nicky Wagner: New money.

OK.

And then the second question was around the Customs Service press release. This is relating to the privacy concern that we flagged in my first reading speech. I just wanted to read it and then get a response. “ ‘The officers will use the targeting techniques that Customs currently applies to arriving international passengers to identify departing passengers of interest who are unknown to security agencies or not on an international watch list,’ Ms Wagner says. ‘Customs officers will take appropriate action at the border before a person of interest leaves the country. This could include stopping them for questioning or alerting other authorities in New Zealand or abroad. Extended-risk screening for departures will complement the existing automated and face-to-face passport checks, and the alert system already in place, and will provide an additional source of intelligence. The aim is to counter potential terrorist activity, maintain New Zealand’s low risk status and contribute to international efforts to combat terrorism,’ Ms Wagner says.”

From a Green Party perspective, we have a pretty strong civil liberties kind of strain in the Green Party, and some of that language there flags some concerns. So I would like it if, at some point during the course of the debate, the Minister would not mind just saying a little bit more about that and describing any new technologies or any risks analyses that have been done on what the implications are for personal privacy and security.

And then the one, I guess, that everybody is waiting for. In the Ministry for Primary Industries release it does mention that it will be “Expanding our biosecurity detector dog capacity”—I am speaking to particular constituents here, obviously—“to manage risk at the border.” The Government has made a great deal about the number of people who are returning home from Australia. I just wanted to check whether those dogs are going to be beagles or alsatians, because I think beagles will be a great deal more attractive and bring more people back home.

💬 Hon Nicky Wagner: Labs. Customs likes labs.

OK. Thank you.

I call Kris Faafoi—5 minutes.

Thank you very much for the opportunity to speak briefly to the Border Processing (Arrivals and Departures) Levy Bill. I believe that the questions just posed by the Green member of Parliament James Shaw are good ones. The time of this Parliament would not be being taken up asking these questions if this piece of legislation had followed the normal process. If we had the select committee process, this piece of legislation would have gone to either the Primary Production Committee or perhaps the Foreign Affairs, Defence and Trade Committee, and these really basic questions could have been answered. But, no, we are here at 11 minutes to 8 on a Saturday night.

I know that some of the members across the other side of the House do not want to be here, but it is their own fault. It is their own fault, because this did not have to be rushed through this Parliament under urgency. Some of the very basic questions that Mr Shaw is asking could have been answered. The process has been completely backwards, and that is plain to see in the departmental disclosure report, where a simple question was asked: “Were any regulatory impact statements provided to inform the policy decisions that led to this Bill?”. Usually, that is something that is basic and is on the table for us so we can get answers to some of these simple questions that Mr Shaw has asked, that Mr Prosser has asked, that members from the Labour Party have asked. But the answer to that question is no.

It is quite surprising that we have got to this stage—we are into the second reading of this bill—and a departmental report says: “A Regulatory Impact Statement (RIS) was not prepared in support of the decision to implement the policy. However, the regulatory impact of imposing a levy”—that is the Government’s spin—“and alternative options was set out … in the Cabinet paper proposing its introduction. A consultation RIS will be prepared and submitted for consideration by Cabinet when approval is sought in late May”—in about a week or so, well after this piece of legislation is going to be passed. You know, this is just not good enough. If this Government wants to introduce a new tax, a travel tax on New Zealanders, put it through the wringer, through the scrutiny of a select committee. But, no, it did not warn anyone. It said there would be no new taxes. So to try to get away and sweep this under the carpet, the Government puts this legislation under urgency at 10 to 8 while it thinks people are watching the Hurricanes beat the Blues.

I will come to a conclusion soon, but I would just like to also make a plea to members on my side of the House: take it easy on Stuart Smith. He is a new member to the House, it is his first urgency, he is a bit tired, he has had a hard week, he let his guard down, and he got caught out telling the truth. Let us forgive him. Let us forgive him for that, because he only confirmed what we already know: this is not a levy; in fact, it is a tax. It is not the first time that the Government has used this urgency to bring in another tax. The telecommunications development levy was also a tax, and this is also a tax. Let us forgive Stuart Smith. Forgive him. But we cannot forgive Nicky Wagner. She is the Minister. She is the Minister and she let it out, also, that this is a tax. A tax is a tax is a tax.

The Prime Minister says that this tax will not make a blind bit of difference, but I do not think that is necessarily the case, because what did the Tourism Export Council’s chief executive, Lesley Immink, I think it is—I hope I have pronounced that correctly—say a couple of days after the Prime Minister spoke to its conference? She said: “Clear surprise is the first reaction that there was no discussion with either the inbound or outbound tourism agencies in New Zealand and the implications for the traveller.” Mr Key went along and spoke to them but did not bother telling them. What is the go there?

Mr Chair, the Prime Minister also posed a pretty simple question—Mr Speaker, sorry. I have got the jitters from the Committee stage, sorry, Mr Speaker. The Prime Minister posed a pretty simple question. Is it a levy or is it a tax? He said: “Go google it.” We googled it. It is a tax—end of story.

An additional $100 million to protect the biosecurity of New Zealand—an extra $100 million to protect the economy of this country—and, ladies and gentlemen, Labour is voting against it. Labour is voting against an additional extra $100 million to protect jobs in the region and to protect our economy. Do Labour members agree that the increase in the numbers of visitors to our country means that biosecurity risks are ever increasing? Do they agree with that? I certainly hope so, because the Labour Party policy on biosecurity says exactly that.

This levy will help to boost the capability of the biosecurity system to identify offshore threats to the many and varied production sectors across primary industries, such as porcine reproductive and respiratory syndrome and foot-and-mouth disease. This additional $100 million will protect our nation, our country, our jobs, our regions, and our biosecurity. That is what that will achieve.

Labour members are actually voting against their own policy, which is on their own website. I actually think that originally they were going to vote for this. I do worry deeply. Thank you to the Greens for their support, even though they had many questions. My only concern about this is that perhaps we have done something a little bit wrong because we have got support from the Greens. But maybe, just maybe, this is the new beginning. Congratulations—perhaps I am a bit early—on this new, sensible approach of the Greens in dealing with sensible policies from this fine National Government. Is this the beginning of the blue-green revolution, Mr Shaw? Perhaps it might well be.

Jobs in the regions, jobs across New Zealand—it just shows how out of touch Labour is with the regions. It is voting against an additional $100 million to protect biosecurity, to protect our land-based industries, and to protect jobs. Labour is no longer the party of the workers; National has always been. Once again, this additional $100 million to protect regional jobs is a fine worker-friendly and job-friendly policy of this fine National Government. I commend this fine bill to the House.

About the only impact that speech by Craig Foss made on this particular debate was to destroy James Shaw’s chances of becoming the next co-leader of the National Party—of the Green Party. He could well become the next co-leader of the National Party too.

Craig Foss rants and raves about the extra $100 million to protect biosecurity that this new tax that National is introducing is going to raise. What he did not say was that the National Government cut funding from biosecurity in the first place. This new tax it is introducing is to restore cuts that it made before and to restore funding for things that were previously funded out of general taxation. Now it is introducing extra taxes to pay for something that it cut previously. That is what this Government is all about.

I want to talk about this picture, of course. “No new taxes”, John Key and Bill English went around the country promising New Zealanders at the last election. But, actually, there was another part of this that is very important. Look at the little bubble above that. It says “A strong economy means no new taxes.” So which bit did they break? Which promise did they break?

💬 Rino Tirikatene: All of them.

All of them, probably—both of them. National is delivering a new tax, so it has clearly broken that promise. “A strong economy”—it has not delivered on that one either. It has broken that promise too. This is a Government that is breaking all of its pre-election promises. “No new taxes”—that is not true. This is the third of three new taxes introduced in this Budget alone. It is National’s first Budget since the election, and it is the first set of broken promises. Of course, we know National Party members cannot be trusted at their word. Let us just go back to just on a year ago, when John Key flew to the UK—at the taxpayers’ expense, without paying this tax on the way in or the way out—to encourage them to remove the taxes that they have on Kiwi passengers going in and out of the UK.

💬 Hon Annette King: He called them taxes.

He called them taxes. “Prime Minister and tourism Minister, John Key, has welcomed the British Government’s decision to reduce taxes for passenger flights to New Zealand. ‘I have consistently advocated for such a change,’ John Key said ‘which will benefit travelling New Zealanders and encourage more tourists to come to New Zealand.’ ”

So only a year ago, John Key was arguing that another Government should be reducing its taxes to encourage people to come to New Zealand. And how has he responded in kind? By whacking our own taxes up on them in this year’s Budget. Of course, we do not know how much that is going to be. Of course, the tax changes that were made in the UK, which were welcomed by the New Zealand Government, reduced the cost to the travelling public of about $50. We do not know how much this levy is going to be. First, we were told it was only going to be about $16. Then we were told it was only going to be about $20. Then we were told it was only going to be only about $22. That is all in the space of a couple of hours. I tell you what, the longer this debate goes—it will get to fifty bucks before midnight at the rate that the Government is going on that side of the House.

When the Government said that there were going to be no new taxes, why did it not tell New Zealanders that there were a whole lot of riders on that? It was just going to try to call them something else and pretend they were not actually taxes. The Government can dress it up as a “levy” but it is actually a tax. As for the reassurances that “Oh, this is a levy. It is going to be ring-fenced. It is going to go into a fund. It is not about ensuring that the Government gets back into surplus. There are no implications for that whatsoever.”, that is, of course, what people in Governments have been arguing for years about ACC, and yet the Government has kept ACC levies high—artificially high—in order to try to create the illusion of a Government surplus when we know that it is not going to be able to deliver one. It is certainly not going to deliver one this year, and it is highly unlikely it is going to be able to deliver one next year, because we know that Treasury has said that unless the price of milk rebounds, the surplus next year is in doubt as well.

So we get the Government saying that this is not a new tax. We know the Oxford English Dictionary describes a levy as a “tax raised by levying”—a tax raised by levying. So it is a little bit like John Key’s promise that he was not going to increase GST. He will probably argue that was not a tax either, but he increased GST, despite making a specific promise down the barrel of the camera that he was not going to raise GST, and he did exactly that. So who is this new levy going to apply to? Is it going to apply to everybody travelling across the border in New Zealand? Will there be any exemptions? What about the people who barge their way through security without going through the appropriate channels? Will this apply to Gerry Brownlee? Gerry Brownlee bypasses security. Pick up the phone that he has broken off the desk and give him a call. Will Gerry Brownlee pay this particular levy? Will all of the people coming to New Zealand pay this levy? How can the current Government be trusted to give factual information on that?

This is yet another broken promise by this National Government, and it is barely beginning this term in Government. New Zealanders can expect many more broken promises from the National Government, and I am sure that is what we are going to see because this Government really has no major plan or vision for the future of this country. It is tinkering around the edges. It is dealing with little bits here and there, but it is not dealing with the big issues that are actually going to result in New Zealanders earning better incomes, having better jobs, being able to afford houses, and having a higher standard of living. That is not what the Government is dealing with and trying to deliver in this Budget because it does not know how. It has not got any new ideas, it does not have a vision for the brighter future that it has promised New Zealanders, and even if it did have the goal of delivering its brighter future, it just has no idea how to do it.

I commend this Border Processing (Arrivals and Departures) Levy Bill to the House. Thank you.

I raise a point of order, Mr Speaker. I have reason to believe that the previous speaker read her speech from her notes, in contravention of the Standing Orders.

Humorous, but not a point of order.