Border Processing (Arrivals and Departures) Levy Bill

This, of course, is now a wide-ranging debate because we can cover absolutely everything that is in the bill in one job lot. The first thing that I wanted to say to the members opposite is we are voting against this bill because it is a nasty, sneaky little tax that has been brought into this House with no consultation with the very industry bodies that are affected by it. That is not good policy-making.

I want to go back to trust, because in 2003 the Government, in conjunction with the airline industry and the tourism industry, decided on an agreement. It was agreed that the airline industry would be responsible for aviation safety because it benefited airlines and passengers, and the Government would pay for customs and for agricultural screening because it was of benefit to the public and to primary industries.

The first question to the Minister in the chair is: did he go and consult with the industries that were part of that agreement that was made in 2003? Did he go and speak to the airline industry and to the tourism industry before he had work done on this bill, before this bill was brought before this Parliament? When did that consultation take place? Did he say to those in the industry: “I am going to break an agreement that was made in 2003.”, an agreement that the industry would pay for the aviation safety costs, and that the Government would pay for agriculture and customs costs? I want to know, if the Minister did not consult, what right he has got to come into this Parliament and override an agreement that was made between the Government, the airlines, and also the tourism industry. You see, when you treat such agreements in such a cavalier way, there cannot be trust in a Government. You cannot believe what it is going to do and what it is going to say. So, Minister, when did that consultation—if there was any consultation—take place? Were they warned that you wanted to bring in a tax that was going to have to be added to the fares of the passengers travelling?

The next question I want to ask the Minister is: why was there no regulatory impact statement prepared for this bill? We have got the department’s disclosure statement. It is dated 10 May, and it shows that it was done 11 days before the Budget. It also shows that no review or evaluation had been done on this policy. There is no regulatory impact statement, but it does say that there is going to be consultation around a regulatory impact statement later on. Why, Minister, is there not a regulatory impact statement on the Table of this House so that the members of this Parliament could look at the musings that went on when you were deciding to put a tax on New Zealanders, which will be paid by New Zealanders, but one that I do not believe was ever consulted on with the industries? When will we receive this public consultation document?

We are told that there is going to be a public consultation document with a final design in October 2015, so when is it going to be available for, perhaps, this House to have a look at—well, at least for the industry to have a look at? Maybe the public would want to have a look at it because, after all, they are given no input into this bill at all. There are no submissions on this bill. It was just slam, bam, here it is—another tax. There was no ability to be able to have a say on it at all. So, Minister, the consultation document, or the regulatory impact analysis—when will that be available to sit on the floor of this House, and when will we get to debate that?

What we are seeing here is a Government that wants us to pass, under urgency tonight, legislation without the detail, and I am surprised that the Green Party would be voting for something that it does not know the detail of. Those members are putting their trust in a Government that has already welshed on a deal with the airline industry and the tourism industry. Why would any party put its trust in a Government that has not honoured an agreement that has been in place since 2003? We were all told: “Just trust the Government. It is going to give us the details later on.” We are not even sure that it will be the levy that we are being told about tonight. It may or may not be $22. I suspect that, as they work on the detail and the design of this, maybe there are a few other things that will creep in—“Oh no, we didn’t mean $22. It has just gone up to $27. No, no, maybe it’s $35.” Why should we trust a Government that could not honour an agreement that it made?

I would like to see the Regulations Review Committee look at the design of these taxes after the Government has finalised what they are going to be. I would like that committee to see whether, in fact, this is a levy or a tax that is actually doing what they say it is going to do, and the right amount of money has been taxed and levied against New Zealanders. I think we ought to insist that the Regulations Review Committee look at this. This is setting a levy tax. We have had no consultation with the public. We do not know whether it actually does cover the costs. We are told that by 2016-17 we are going to have $80 million gathered from it, and we are told it goes into a trust account and therefore cannot be used for anything else. Well, as we said, what happened to ACC? What happened to ACC? That is a dedicated levy that goes to an organisation that can spend on virtually what it likes. Why should we believe the Government when it comes to this?

I believe that this Government has been incredibly sneaky with this bill. It has brought it in without talking to the industry. The Government’s own Prime Minister, who is the Minister of Tourism, was two-faced to his own industry. He went to a conference and he did not tell them he was going to do this. Was it on your advice, Minister, that he did not tell them this is what was going to happen?

I would like the Minister to now get on his feet and explain to this Committee whether the Government consulted with the industry before it did this. Has the Government discussed with the industry the agreement that was made in 2003? When are we going to get to look at what is going to be the design and the shape of this so-called tax levy? When is this House going to be able to scrutinise that? Is the Minister prepared for it to go to the Regulations Review Committee to see whether it can determine that this is a tax that has been properly imposed on New Zealanders? None of that has been answered tonight. I agree with Mr Prosser. There is so much missing that any party would be idiots to vote for this, on trust, from this Government.

I rise to take just a short call on the Border Processing (Arrivals and Departures) Levy Bill. We heard a lot during the first and second reading speeches that, obviously from the Government’s perspective, this was such an important issue for it that it wanted to put in place this levy to ensure that there was adequate funding to provide protections at our border controls. My question would be: how have we done that until now? Up until now, how have we ensured that we have adequate border protections? We have done it without this levy/tax until this moment in time. This idea that this demonstrates what a priority it is for the Government really defies belief. It has been a priority of Governments in the past, without a levy. That is not a justification for introducing something like this.

My second question is that, surely, if this was as important as the Government claims, then we would have more detail in this bill than we do right now. If it was such a priority, why have we got this shallow framework of a bill, rather than the detail that we would usually have in this Chamber when considering such legislation? So I really question whether it is the priority that the Government claims.

I also wanted to come to clause 5, which inserts new section 140AA. That provides that every traveller who arrives in New Zealand on or after 1 January 2016 is liable to pay a levy. So that is basically the part that says the individual liability is on the traveller. I heard one of the speakers on the other side of the Chamber claim that another rationale for us having to introduce this levy is that we have got more passengers coming here. We have got more passengers; therefore we should make those individual passengers pick up this tax or levy. But the question that arose for me, when hearing that, is that, actually, the risk has always been there. Regardless of the size of the population coming into your country, the risk has always existed.

Nicky Wagner is shaking her head. I have just one reference to make to you—Grey Lynn fruit fly. That came in before a levy; that came in with the number of passengers we happened to have coming through at that time. Your risk exists around whether or not you have got proper processes in place to stop that from happening in the first place. If this bill is an admission that to date we have not had proper processes in place, because we have not been able to fund them, that is a different story. But I have not heard that admission from the Government yet. My argument is that it is not about scale; it is about whether or not you are properly resourcing your people to do the job.

We have long had a concern on this side of the Chamber that we have not been properly resourcing our border control staff to carry out the functions we require of them, otherwise why would we have had such a massive economic threat to our horticultural sector, such as we have seen in the past couple of months? We cannot afford something like the fruit fly. It is the Queensland fruit fly; I called it the Grey Lynn fruit fly. It is the Queensland fruit fly, which has found a new cosy environment in Grey Lynn. People have recently asked me whether or not we have got rid of that problem. The answer is no. Things have gone very quiet. That is only because the fruit fly is in hibernation. It is absolutely still a risk to our economy as a whole, and one that was a massive wake-up call. We should not be reliant solely on introducing, at the last minute, these kinds of measures as being the mechanism for ensuring we have proper border controls in biosecurity.

We know there has been a loss of experience in the Ministry for Primary Industries. We know that that has been a problem across the board. It has been something that Labour has continually raised, and we raise it again here tonight.

The second issue I want to raise is really covered by Part 2 of the bill, and that is the amount of auditing that is going to have to go on, and the amount of scrutiny over whether or not the levy is being recorded properly. Who is going to follow up on that? Is that another job? How much red tape and bureaucracy is being created by this bill? What will the costs of enforcement and that auditing be? I think it is a fine question to ask of the Government, which purports to be a Government against red tape. It certainly introduces a lot of it. What is the cost of enforcing this bill? It is hard to know because of all the lack of detail, but we certainly see that there are auditing requirements. Everyone is required to keep statements, accounts, and records. Who is going to enforce that? Those are some questions. I would love to hear answers from the Minister in the chair, Nathan Guy, if he would like to respond to me. Thank you.

I would like to start by addressing some of the points raised by Craig Foss. He was saying that Labour is voting against $100 million of extra funding, which does seem to contradict the press release that was put out saying that the current spend at the border is about $100 million and that this new tax would raise about $100 million. Is he saying that, in fact, costs are going to inflate to $200 million and that this new tax covers $100 million of that? I am assuming that he misspoke, as he did about a number of things during his speech, and that this is, in fact, just covering the additional $100 million that is currently being spent.

Secondly, related to that, as I understand it, the $4.7 million operating funding that is going to the Customs Service, the $24.9 million over 4 years going to Biosecurity New Zealand, and the $2 million capital funding going to Biosecurity New Zealand is on top of the $100 million that is currently being spent. Does that mean, therefore, that the $100 million revenue that is expected to be raised by this new tax will not actually cover the full costs? The current costs are about $100 million, and then if we add that $30 million - odd, that means that the spend will go up to just over $130 million and the tax is expected to raise $100 million. So I just wanted to clarify whether this new tax is expected to cover all expenses or just current expenses. Where is the additional funding coming from, if it is not?

Thirdly, I just wanted to gently remind the Labour Party and Annette King—she says that Labour will not be voting with the Government on the bill tonight—that a few weeks back Labour voted with the Government on the Remuneration Authority (Members of Parliament Remuneration) Amendment Act. This is legislation that contained a fairly complex piece of algebra that literally no one who voted for it understood, and members completely took it on faith that it would do roughly what the Government said it would, despite the Government not actually being able to provide any kind of information about it actually doing what it was intended to do. So this kind of thing, it seems, happens a fair bit around here, but thank you for the point.

I wanted to speak particularly—given that we are taking this bill as one question—to clause 1, the title clause: “This Act is the Border Processing (Arrivals and Departures) Levy Act 2015.” Just to pick up a theme from earlier, we might want to consider some other options, because the dictionary definition of a “tax” is a “compulsory payment to Government to raise revenue, levied on income, property, or goods and services”—and the service may include entering or leaving the country, and getting your underwear patted down while you are doing it, depending on whether you see that as a service. Some other words that we might want to use here in addition to “tax” or “levy” are “tariff”, “toll”, “excise”, “duty”, “fee”, “imposition”, “impost”, “exaction”, “assessment”, “tithe”, or “payment”—the point being, I think, that the argument about whether to call it a levy or a tax is, frankly, redundant. In broad category terms it is a tax, and we should move on to whether we think this is of any substance.

In terms of the argument about no new taxes and whether this is a broken promise, and so on, I think it is a fair one to have if the Government said going into an election that it would raise no new taxes and then it raised new taxes. Then you could argue that it won the election on false pretences, along with things like running a surplus and so on. But the attacks on the Government for raising this additional form of revenue do buy into the narrative that a Government raising revenue to cover its costs is somehow a bad thing. Actually, it is not all the time. There are times when we need to do this to cover our costs, and, as I said in an earlier speech, when the Government cut the tax rate for high-income earners it actually meant that revenue was going to be running below costs for many years to come, when it could have actually been running a surplus ever since. So in terms of—[Bell rung]

The CHAIRPERSON (Hon Trevor Mallard): James Shaw.

I will not take too much of your time, Mr Chair. I will just complete the thought on the narrative around whether taxes are good or bad or anything else. The reason the Greens are supporting this one is that we feel it is actually a good one, because it locates the cost with the users. It is transparent and it increases accountability, because, rather than being funded out of general taxation, it means that the revenue can rise and fall along with passenger numbers. So the cost is directly related to the activity, and it means that transparency around this is greater. So if we are going to be raising new taxes, to us this looks like a good one, and so we will continue to support it.

Aside from the process issues, which are shocking—generally the Greens are against pushing things through under urgency that are not urgent, and this does not seem in any way urgent—we are in favour of this bill. We have not seen any real, substantial arguments as to why we should not pursue this course of action. But we do want some answers to those questions about whether this is $100 million worth of new funding or additional funding, and then, if the new funding that was announced in those press releases is on top of that $100 million, whether that means that this tax itself is not covering the full cost of border security, the Customs Service, and biosecurity. Thank you.

I want to pick up where my colleague Mr Shaw has left off. I was not going to wade into the debate about whether this measure is a levy or a tax, because, actually, I think it is irrelevant, and, as Labour members and others have gone into in quite some detail, when you look in the various dictionaries, online and otherwise, and google them, it seems that the one is the other and the other is the one. So what it is called does not actually matter. It is significant, though, if we look at the departmental disclosure statement, at page 9. Part 4.2, about significant legislative features, asks “Does this Bill create or amend a power to impose a fee, levy or charge in the nature of a tax?”, and the answer given is no. The explanation is that “The levy is not proposed to be greater than cost recovery and there will be a clear relation to the costs of the functions performed. The funds collected will be held in a Trust Account to be used solely for funding the cost of the levied services. Given this, officials consider the levy is not in the nature of a tax.”

So whether it is regarded as a tax or a levy—and there is obviously some difference in the mind of the Government, or, at least, in the minds of the officials who drafted this particular statement—it raises a question that goes back to a theme that I have raised in earlier stages of this debate. When we say that the funds collected will be held in a trust account, if we, by a little stretch, presume that the consolidated account, for example, is a trust account—because in a manner it is—to be used solely for funding the cost of the levied services, one would presume, or I guess one could be forgiven for presuming, that the purpose of a Government raising tax at all, or raising revenue at all, through whatever means, would be to fund the cost of levied services. In other words, the things that the Government does, it has to raise money for, and I do not see that there is a difference in that regard between money being raised for a purpose specific to government and money being raised by a Government specific to a purpose.

What it does get back to—and this is the point I have been making, and the one that Mr Shaw picked up on as well—is whether or not the $100 million that this levy, tax, fee, or whatever is intended to raise is going to be additional to baseline funding for biosecurity as it currently exists or not. This is fundamental to our support, or lack of it, for this bill. If we are talking about $100 million extra, going on top of what we currently spend on biosecurity, we are all for that, and that will swing us around. We will come in behind it and say: “Good on you, Minister.” The Minister has made a point, over his time as the Minister for Primary Industries, of saying that biosecurity is his No. 1 priority. We absolutely support him on that, and in fairness I think he is genuine in that. He may struggle at times, I think, to extract a sufficient degree of priority out of his Cabinet colleagues for the primary sector because their focus may be on other areas, but I think he is genuine in wanting to improve the level of biosecurity. We may disagree on the methodology by which that is achieved and the processes he intends to go through, but doubling the budget for biosecurity would make an enormous difference to whether or not New Zealand First could support this bill. I think it really does require some absolute clarity as to whether or not this levy—it is a new levy—is going to provide an additional stream of funding for biosecurity or whether it is going to replace the current stream of funding for biosecurity.

Again, I come back to the point the Minister of Customs made earlier when talking about cost recovery, whereas Minister Foss and Mr McKelvie have talked about boosts. Either it is a boost or it is a cost recovery. It is one or the other. So we are talking about either another $100 million or the same $100 million coming from somewhere else. That is really quite crucial.

💬 Hon Annette King: Extra.

I know, yes. People have said “extra”, and other people have said “cost recovery”. So it is one or the other. I wonder whether, perhaps, then—if we want to go back to the title of the bill—we could say that it should be called the “Border Processing (Arrivals and Departures) Additional Levy Bill”. That would clarify it completely, saying whether this is additional funding or not.

I also want to ask another question, and I am certainly hoping that some Government members are going to rise and take calls in this stage of the debate. Perhaps they are just leaving it for the Minister, or Ministers, at the end. If this measure is simply cost recovery and we look at some of the, perhaps, fringe pathways through which people and goods and so forth come into New Zealand, we know that about 95 percent of incoming passengers are airline passengers, about 4 percent are cruise ship passengers, and the other 1 percent are yachts, private jets, military personnel, and so forth—and never mind that there are diplomatic visitors and so forth, guests of the Government, who, we already know from prior Government statements, will be exempt, because it is not appropriate to charge guests of the Government money to come in. But if we are talking solely about cost recovery, then I cannot see that it is feasible in any way to imagine that for $16 a person it warrants sending an inspector up to, say, Ōpua in the Bay of Islands to inspect the crew of a yacht coming in. It cannot materially or physically be possible to adequately inspect a number of people coming in on a yacht, and that yacht itself, at $16 a head. So that in itself begs the question: if the levy is not sufficient for these sorts of things, is it going to be topped up from general Government funding? And if that is going to be the case, is that going to be across the board? Can we please have some clarification from the Minister, or from one of the Government members, as to whether or not that is going to be the case. Thank you.

This is a great opportunity to take a call on this very important bill that we are debating this evening. Thank you very much for the contributions that I have heard this afternoon and this evening in the first and second readings and now in the Committee stage.

It is interesting to put some balance into this, because there has been quite a focus from the left about how this is going to really harm the tourism industry. I think they have not done their research well enough. It is interesting that some of the comments that I have read are that the tourism industry in 2013 indicated that it was not opposed to a border levy. This issue has been around for quite a period of time—in fact, Labour even considered it when it was in Government. What is also interesting is that the Flight Centre Managing Director, Chris Greive, said: “So long as there are real benefits for our customers and the additional fees are spent on ensuring the customer experience is as best it can be, through keeping border processes updated and investing in improvements, then we would not see these new charges as a negative.”

💬 Hon Annette King: Did you consult them?

So I did not hear that from Annette King. I did not hear that. All I heard was rhetoric from Annette King. There is no balance in Labour’s argument this evening.

What is also missing in its rhetoric are other public comments—other public comments that I have seen that Annette King might be interested in. The chairman of Kiwifruit Vine Health says it is both logical and sensible to implement a passenger surcharge that will go a long way to futureproof the cost of New Zealand’s biosecurity system, currently borne by New Zealand taxpayers. That was from Kiwifruit Vine Health chairman Peter Ombler. Annette King did not make any comments about that.

I also want to quote the Dairy Companies Association of New Zealand, which thanked “the Government for its commitment to responding to the changes which are altering New Zealand’s biosecurity risk profile … DCANZ is encouraging the public to see this levy within the bigger picture of biosecurity for New Zealand … Biosecurity is not just concern for primary industry; the introduction of didymo ‘rock snot’ has permanently altered many waterways and affected recreation activities.” So it is interesting that the Dairy Companies Association of New Zealand is straight away not only talking about biosecurity but moving into biodiversity and the fact that if we do not strengthen our borders with an increase of volume and risk, then our tourism industry is going to be affected. Annette King has not acknowledged that in 2001, when the UK had foot-and-mouth disease, it affected their tourism industry by about NZ$15 billion.

What is also interesting are other comments I want to bring to the attention of the Committee from Horticulture New Zealand. What the Horticulture New Zealand president said was: “The good thing about this levy is that as the number of visitors increases, so will the revenue it generates, to cover the increased cost of processing passengers and the risk they represent.” The Horticulture New Zealand president goes on to say that the suggested levy “is still a long way off the $58 charged by Australia, a country with similar biosecurity requirements to our own”. So on the one hand we have the primary industry saying: “Good on the Government for bringing this in.”, and actually one of them is saying it should be even higher. We also have a departmental disclosure statement on the Table tonight, which some members have referred to, that says that the impacts on visitors are going to be low. Yes, we have got a regulatory impact statement that is going to go out with the discussion document, and that will answer Annette King’s questions. That document we propose to be out in June.

Also Annette King has raised—I am not sure whether it is mythical or not—this 2003 agreement. I have asked my officials to have a look and see what they can find on this agreement. They cannot actually find anything official about this agreement. What I would say is that time has moved on from 2003. Our visitor numbers are growing. Our risk profile is also increasing. This is about fairness. This is about 2015. This is about passenger numbers forecast to grow at 4 percent a year for the next 6 years. This is about focusing on risk passengers. Also, can I clear up another point that has been made—

💬 Hon Annette King: And they bring nothing to New Zealand. No benefit to New Zealand—$10 billion.

If Annette King would give me a moment, I will try to clear it up for her. She might be interested. This is about a levy. Over the next 3 years or so it is going to generate about $100 million to $105 million for biosecurity, run by the Ministry for Primary Industries and the Customs Service. Currently, that is funded by the taxpayer. We believe it is fairer that those who are utilising those services—55 percent of those are foreigners—should pay for the use of those services. As our volumes increase by what I have said—estimated to be 4 percent, maybe 5 percent a year looking out—that money will come in with that passenger. So to put it another way, as more people come into New Zealand from overseas, the funding will follow them. That means that our services will be able to continually improve and be bolstered.

Can I clear up another point for Mr Shaw, who has made, I think, a very good contribution to the debate this afternoon and this evening. Mr Shaw gets it. He gets it. He realises that this levy is about strengthening the biosecurity system. Mr Shaw gets it, because he knows that if we have a biosecurity incursion it affects our tourism industry. Mr Shaw also gets the fact that it could have an impact on biodiversity.

Mr Shaw has raised another comment that I want to clarify, and that is about the money that has been allocated in Budget 2015 for the Customs Service and the Ministry for Primary Industries, which equals about $30 million. That is going to be focused in the next 4 years on further strengthening the biosecurity and customs systems. That is extra money that I have been able to get out of the Government from the taxpayer to further strengthen the biosecurity system. That is going to be focused on more detector dogs, more X-ray machines, more audits of our import health standards, and more visits to offshore countries where we bring produce and trade from, to check that they are following and adhering to the import health standards. So this is more money. This is a significant investment in the biosecurity system.

My challenge to New Zealand First, which wants to run around the regions of New Zealand and say that it is the regional party, is to get on board with this legislation—get on board and support it. The primary industries, Mr Prosser, are backing this. The primary industries realise that more needs to be done. They realise that this is about fairness. So as volumes grow, the money will increase. That means more of a focus on the biosecurity passenger system.

The other important thing in this debate is to realise that this money goes into a trust account—a memorandum account. It must be spent—it must be spent—through the Ministry for Primary Industries, Biosecurity New Zealand, and the Customs Service on the passenger pathway. That is an important point to make this evening in the debate.

So, in conclusion, I support this bill. It is about fairness. It is about a growing volume of passengers coming across our border. It is about a risk profile that is changing. It is about the Ministry for Primary Industries and the Customs Service being more responsive. It is about protecting our primary industries. That actually, by the way, enhances tourism, because a lot of tourists come to New Zealand to enjoy our biodiversity, to enjoy the great outdoors, and to enjoy what New Zealand has to offer.

I would like to thank the Minister in the chair, the Hon Nathan Guy, for that, because we do get it. We do get that this is about our biosecurity and about protecting our agricultural interests, but there are a few things that we do not get. One of the things we do not get is why there were cuts to biosecurity 4 or 5 years ago and why 54 biosecurity staff members were cut 4 or 5 years ago. This is just a replacement—this tax. And it is a tax, and let me tell you why I know it is a tax, aside from the Oxford Dictionary as well as the Collins English Dictionary saying a tax is a levy and a levy is a tax. I also checked the Māori dictionary, and the Māori dictionary says that a levy is a tax, and if us Māori say it, well, then it must be true. So what we do not understand is why there were cuts 5 years ago and why this is now happening, and why all of a sudden it is really important that we get more in tax to replace those services that were lost.

I have a few questions, and they stem from some of the comments made by the National Party members during the second reading. One was from Ian McKelvie. He said: “the levy will not put an impost on those who cannot afford to pay it.” I am not sure what that means. If people cannot afford to pay it, then of course it is going to be an impost. So I would like the National Party to explain exactly what that was meant to mean.

Another question I have is how much this will cost to administer. If it is going to cost $6 to fly out of New Zealand, how much of that $6 is actually going to go into the administration of it? If I can just go to the police vetting legislation that the Law and Order Committee is talking about, one of the concerns of submitters about the $7 fee for police vetting is that most of that $7 is actually going to be used to administer the fee. That is a question I have for the Minister. Exactly how much of that $6 fee to go out of New Zealand is going to be used up in administration? If the biosecurity threat comes from tourists coming into New Zealand, then why do you not just exempt New Zealanders who are flying out? New Zealanders flying out of New Zealand do not pose a biosecurity threat to New Zealand. Sure, when they come back in, I can understand that they may bring in an apple or something, such as my wife did when she came back from Australia one day and it cost us $400.

I also have got a few questions based around section 140AB, “Contents of border processing levy order”. It is around the word “may”. It says: “A levy order under section 140AA may”—it “may”, so it is not saying “it will”. It is just saying it may “prescribe different rates of levy”—or it may not—“on any differential basis, for different persons or different classes of persons:”. That is really unclear—first of all, that it says “may”, and not “will”, or “should”, or “must”. It says it “may”. But what is a different class of person? I am really not quite sure what that means, and I would like the Minister to explain that. For “different persons”, why would one person be prescribed different rates over the other? It says it may “prescribe a maximum rate or maximum rates of levy:”—so may or may not? That is still unclear.

The bill says it will “provide, subject to such conditions as may be prescribed, for extensions of time for the payment of levy:”. Will there be extensions of time for the payment of this levy or not? What is going to happen to people if they need to have an extension of time? That is unclear. It will “provide for the payment of additional or increased levy in the event of late payment or non-payment:”. So will there be increased levies if there is non-payment of the levy, or the tax? It may “provide for circumstances in which levy paid may be refunded:”. What are those circumstances for which the levy may be refunded? We have got no idea. It is very unclear as to what the circumstances may be that the levy would be refunded, and to whom, and under what conditions. It would be good for the Minister to explain that to the Committee. The bill may “require that levy funds payable be held on trust in separate accounts.”—it may “require that levy funds payable be held on trust in separate accounts.”

I would like to know the answers to those questions. I would like to have those issues cleared up. This word “may”, or “must”—it says “may” in the legislation; should it be “must” or not? So those are just a few questions, just to add to the debate, that I would like the Minister to clarify for the Committee. Kia ora.

I would just like to add further comments in addition to Mr Davis’, because the amendments to the Biosecurity Act grant a very wide and broad discretion to the Minister to set the levy—the rate and the conditions around that levy. It is a very, very broad discretion, and there is no legislative guidance around considerations that he must take into account. At the end of the day, the Minister can, effectively, set whatever he wants in terms of the rate. There is no control on that discretion, and that is why it is really dangerous to impose a tax through legislation under urgency in these situations.

As an example, I would just like to seek the Minister’s clarification around. As part of his discretion, it says here in clause 5(4) of the Biosecurity Amendment Bill (No 2) that the Minister “must consult persons who the Minister believes are representative of interests likely to be affected substantially by” the levy order. That is completely up to the Minister—who he “believes” has interests that are substantially affected. I am just wondering whether the Minister could advise which groups would be substantially affected, because in my mind a major group that will be substantially affected will be inbound visitors—tourists. How is the Minister to consult with them? Is he going to stand at the airport in the arrivals lounge and have a survey, or have a chat, have a kōrero? Because they will be substantially affected by this.

It is very unclear, but it is a very, very broad discretion that is granted to the Minister. This is a tax. It is not good practice for this Parliament to be granting broad power to a Minister to be able to impose these rates and these conditions, really, as he sees fit. I would like to ask the Minister how he intends to consult these substantially affected groups. Who are these substantially affected groups? How does he intend to do that? I know that Government members have already talked about advising on the rates and the levies, because it is true that the actual end number is unknown. We do not know the cost that will be imposed on travellers. There has been talk about $16, $22, $32, but you must also add to that other departure taxes that are also payable by travellers. There are a range of costs that are all factored in, a range of taxes that need to be considered. That is why there is just such a broad discretion given to the Minister that it is really beyond the scope.

I am also really unsure about some of the drafting in these bills, and the consequences of some of the provisions. Because if I look at the Customs and Excise Amendment Bill (No 2), there is the provision here that—you have got two methods by which the Crown can currently recover the processing costs. There is the Airports (Cost Recovery for Processing of International Travellers) Act, and that legislation, I believe, allows the Crown to collect from the airport companies the cost to the Crown of setting up biosecurity, customs, and other services, including the services that are envisaged by this bill. So the Crown can collect the cost there from the airport companies. It is also talking about collecting the same costs from travellers. I know that the Government is wanting to do an exclusion, say, that airports that are currently under the former Act will be excluded from this piece of legislation. But it will lead to confusion.

The easiest way I can think about it is this. Hypothetically, a person departs from Christchurch International Airport. Christchurch International Airport pays the Crown the costs of recovering and doing the biosecurity screening, under the Airports (Cost Recovery for Processing of International Travellers) Act, and it is subject to that Act. So what does that mean? Does that mean that every traveller who is leaving from Christchurch will not pay the travel tax? If that is the case, how will you administer that? How will you be able to administer all the differential rates that will apply for the two different regimes that will be at play? In one case you will have an airport company paying to the Crown the costs to process, and in this present case you will have the traveller paying the Crown the cost for them to be processed. So there are real, practical issues that I see arising out of the application of this legislation, and they are why this legislation should be referred to a select committee and it should be subject to greater scrutiny from all the relevant parties that will be interacting with this legislation.

As we have heard, the Minister has not consulted with the tourism industry or the airline industry. Of course you are going to have the primary industries sector clapping its hands at this legislation. Who would not? This is really good for biosecurity, and we all want strong, robust biosecurity systems—absolutely. Of course the primary industries sector would say that, but it misses the point in terms of there being no regulatory impact statement. There are real practical issues here that I see that could pose some real difficulties in the application of this law. I would just like to ask the Minister how he intends to deal with all of these matters.

Could I ask this: what are the chances of bringing this legislation to some sort of select committee so that some proper scrutiny and amendments could be made? Because what I do not want to see is the passage of this legislation, and then, as has occurred with some Crown minerals legislation just recently passed—here we were at Parliament and the Government was back 3 weeks later, saying: “Oh, we need to make some amendments to it.” That is a very real possibility, just on my cursory glance at the legislation as it stands at the moment. That is a plea that I would make to the Minister. Let us refer this legislation to some sort of select committee review process so we can really look closely at it. Otherwise, once it is passed into law, what will we have to do again? We will have to come back in a few weeks’ time and put through some more legislation to try to fix it up. That is a waste of Parliament’s time and it is not good lawmaking.

Earlier we heard from the Minister for Small Business and Minister of Statistics, and he is also the Associate Minister of Immigration and the Associate Minister of Transport, so he should know about this stuff. He was very, very adamant and strident, and was yelling across the Chamber that this was $100 million more for biosecurity. I agree with Richard Prosser that that would be fantastic. On top of the Budget, Minister Guy, you said there would be about $25 million of new money, but the Hon Craig Foss says there will be $100 million of new money. You have gone some way to try to tidy that for him, I think, because I think he has got it wrong. I would love to hear that there is $100 million on top of what was being spent in the last budgetary year. You can nod or shake or whatever. Is there $100 million more on top of past spending on biosecurity? I do not think there is, is there? No answer.

💬 Hon Member: Do you want an answer?

I hope I will get an answer. Just a simple question: is there $100 million more—as the Hon Craig Foss said, and insisted on multiple times—over and above what we have had?

The other question I have, because any more money for biosecurity is good money, is: why is there a drop for business for their importation for their biosecurity system entry levy? It is not big, but there is a drop. If I look up the Customs Service at the moment, it is $17.63, and it is just going down either to $13.15 per importation or $17.37. It is not a big drop for that part—the $17.37—but it is for the $13.15.

The question, as well, is comparison. So I go to Aussie soon, and when I come back I will have a suitcase or whatever. These guys are bringing in how many containers for that? One container, 20 containers, or whatever—I know there are some other fees for them; they are not big either. So is the Minister going to be able to go and say: “We’ve looked out for you in business, we’ve actually dropped your fee, and we’ve put it on to the tourists coming in.”? I think—and we are supporting the bill—that is right for the tourists, but I do not think there should be any reduction anywhere in terms of levies and biosecurity, so I would be very keen to see that tidied up or clarified. But it is there; I have got it from what has gone through in the Order in Council and what the current fees are. I am also interested in, as we have heard from others, the exemptions. What about the exemptions? Who is going to be exempted—who, why, when, what, and what for? “Different classes of persons”—what are they?

Leaving that—I hope for some clarification around that—I was very pleased to hear the Minister say that there was going to be some money specifically around import health standards. We have got the imported pork now, and 52 percent of pork that is consumed in New Zealand is imported. We know that the pork industry—because the Biosecurity Act is wanting and does not have precaution in a meaningful way in it—lost through multiple courts and spent millions in the process of trying to defend its sector from a slack import health standard. They are the particular questions I would like answered.

It is good that there is more money going to the import health standard. It did not seem a hang of a lot, but there is some. We really do need answers to why businesses that are importing potentially multiple containers are going to have a levy that is very, very similar to an individual with a suitcase. I want that individual with a suitcase to have 100 percent X-rays, and it looks like you are doing that and are headed that way. I want to see more dogs coming in. I want to see more money. So are we going to have $100 million of new money on top of old money, or is it that $25 million to $30 million - ish of new money only in the past Budget? Thank you.

I will point out it is unusual for the party that is declared the winner of a vote to ask for a party vote on the question, but it is not outside the rules.

The Committee divided the bill into the Biosecurity Amendment Bill (No 2) and the Customs and Excise Amendment Bill (No 2), pursuant to Supplementary Order Paper 79.

Bill reported with amendment.

Report adopted.