Passports Amendment Bill (No 2)

You would be hard-pressed to find anyone who disagrees with extending the validity of passports from 5 years to 10 years. We did, in the Government Administration Committee, receive some contributions and submissions that asked that the extension be extended by a further 9 months, and that was because some countries that New Zealanders visit obviously have a minimum amount of time that they expect to be on the passports. I think most countries have 6 months. To get the full benefit of a 10-year passport, people have asked for that. I commend the Minister of Internal Affairs for bringing the bill to the House. The 5-year period for passports has been very unpopular, and extending it to 10 years is most popular. Extending it before Christmas to 10 years is even more popular. I think it is important to acknowledge that.

But it is not just about the extension of passports; there are other measures within this bill that has been brought to the House. It increases the validity period of refugee travel documents from 2 years to 5 years to bring it into line with the qualification period for refugees to be granted citizenship. So the bill amends that. There are a number of other things within the bill as well. I would describe this bill overall as being about bringing the Passports Act 1992 into the 21st century.

I want to touch on the electronic recording of information on the passports database. This is a really important thing to bring us into the 21st century and to align us with other countries. It allows both the Department of Internal Affairs and passport control to be more effective in executing what is already in place. To cancel a passport, the department has to make all the necessary efforts to advise the passport holder or the travel document holder that their document has been cancelled, but flagging it on the passport database system means that if the department is not able to contact that particular person, it will still be flagged. That is an important thing if someone is avoiding being contacted.

This bill also removes a number of outdated sections within the Act. They were up to date in 1992, but today they are out of date and no longer applicable. Those sections are now being removed under this bill.

I want to speak a little bit about the fees—particularly the forecast for the fees from 2021. We have clauses in the bill that make the setting of the fees—and I am speaking to section 40, “Regulations”, replaced by clause 34. Section 40 specifies that fees can be set by Order in Council. The original expectation, the original decision, by Cabinet was that the fee would be set at $225. I do not know—I might have got that wrong. It was suggested that $225 be the fee, and then Cabinet, I understand, has approved that the fee be set at $180. The current fee for a 5-year passport is $135, and the actual cost of processing the passport application is $404, so it does not take a great mathematician to work out that this is not going to be sustainable without future Governments making the decision that the applications for passports are such an important thing for New Zealanders.

I mentioned in my second reading speech that this was something we would need to look forward to for New Zealanders, Kiwis, who apply for passports that are not only for travel. I talked about passports being used for identification. More and more people and organisations or Government agencies do ask their clients for identification. You cannot get a better ID than a passport, I would suggest—in particular, a New Zealand passport. If the forecasts are correct, then when we get to 2021 there will be a need for a huge injection of funds into the future processing of passports. There are a number of other improvements that this bill also carries out.

As I said, in terms of the electronic flagging, these systems are acknowledged within the bill so that these processes that we have in the 21st century are able to be processed effectively. Particularly, not only for those who have their passports or travel documents cancelled or suspended, there is a higher ability to track all of those by doing this electronically. That is all I have to say on this part. Thank you.

It is a pleasure to take a short call in this Committee stage of the Passports Amendment Bill (No 2). In so doing, I want to acknowledge both the Minister of Internal Affairs, the Hon Peter Dunne, for bringing this bill to the floor of the House, and also two distinguished colleagues, the Hon Phil Goff, with whom I recall having a discussion about whether we would support the 10-year extension a year or two ago, and the Hon Trevor Mallard, who, as our internal affairs spokesperson, has championed the cause of the 10-year passport.

With that, may I turn our attention to the substance of the bill. This is the Part 1 debate—Part 1 of the bill.

💬 Iain Lees-Galloway: Go through the whole thing.

Go through the whole thing? Well, my point to my learned colleague was actually virtually the same point, which is that 95 percent of the bill is contained in Part 1, so we would expect this part debate to be tantamount to the whole thing and to be relatively broad ranging.

So let us firstly go to the principles that underlie this extension. It is essentially that the technology, and the security thereof, has advanced to the point where there is no greater risk to the travelling public or to the Crown from issuing a 10-year passport as opposed to a 5-year passport. Therefore, it is, logically, in the interests of the public to have the convenience of not having to renew their passport every 5 years when a 10-year passport is possible. I do not think there would be too many people in the listening public who would disagree with that principle being applied, and that is why the Committee is unanimous, or near unanimous, in support of this bill.

However, the complexity arises at the level of detail—not so much the drafting detail, I think—and although there are a few technical subclauses here, the intent of the bill is clear and it has been worked through the select committee process. But the main debate turned on the issue of costing. The argument is at several levels. The costing provisions, of course, are within this. The Government is holding the cost lower—and we support it—than the original Treasury modelling would have predicted. I turn to the regulatory impact statement on page 12, titled “Part Two, Cost implications of ten-year validity passports”. In paragraph 65 it says “Using current modelling, passports would cost either $199 for a five-year passport, or $274 for a ten-year passport.” Treasury further advised that the fiscal cost of holding the price down to $200 for a 10-year passport may be in the order of $200 million over time, which is a big number, and I will come back to that issue in a second.

But let us just take a moment to reflect upon the difference between the $199 and the $274. The marginal cost of production of a 10-year passport one would assume to be small or negligible, relative to the cost of production of a 5-year passport. They are essentially the same type of document with the same type of technology embedded. If the Government can explain the difference—I see the Minister of Immigration shaking his head. We look forward to him taking a call, or perhaps Minister Dunne may take a call and explain the difference. What I suspect has gone on is that officials have taken the fixed-cost component of running the Department of Internal Affairs’ overheads and defrayed that over a smaller number of transactions because members of the public are having to take out fewer passports because they last longer. So it is a fixed-cost spread—a management accounting fiction, if you like—that has led to this result. That is why I actually support Cabinet’s decision to keep this cost down.

One of the roles it is currently my privilege to play in this place is as the chair of the Regulations Review Committee. We have a couple of matters live before the select committee that we are addressing ourselves and, in one case, with the help—which is public knowledge—of the Auditor-General’s office, looking at the question of whether departmental overheads have been correctly charged in respect of fees for service, or whether, by loading fixed overhead departmental costs into them, they are, in fact, a disguised tax.

What I would call on the Minister to do now, for the purposes of clarity—and this is not because we disagree; we actually agree with the Government’s stand here to keep the cost down—is to explain exactly why an almost identical passport document that has a 10-year life costs $74 more, on this calculation, than the same document with a 5-year life. Is it because it has got five more pages or seven more pages and the pages cost $10 each? Is it because it has got a stronger binding that is designed to last in your bag for another 5 years?

💬 Meka Whaitiri: Tougher glue.

Tougher glue? Is there a better-quality insignia or some flash, hidden electronic innovation embedded deep within the fibres of this high-tech passport that has bumped the cost up to this extent?

Or is this another example of officials building in departmental overheads to the point where business as usual in the department carries on untrammelled even though there is lower demand for the product? If that is the case, then I would commend Cabinet—I do not say this very often—for making a decision to intervene and keep the cost down. That is what the Labour Party supports—New Zealanders being able to travel with the convenience and security of a 10-year passport at a reasonable cost—and we are not convinced by the cost methodology that is contained in the regulatory impact statement.

If I may come to the broader point, embedded as it is, in Part 1 of this bill—and recognising that this is a Committee stage—to reflect upon Treasury’s estimate, which I assume is an estimate over multiple years, of a $200 million additional cost to keep the price down to $200 a passport, against an earlier estimate of $400. Those are obviously round numbers, but it does bring us back to the issue of whether this Government is being prudent with taxpayers’ money. There are some examples that are not unrelated that have caused New Zealanders to question that. The first is the $26 million on the flag—

The CHAIRPERSON (Lindsay Tisch): Order! That has got nothing to do with this bill.

Well, the flag is embedded in the passport.

The CHAIRPERSON (Lindsay Tisch): No.

All right. That is why I said “not unrelated”. So I will not mention the $140,000—

The CHAIRPERSON (Lindsay Tisch): No.

And I will not mention the $11 million—

The CHAIRPERSON (Lindsay Tisch): Order! The member is testing my patience on this—[Interruption] Order! I made it very clear, as the previous presiding officer did, that we would come and just focus on the bill. So just focus on that.

Thank you, Mr Chairperson, and I will take your guidance on that matter.

If we look at the departmental disclosure statement, it has gone through the normal round of questionnaires—yes/noes—and it has provided the further information that we would expect. It is embedded in the regulatory impact statement, and we have been discussing part two of that—page 12 onwards—and we have addressed ourselves to the cost. I see that on page 14 of that document the costings that we have referred to for the required Crown revenue requirements for reducing fees for 10-year passports are set out: $13 million for June 2017, rising to $32 million for June 2023, $43 million for June 2024, $46 million for June 2025, and $41 million in 2026.

That is a substantial amount of revenue, but at the end of the day it comes back to my earlier point. It is only accurate if the departmental overhead costing, the management accounting of this exercise, is accurate. If those estimates are overblown, then this revenue position is overblown. Far be it from us to come to the Government’s aid, but putting these provisions aside for future cash flow will, of course, not help the Government reach its ascribed target of reaching surplus because it will be carrying an additional deficit of $20 million to $40 million a year from this revenue projection, which may not be fully necessary, depending on the validity of the overhead allocation methodology in that cost accounting. I would ask the Minister to take a call and describe to the Committee the degree to which Cabinet turned its mind to that issue in deciding to keep the fees down. Was it that Cabinet was prepared to inject that $200 million, or did it not actually believe the department’s estimates? I do think these things can be a little, shall we say, elastic.

May I conclude by just summing up where I began. Labour strongly supports this change to a 10-year passport. I commend the Minister. I also commend my colleagues Phil Goff and Trevor Mallard for bringing this to the House.

Can I take just a very brief call in response to the matters raised. I am not going to traverse the ground of who supports the bill and who does not support the bill, because there appears to be universal support for it.

The issue that the member who preceded me, the Hon David Cunliffe, raised related to how the financial arrangements for the new structure have been arrived at. I think there are two broad points that I would make. Firstly, Cabinet in its consideration of this measure did ask some very serious questions of the department about the structure of its accounts, and, as a consequence of that discussion, the price tag of $180 for the new passport, the 10-year passport, was struck. The member is correct—that does not run in line with the advice from Treasury—but I think it is fair to say that the Government was of the view that some challenge could be put to the department about the way in which its finances were structured moving forward.

The second point that I would make is a historical one. Passports are one of those areas that are funded out of a rather quaint device within the Government called memorandum accounts. It is fair to say that the passport memorandum account had been operating at a historical deficit. So in terms of reaching a new arrangement, account had to be taken of how that historical deficit would be eliminated, what a reasonable price was moving forward, and what sorts of measures might need to be implemented to manage that situation as we go through. So they were the drivers of the decision.

We arrived, at the end, at a point where although this is a consequence of the bill and, I concede, not part of it, if you took the annual cost of a 5-year passport compared with the annual cost of the 10-year passport, the advantage is considerably on the consumer’s side with regard to that passport. It is true that these will be reviewed from time to time. All Government charges are to be reviewed from time to time. My personal view arising from this experience, and one or two others I have been associated with in a similar vein, is that the mistake we make is not to review those charges frequently enough, and consequently we get to the point where big increases are needed to bridge gaps, rather than small, more moderate ones. But, be that as it may, that is another debate.

The point I simply wanted to respond to was that raised by the previous speaker as to how this is structured, what the Government’s ongoing view is of the figures that have been presented to us, and what response we are seeking from officials. I think it is fair to say, as with all forecasts of Government expenditure—the member used the term “elastic”, and I think that is broadly correct. They need to be challenged constantly, and will be as we move through this process over the next few years. But I am satisfied that the methodology adopted this time was correct. I am satisfied that the decisions we have reached are the correct ones, and I am satisfied, as I think the member conceded in his final remarks, that we have arrived at a position that the vast majority of New Zealanders will support.

My only—not so much frustration, but the only point I am encountering anxiety on at the moment is that having brought the date of implementation forward to 30 November, there are a number of people who are saying: “So I can apply for my new passport now to get it on 30 November.” Actually, it does not work that way. You draw a line in the sand which says 30 November—and you can apply for your passport, and I make two points as I close. If you apply for your passport in the good old-fashioned manual way, it will take about 10 working days to get you your passport, so you will certainly have it for Christmas. But applications online are dealt with in a much shorter period—2 to 3 days. Roughly about half of all passport renewal applications are online at the moment. We would encourage people to take the online process, and if they are going away quickly for the Christmas holidays, that may be the way to take advantage of the new system.

I rise to take a call on the Passports Amendment Bill (No 2). Mr Chairman, I just call upon your ability to give us a bit of latitude in that given we are speaking to all parts, this debate might be quite wide ranging and we might be traversing through several parts of the bill. I hope that will be appropriate in this regard.

I want to speak specifically about some clauses in Part 1. I will start with clause 8, which amends section 5 of the principal Act, and deals with the life of the passport. Of course, we are moving the expiry of our passports from 5 years to 10 years. A little bit of the history behind that—the passport life, the termination or the expiry date, was moved to 5 years in the first place due to public pressure around perceived security threats, particularly after 9/11. Although those threats are still evident, I think that in terms of our ability to deal with them we have much better technology and knowledge, and a lot of those perceived threats are now no longer apparent, so the need to have the faster turn-round of passports is now diminished.

We are now in a situation where it is appropriate to have 10-year passports. I know that there is inconvenience in having to renew passports sooner, but 10 years does pose some problems at the other end when we are talking about advances in technology. We know how quickly technology moves, and we know that the introduction of the electronic passport, the e-passport, for example, has had a relatively quick take-up. So it has some significant advantages, and one of them, which one of our previous speakers raised, is around cost savings from not having to renew quite so quickly.

But we have also been considering the actual cost of the document itself and the level of subsidy that might be required to keep it within a level that is appropriate for many people to access. A passport is an important document to have. It is certainly a foundation document for anyone to use as identification, not only overseas but also in New Zealand. So we would be really encouraging the accessibility of passports for all New Zealanders.

Clauses 10, 11, and 12 deal with the cancellation of passports and the matter of how that might be recorded, whether it is done electronically, whether the passport is required to be returned in a physical form, or whether the passport can be cancelled without the actual physical document being seen. This is a vastly improved situation, and it will add, I guess, to security issues in that one knows that the passport has been cancelled. It is noted electronically. This requires a high level of trust in our databases, but it is possible to do so. So that just provides some added security that passports have been cancelled correctly.

I also want to talk about new section 11A, in clause 14, which deals with the warnings on the New Zealand travel document database. The Minister can actually record on the database when there is an indication that a warning is required. That may be when a travel document is to be recalled under the previous clauses that I mentioned earlier, or when it is to be cancelled due to a court order. If this is with regard to a court order, that could cancel the document.

I also just want to make mention of the fact that in clause 24 we talk about the refugee travel documents, which can be cancelled by the Minister if the refugee is making the appropriate declaration. I also want to make a point about the United Nations High Commissioner for Refugees and the requests that are made to the UN high commissioner around appropriate identification documents. I know the difficulty for some citizens, particularly those from places like Somalia, who have issues with gaining appropriate identification documents. This bill does not necessarily deal with that, but, in principle, it is an opportunity for us to discuss the importance of identification documents and the difficulty we have. Mr Chairman, I do not want to take too much more of your time. Thank you very much.

I had to race back down here to make a call on New Zealand First’s behalf on the Passports Amendment Bill (No 2) to get it through the final Committee stage before it goes to its third reading. I understand that we are under some sort of urgency. In fact, in the second reading New Zealand First made it very clear that we would have loved to see this piece of legislation put through the fast-track system and almost done retrospectively, like we have seen earlier on in the year with some of the other legislation that the Government has put through. However, we acknowledge that the Minister of Internal Affairs has brought that date forward now to 30 November, and I think that that can absolutely be heralded as a good thing for New Zealanders. I certainly am one of those intrepid travellers who enjoy having the use of a passport. Like many New Zealanders who have got one, mine will be running out shortly and I will be replacing it with a 10-year passport.

I think the bill would be more aptly named as the “Passports Extension Amendment Bill”, simply because the title Passports Amendment Bill (No 2) does not really give the idea of what it is all about. Although you can never judge a book by its cover, it certainly is quite nice to get a book that you can get from its title some sort of direction. So, to that end, I think it is quite important to get that name right.

We do support this bill wholeheartedly. Back in the early 2000s, when, of course, we had the terror attacks on 9/11, New Zealand First was one of the parties—in fact, the only party—that was in opposition to shortening the time frame. In fact, a lot of the countries around the OECD did not reduce their passports’ time frame from 10 years down to 5 years. Of course, by the time you have put in the 6 months’ travel document time, it actually was only a 4½-year travel document. So to have it put up to 10 years is a very, very good thing to do.

I have already acknowledged the Hon Peter Dunne for the pricing of this passport. We understand that it was going to be considerably a lot more when it went to Cabinet. To get it down to $180 is a reasonable step forward. We do have some concerns about the subsidised amount of $200 million. We are hoping that that is not going to be levied on to the passports in the future, which could see these passport documents rising to $400 by 2020 or thereabouts. That would give some serious concern. I think that what we need to be looking at are ways to offset those costs. It could be as simple as reducing the number of pages. Certainly, as far as a user-pays system goes, it is the right way, but that is going to cause some serious concerns about making travel affordable for the average, everyday Kiwi, who enjoys it so much. The biosecurity measures that have been put in place are another great step forward to bringing New Zealand into the 21st century with regard to its passports.

I do not think there is a lot that can be added to everything everybody else has said today and in previous discussions. We certainly would like to see this legislation sped through the final reading so that we can actually start getting those applications ready for New Zealanders to apply for a 10-year passport from 30 November. Thank you.

It is a pleasure to be able to speak in this Committee stage of the Passports Amendment Bill (No 2), for which I appreciate the intervention of the Government whip in making this an all-questions, all-parts debate.

Looking through the legislation, the first thing that is kind of remarkable, in a way, and worth commenting on, I think, is that it has come back from the Government Administration Committee with just one change. That in itself is reasonably remarkable. It was, certainly, a shortened select committee process, and I think that all of us in Parliament were reasonably comfortable with that. This is a change that the public was very keen to see Parliament make in a reasonably timely fashion, and I understand that the committee’s deliberations on the bill were reasonably brief.

So the fact that there is just one change is remarkable in and of itself, but the fact that it is a change to the commencement date, to bring the commencement forward—I do not know that I have seen that before, actually—demonstrates the height of efficiency on the part of the Parliament. I think it is something to be applauded and I congratulate the select committee on bringing the commencement date forward. I know that there will be a lot of people—and the Minister mentioned this—who are travelling over the summer period who will appreciate the commencement date coming forward slightly.

I had a quick look at some of the submissions. Since there were no changes made to the bill, I was interested to see whether any of the submissions requested changes to be made to the bill. One thing that did appear to come up was around this issue where for a lot of countries, when you apply for a visa or if you are entering a country, your passport needs to be valid for a period of time. Often it is 6 months, sometimes longer. That, in effect, shortens the length of the life of a passport. If you are coming towards the end of even your 10-year passport—say, there are 4 months left to run on it—you, effectively, need to apply for a new passport to be able to travel to a number of jurisdictions because of that issue.

I noticed that this came up in some of the submissions, especially around the question of—if you do apply for your passport in advance of expiry, your next passport will then last for 10 years from the point at which you apply for that next passport, not 10 years from when your current passport expired. That again, effectively, shortens the life of the next passport. I wonder whether that was something that the select committee gave consideration to and, if it sought advice, what advice was given about, obviously, why that was not a desirable change to make, because by my reading of it, as a member who was not on the select committee, that kind of change was not made at the select committee although it is a valid point.

It is less important with a 10-year passport. If you are looking at it in percentage terms, it is less important with a 10-year passport than it has been with a 5-year passport. A 5-year passport, effectively, is being reduced to a 4½-year passport. That is quite a significant reduction in the life of them. But still, nevertheless, it was a valid concern that I know was raised by people who submitted to the select committee, and yet the bill came back with just the one amendment around the commencement date.

The most important part of the bill, the bit that everybody is going to focus on, is the lengthening of the life of a passport from 5 years to 10 years. But it also makes a number of changes that, essentially, I suppose, bring the legislation around passports into the 21st century, into the digital age, and that acknowledge that a lot of the data that is associated with passports is maintained in electronic records. The fact is that it is actually possible to cancel a passport through electronic means. You do not have to actually have your hands physically on the passport to be able to cancel it. That is simply a recognition of modern-day reality. These are functions that are available to the Department of Internal Affairs and to the Minister of Internal Affairs that are useful, especially given that you may want to cancel a passport that is in the hands of someone who is overseas. I note that there are also some changes around the ability to extend powers to the overseas issuing officers in London and Sydney, for instance.

So, overall, this is a good piece of legislation that the Opposition has been happy to support. There are some question marks around the fees, but ultimately we appreciate and accept the explanation that was made by the Minister around that. We appreciate that for a while there, there was a suggestion that the fees would have potentially been significantly higher. The Government, I think rightly, saw fit to step in to ensure that we did not see—I saw numbers along the lines of $400 being charged for a passport. That would have been prohibitive to people, and we do not want to see passports being something that is a luxury for people. This is not just a travel document but an important identification document that should be accessible to everybody, so that was the right decision on the Government’s part to step in there and ensure that New Zealand passports would be accessible to most people.

I am very happy to endorse this legislation and I encourage members to vote in favour of it—I suspect that everybody is.

Part 1 agreed to.

The question was put that the amendments set out on Supplementary Order Paper 115 in the name of the Hon Peter Dunne to Part 2 be agreed to.

Amendments agreed to.

Part 2 as amended agreed to.

Schedule agreed to.

Clause 1 agreed to.

Clause 2 agreed to.

Bill to be reported with amendment presently.