Customs and Excise Bill

I move, That the Customs and Excise Bill be now read a first time. At the appropriate time, I intend to move that the Customs and Excise Bill be considered by the Foreign Affairs, Defence and Trade Committee. This bill replaces the 1996 Customs and Excise Act, which is over 20 years old. Some parts of it are 50 years old, and others are over 100 years old. The current Act has been extensively amended, which has created a complex piece of legislation that is difficult to use. The prescriptive style of the Act also means that frequent amendments would continue to be required. Modern legislation that is easy for people to use and understand and that can keep up with modern business practice and technology is long overdue. The aim in rewriting the Customs and Excise Act is to make it less prescriptive and more principles based, and to give the flexibility needed for future technology or business practice changes.

Customs provides a range of services to business, and the quality and speed of the service makes a difference to businesses’ ability to perform, to grow, and to export. The businesses and industry organisations that use and are regulated by this legislation have contributed to identifying what needs to change, and they have also been extensively involved in the process of developing the new legislation. The bill enables Customs to deal with considerable growth in both trade and travel, and with the security challenges that that growth brings. It represents the modern border environment, and it is fit for purpose, supporting economic growth by making it easier for traders to do business and by reducing the burden on businesses and compliance costs.

Customs’ core role is not changing. The bill supports the movement of legitimate travellers and goods across the border, and provides the legal tools needed to protect New Zealand. The major change that this bill makes is to modernise the language and the structure of the Customs and Excise Act to make it simple to understand and to use. The bill also includes a number of policy changes. These include increasing transparency of the obligations for users of the Act, reducing unnecessary processes, an increasing efficiency and flexibility for traders, and enabling some possible future changes in technology to be accommodated.

In particular, the bill increases efficiency and flexibility in the import and revenue collection system. Importers who bring goods into New Zealand when it is not possible to know the final value of the goods at the date of import will find it easy to comply, by being allowed to declare a provisional value for imported goods, and then providing Customs with the final value once it is known.

The bill also gives Customs the ability to issue binding rulings—that is, binding rulings on the valuation of imported goods. Valuing goods for the purpose of import can be complex, and this provision will provide importers with more certainty over how much duty they owe, and a new customs process for appeals over duty assessment, which is cheaper and simpler, will be available.

The bill recognises that storing business records offshore or in the cloud is the way business is conducted today and, by allowing this, it will make compliance with customs rules a lot easier. Everyone who interacts with Customs is expected to comply with the rules and processes that are in place to protect New Zealand, and to support the collection of Crown revenue. This bill makes it clear that those interacting with customs systems must meet high standards and provide timely information. For example, those applying for a Customs-controlled area licence must meet certain criteria, and excise manufacturers will be required to submit nil returns. For the small proportion of those who do not comply, the bill updates and extends Customs sanctions, so that they maintain relativity with sanctions added more recently to the Customs and Excise Act, and also with comparable sanctions in other Acts.

Administrative penalties will apply to all export entries, to ensure that Customs has accurate information to give to our trading partners, to give them assurance and to protect New Zealand’s trading reputation. Trade Single Window users who persistently make errors when entering information can have their registration suspended or cancelled. The vast majority of users are responsible and accurate in their use of the system, and this sanction will be a last resort for those who continue to make errors, in spite of other penalties and interventions by Customs.

The rules around locally grown tobacco will be tightened, to reduce the potential for avoiding excise payments and for supplying tobacco illegally. The personal allowance will drop from 15 to 5 kilograms per annum, and that is from about 100 to approximately 30 cigarettes a day. Also, tobacco curing will be included in the definition of “manufacture”. An infringement notice scheme for minor offending will replace petty offences, increasing the fairness and transparency of the system. The details of this scheme will be set by regulation.

The bill confirms the majority of Customs’ existing powers. The bill continues to recognise the balance needed between protecting privacy and ensuring that Customs can continue to protect our border. New mechanisms will enable customs officers to undertake controlled deliveries, to investigate smuggling, and to perform administrative functions offshore, like the pre-clearance of cruise ship passengers.

Public concerns about Customs’ power to examine and access electronic devices have been addressed through a two-stage search threshold, based on officers having reasonable suspicion or belief of offending. If a customs officer asks, travellers crossing the border will be obliged to make all goods in their possession available for examination. If an officer has reasonable suspicion that an offence has occurred, an electronic device is able to be examined. Where an officer has reasonable belief that an offence has occurred, a fuller search of the device may be required. Searchers of e-devices are confined to information on those e-devices only, and not information that is remotely accessed. If the officer has neither reasonable cause to suspect nor reasonable cause to believe that an offence has occurred, the officer cannot search an electronic device. This is a reduction in the powers that a customs officer has now, but the Government believes that this approach is a good balance between protecting people’s privacy and providing Customs with the powers it needs to detect and prevent smuggling and to manage national security risks.

The bill also facilitates greater information disclosure from Customs to other Government agencies, for security, law enforcement, national security, and a range of Government services. The way Customs uses and manages information will be made transparent in a framework that specifies the purpose for which information can be disclosed to and accessed by other Government agencies. Sensitive, personal, and commercial information will be protected in new provisions, and the arrangements will be developed in consultation with the Privacy Commissioner.

This bill balances the protection of New Zealanders with individual rights. It provides transparent and easy-to-use legislation that makes individual and business obligations clearer, and improves assurance over the collection of revenue. It is flexible enough to enable Customs and businesses to adopt future technology and change the way they do business, making it easier to do business, which supports economic growth. The majority of the bill will come into force on 1 April 2018 or 6 months after the date of Royal assent, whichever is later. This date has been chosen to avoid implementation during the busy summer season for traders and travellers. It gives me great pleasure to commend this bill to the House.

I am pleased to speak at the first reading of the Customs and Excise Bill. I would like to say at the outset that Labour will be supporting this bill to select committee, and I am sure that our members on the Foreign Affairs, Defence and Trade Committee will be listening closely to what will no doubt be a number of submitters, because this is such a broad piece of legislation. As the Minister of Customs has said, this is a complete rewrite, basically, of our customs and excise legislation. It is a hefty bill—some 370-odd pages—and it is all about hauling our customs and excise laws into the 21st century.

As we know, Customs is the oldest Government department of Aotearoa New Zealand, so it has played a crucial role—and it does play a crucial role—daily in our economy. As the Minister has stated, the wording of the existing Act—the 1996 Act—dates back some hundred years, so it is definitely in need of updating, and I commend the good work that has been carried out to bring this bill to the House. The work started on this little review, I believe, back in 2013, and there was quite a significant period of consultation with affected industry people, and all other individual citizens and businesses that interact with customer service, and that took place last year. So there has been a lot of preparatory work preceding this bill.

I just want to focus on a couple of aspects. When we are thinking of Customs, as the Minister has said, it is about supporting the legitimate movement of travellers, of trade, and of goods across our borders. So it is a vital service that we have, but it also collects revenue and it also plays a role in protecting our communities from harmful or prohibitive goods that may enter our country illegally. Customs has quite a broad-ranging function, and all of those functions are expressed in this bill modernising the way that Customs carries out its work at the border.

Just to provide a bit of background. It is not just international travellers—members of the public—who will be affected by this bill, but also, potentially, online shoppers and a whole range of businesses that interact with Customs, that basically move goods and travellers and products across our borders. I am talking about airports and seaports, airlines, cargo operators, freight forwarders, commercial importers, customs brokers, exporters, shipping lines, storage operators, and even yacht and small-craft operators. So there is a broad range of Kiwi businesses that daily have to interact with our customs laws, and they have found it increasingly difficult in recent years to deal with the ever-changing technology, to be able to adequately comply with the law, while also being able to get on with their business. There has been a lot of work go into this bill.

I would like to equate the Customs Service with a process that is going on at the moment in the National caucus. If we think of what Customs does at the border, that is exactly what the National caucus is doing at the moment. There is a parade of passengers who are lined up and only one of them can make it through to that esteemed position of leader of the National Party, and that is exactly what Customs does through its monitoring, its assessment, and its processing of folks at the border.

We have Mr English, obviously—Dipton’s favourite son—who is there at the border hoping to be processed, hoping to get that passage through to that lofty position. We understand—we have had word today—that “Crusher” Collins, Judith Collins, is also throwing her hat into the ring. She is lined up in the passenger queue, hoping to get processed through. We have also got Jonathan Coleman. He is lined up there, too. He will be processed. I am sure the National Party caucus will be looking intently and scrutinising each of these aspiring passengers—

💬 Dr Megan Woods: Will they be reading their emails?

That, too. There will be a lot of work going on, I am sure, and a lot of conversations happening over the next week, much akin to the work that is going on at our borders daily, carried out by the good folks of the New Zealand Customs Service. But I digress. I want to return to the bill, but I thought that was a very good analogy of the intense work that is undertaken by the good folk of the New Zealand Customs Service at our border.

Of course, we have heard throughout the Minister’s kōrero about the use of cutting-edge technology and innovation to keep our border safe, and transformational programmes to do all this flash technology, which is obviously part and parcel of our fast-moving lives in this modern world. I would just take the House’s time to draw attention to some of those projects that the Customs Service has embarked on in recent years. It is no secret that there have been epic failures, and I refer to the Joint Border Management System (JBMS). We are still waiting for Customs to deliver that system 5 years after it was due, with a price tag that is at least $50 million greater than the actual original budget that was approved by Cabinet. That is one example of supposed cutting-edge technology that is to be rolled out by the Customs Service.

In all the great rush to make things quicker, faster, and more flexible, we need to ensure that Customs is delivering on producing what it says it is going to do, because we know, as a fact, that the risk and intelligence tools, which were the central part of the Joint Border Management System, have not been delivered. They will not be delivered, we understand, until sometime towards the end of 2017. They will not even be delivered by the IT contractor that got paid over $100 million to do that job. IBM failed to deliver the risk and intelligence tools that were a critical component of the Joint Border Management System.

💬 Hon Clayton Cosgrove: INCIS Mark II.

Absolutely INCIS Mark II, Novopay, and every other IT debacle that has been undertaken by this Government. I do want to stress this point, because if someone was to do a case study on how not to roll out and how not to deliver on a major IT-build project, it would be JBMS. We understand that the eventual delivery of the so-called risk and intelligence tools, which IBM gave up on—or, should it be, Customs gave up on IBM to deliver—is now being moved in-house, within Customs. Customs is going to come up with and deliver some type of risk and intelligence tool.

The critical word around this whole IT project is the first word “Joint”. This was supposed to be a joint IT system between the Ministry for Primary Industries (MPI) and the Customs Service, and, unfortunately, MPI is not benefiting at all from this system because there is nothing there to help MPI. I am not talking about the Trade Single Window. I am talking only about the risk and intelligence tools in protecting our borders, and biosecurity, and keeping those nasties out, so we can protect our very important primary industries across our country.

I just wanted to make the point that this is an important piece of legislation but we have seen, all too often, the failure of Customs to deliver on this. But, apart from that, this is a worthy piece of legislation, and we will be supporting it at its first reading. Kia ora.

It is good to see the Labour Party is supporting this bill, and we look forward to other parties in the House doing similarly, as well. I think this is a good piece of legislation. All members of Parliament should recognise that we have a role to play in keeping our borders safe and secure, and that is one thing that, I know, many people in this House talk of many times. Now is the time for them to show that they actually follow that in their actions, by supporting this bill.

The current legislation came into force in 1996. Although this is not a substantive rewrite of it, it does go through and add a bit of an update, to take into account more modern times. So there are some business-focused initiatives in it; some of those enable Customs to make issuings over the valuation of imports, and that will give them greater certainty. These rulings can be binding. The bill makes explicit the process for declaring a provisional value for imports where values cannot be known at that time. There will also be some relaxation of restrictions on businesses and their storing of records.

There are also some changes to the sanctions involved, with a new infringement scheme—similar to the one used by the Ministry for Primary Industries. That would give an easier mechanism to deal with petty offending. The range of penalties will be increased to ensure consistency with comparable penalties in other legislation.

Probably one of the easiest things to talk about and discuss will be around the examination of electronic devices and other goods—namely cellphones—that travellers may be coming through with. That is something that many people will take into account when looking at this legislation. There are also some rules around information disclosure, the passenger name record, and other changes. So this is a good bill, and we look forward to it passing through this House.

It is my pleasure to take a call on what I think we could describe as a reasonably uncontroversial piece of legislation that Labour will be supporting. I do not think there has been anything as exciting happen in the customs area since SmartGate that we are here to look at. As other speakers have traversed, this is a piece of legislation—

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

Sitting suspended from 6 p.m. to 7.30 p.m.

I rise to take a short call this evening on the Customs and Excise Bill. I have noticed that we have a good trend in this Government of looking at legislation that has been in place for a number of years—and, in this case, I am obviously talking about the Customs and Excise Act—and looking at opportunities for improvement. We have done this in a number of older Acts across a raft of areas of government, and now, of course, we are turning our minds to customs and excise.

Clearly, when you are looking at a piece of legislation that has been in for, in this case, over 20 years, there is always opportunity for improvement. The bill that we have in front of us to reflect on tonight reflects a determination to make it a modern framework. We have spent quite a bit of time out with the various stakeholders to get their feedback to ensure that what we have put in front of the House this evening for initial reflection reflects their particular perspectives. In particular, this bill replaces the 1996 Customs and Excise Act with modern legislation that streamlines and simplifies procedures for more effective border management. We all understand how critical border management is to our economic performance as a country, and this bill talks to a wide array of improvements that we certainly look forward to getting feedback on.

One of the areas that I have particular interest in is the ability of Customs to be able to examine electronic devices and other goods, and unlock some of the coding that, perhaps, hitherto has prevented Customs from being able to get a sense of the risk that is potentially at our borders. As always, you have got to reflect on that balance between personal freedom and the protection of the New Zealand border, which is in all of our interests. I think we have landed this in a particularly good spot, but I am sure that through the select committee process we are going to get, I think, quite a lot of feedback in respect of that.

I think this is a good advance on the historic Act, and reflects a Government that is committed to ensuring that we are always looking for opportunities for improvement. I look forward to the debate that we will have at a select committee to discuss the various options that are in front of us here today. Thank you.

Tēnā koe, Mr Assistant Speaker. I rise to address the Customs and Excise Bill in its first reading. There is obviously a need to update and modernise this bill. We recognise that there are aims and potential improvements in terms of streamlining our customs procedures, reducing the amount of time and cost to importers and exporters, modernising legislation, and introducing an intention test that would single out those errors by individuals who defraud customs as opposed to those individuals who are accidentally caught up in making a mistake with their customs declarations. So we welcome these aspects of it.

We have three major concerns about this legislation. The first and most critical concern is the powers given to Customs to access electronic devices. Electronic devices for most people are part of who they are these days, particularly those who are under 40 years old, and there has been significant concern from submitters in submissions to the discussion document. There were sweeping powers sought by Customs in the discussion paper and after pushback from the Privacy Commissioner, the Ministry of Justice, which advised caution, political parties, including the Green Party, and NGOs we saw some limitations that were added to the provisions on access of electronic devices. The issue here is not only access to the devices but divulging the passwords and decryption of those devices.

There are concerns from submitters in a number of areas. Firstly, for tourists and business visitors this may be an unwarranted intrusion into their privacy and they may resent it. Secondly, businesses might be forced to divulge commercial secrets in the process of divulging this information. There are, for example, consultants who sign contracts that would explicitly prohibit them from releasing confidential information without a court order. There is no court order provided in these powers given to Customs, merely a suspicion or reasonable grounds to believe that there may be a criminal act.

Thirdly, there are, in fact, significant amounts of personal information that we all store on our electronic devices and, personally, I would not want customs officers to see some of my photographs, thank you very much, of my family and myself in some circumstances. We have our financial records, we have our medical records, we have our emails, and this legislation would also give access to our credit cards. In fact, much of our lives are on these electronic devices.

Finally, sensitive information may fall into the wrong hands. This is not just a spurious concern; in fact, there are cases such as the Switched on Gardener case where overzealous cooperation between Customs and the Police led to the misuse of information. All of these instances from submitters give rise to serious concerns that there are dangers here in the potential granting of powers to Customs that exceed the necessary powers in order for it to undertake its tasks. Furthermore, there are some concerns about how effective this is going to be anyway, in so far as the power to access devices does not give Customs the power to access links to those devices, and these days much of the information is stored on the cloud or other storage devices, which are remote from the handheld devices. So, in fact, if Customs is after this information, then there is no guarantee that they are going to physically have the information on the electronic device itself.

Fourthly, if somebody wanted to not give over their passwords or their decryption, then they would be fined—as far as we can understand from the proposal so far—$5,000. If we are looking to perpetrate serious criminal activity, then $5,000 is probably worth paying in order not to be found out. So we have some concerns over the effectiveness of these provisions. The question comes as a balanced right. Customs can already access devices for suspicion of money laundering, terrorism, or smuggling if it gets a warrant under the Search and Surveillance Act. So the question is: is the provision of further powers to Customs a breach of privacy without sufficient safeguard? That is our concern. We need a clear threshold and we need due process, and we regard the bill as not having yet provided that in draft form.

A second area of concern is increased information-sharing with other agencies. Amongst the 91 submissions to the discussion paper there were a number that raised concerns about sharing of information. Although there are some protections of biometric data, name, and intelligence generated by Customs, there are still concerns about the sharing of information widely amongst Government departments, particularly given the previous incidents of unauthorised release from Government departments through mismanagement in the past. We welcome consultation with the Privacy Commissioner and others, in order to tighten up some of these safeguards.

Finally, there is a set of issues where we would look to ensure that the Customs and Excise Act is actually fit for purpose—for example, one of those is in the area of transfer pricing. Under OECD emerging initiatives on base erosion and profit shifting, the transfer pricing issue becomes absolutely crucial. We would want to make sure that the bill includes sufficient powers for Customs and sufficient safeguards to ensure that transfer pricing is able to be dealt with, so multinationals cannot get away—as they all too often do at the moment—with shifting their profits to places with low or non-existent tax rates.

With those provisos, we would support the bill going to the select committee. We will look to engage constructively with this bill in the select committee. We would hope that there will be assurances to these concerns provided in the further development of this legislation. Thank you.

I rise on behalf of New Zealand First to speak to this Customs and Excise Bill that is before the House this evening. Unfortunately, the New Zealand First caucus has not had the opportunity to discuss what appears to be a reasonably comprehensive bill. Today we stand to support this bill to the select committee so that we can use the democratic process, which includes listening to the public. Only after careful examination and analysis will we be in a position to highlight the merits and demerits of this legislation. Only then will we be able to take a clear stand and either oppose or continue to support this bill.

On the face of it, this bill seeks to modernise and simplify the current legislation. We will support this approach, as this would build better controls at our borders—controls that would prevent illegal firearms, for instance. We note that this bill will allow more flexible powers to protect New Zealand. We hope that that does not mean opening up the gaps that already exist. We note that the bill will enable greater information-sharing amongst Government departments, such as Customs and IRD. If that works for Customs and IRD, then we will hope that the same approach also works between Corrections and Police, so that our communities can be kept safe.

The bill seeks to make it easier for New Zealand traders, which is good. We will support economic growth by making it easier for New Zealand businesses to do business. New Zealand First is looking forward to learning more about how this bill will enable the adoption of future technological changes. This is future-thinking, and we like that. If only we could be certain that the technology will be used to close some of the gaps. At the moment, 90 to 95 percent of the consignments at our borders are not physically examined, so we hope that this bill will do something to fix that fault in our system, and almost all of those consignments will be examined to prevent the import of illegal firearms also.

New Zealand First looks forward to more debate and to the select committee process, so that these concerns can be addressed and better legislation can be enacted. Thank you.

This bill is a very good bill, sponsored by the Hon Nicky Wagner—thank you very much for the work that you have done on this, Minister. This bill brings forward this piece of legislation—the activity that surrounds it—by 20 years; it replaces the Customs and Excise Act 1996. If we think about the last 20 years, changes have taken place around not only technology but the incredible movement of goods and people across borders and the incredible open world—but also the world in which we live where security has become so much more important. So what this bill does is that it brings everything up to date. That is so critically important if we want to continue to live in that open world. We take that openness for granted, but we must have legislation, we must have regulations, and we must have provisions that protect our freedom. This work on this bill does precisely that. I want to just commend the Minister for that and the good work that she, along with her officials, has done. It is very, very important for New Zealand.

The area of electronic devices: we live in the world of data—the big world of data, the world of information, the world of communication—where so much happens. We no longer live in the age of snail mail; we live in the age of instant communication globally. All of that is important because, as we know, there was the situation that happened in the United States of America where there was information on a device and there was great difficulty for the federal officials to be able to access that information in order to protect the security of their nation. We have to find the balance between personal privacy and public good. I guess this is the work of Parliament all the time: finding the balance to protect the public good but also protect the privacy of individuals.

As technology advances and as the capabilities of enforcement agencies also progress, we have to—from time to time in this House—update legislation. Here we are putting a number of aspects of primary legislation into regulations so that the updating of that can be concurrent with the increase in technology—so we are more nimble and more able to address these issues.

I am very happy to stand and support this bill and the work that the Minister is doing. We are a trading nation. We have an incredibly large border for our population. We have a great coastal area, but we are increasingly connected by more and more air travel. And, of course, freight is a major, major component of our economy: 85 percent of that which we manufacture in New Zealand is exported, and, of course, we bring in at least the corresponding value in imports as well. Protecting our borders from all sorts of issues but also understanding the financial transactions that need to take place with imports and exports is very, very important. This bill very, very proficiently addresses this. I am very pleased to stand in support of this bill. Thank you.

Can I just begin by acknowledging the men and women of our Customs Service. As an Opposition MP, I do not think there has been a Government department or service that has been more willing to let members of Parliament tour their facilities. I had a tour of the Christchurch airport earlier this year. A number of our MPs went and visited Northland and met some of the chaps at the port just out of Paihia. Also a select committee that I was on about 2 or 3 years ago had the pleasure of visiting one of the operations centres in Auckland. I think it is one of the most open Government departments that we have been able to get access to in our term in Opposition, as that comes to an end.

But there are a number of issues within this piece of legislation that we do want to highlight and that, I think, are going to get some serious scrutiny during select committee. I do note that the Minister, Nicky Wagner, in her contribution to this debate said the powers around the ability for customs officers to search devices are being scaled back. I do also point towards the contribution by the Green MP Barry Coates around its concerns, because we do hold some similar concerns as well. If you listen to the Minister I think you would hear, or you would think, that nearly all of the powers to be able to search devices have been rolled back and are nowhere near the powers that the Customs Service currently has—but you only have to look at the clause that pertains to the access to devices and the powers that customs officers may have, to see that they are still there.

We are really going to relish the opportunity to grill officials at the select committee around what kind of powers customs officers still do have. If you do look at Part 4, clause 207(2)(c), it states in plain English that customs officers will have “the power to require a user of the device to provide access information and other information or assistance that is reasonable and necessary to allow a person exercising a power … to access the device:”. In plain English, that is saying that if a customs officer is suspicious, and a number of other things are ticked off, they can ask anyone for their PIN number or their passcode to that device.

I think some clarification is needed—and I am sure that the Privacy Commissioner will be called in to the select committee—about what actually that allows those customs officers to do. Is it access to just the device itself, so any information held on that device could be accessed—that might be stored on that device—or does it give them the ability to say: “Well, now we’ve got access to your device we also want access to any account that you may have on that device.”? I think that is a really important question for this Parliament to ask of the officials, and of the Privacy Commissioner, because although we want the integrity of our borders to be as strong as possible we also have to be aware of the civil liberties issues that we have when people who may be suspected of things that they may not even be guilty of will have to give Customs access to their personal devices, and potentially the accounts that they have on them, whether it be an email account or something else.

I think there are some serious issues, and I think the Government may be trying to downplay this issue by saying that the customs officers do not have as much power as they currently do. But the powers that they will still retain in this piece of legislation are still significant. I think most people would feel that getting access to someone’s phone or someone’s device is an encroachment on privacy. I am sure the Government members at the moment—given some of the stuff that is happening over there—would not want their devices to be encroached on, because of the nature of some of the messages that are going round the National Party caucus at the moment. I do not know. It is just a guess that there might be a bit of interest in a few messages flowing between three particular people to the other 56 members of the National Party caucus. So the privacy of those messages, I am sure, is important to them.

There is, seriously though, another issue that I want to talk about, and that is the biometric information that Customs is currently using, and some question marks about how it can use it, and how that can be stored. Anyone who uses Facebook these days will be, kind of, either happy or a little bit worried that when a photo of you goes up on Facebook it automatically recognises somebody’s face—and that is the kind of technology that is being used at our borders currently, to make sure that people who should not be coming into our country do not get past the border.

In the past, information contained within a passport has been our main check to check someone’s identity. I think that is date of birth, country of origin, what citizenship you have—obviously—where you were born, your full name, and all of those details. They have been the main checks to make sure that people who should not come into New Zealand are not there. But anyone who has been through SmartGate in the last 7 years would know that if you go through the border now it is just a simple look down the camera and the system recognises you.

There have been, I understand from my reading of the regulatory impact statement—and I would like to thank Lianne Dalziel for giving me that tip of always reading the regulatory impact statement—some issues around how that information can be used and retained by Customs. I do want to note to the previous speaker, Jonathan Young, who spoke before me, that times are different: it has been 20 years since the parent legislation was put in place, technology has come a long way, and the ways used by the people who are trying to get around the integrity of our borders have also changed. The simple visual check of a customs officer holding the passport up these days is not good enough any more, and so that is why we are having the biometric checks. There are issues that Customs has had, I think, with some of the use and some of the sharing of information and some of the storage of biometric information, and the updates within this legislation are good.

In conclusion, Labour will support this bill going to a select committee. We do believe that it takes some very wise and necessary steps in the area of keeping the integrity of our borders. We do want to put on the record again, and we do want to stress, that we still have some concerns about the ability of customs officers to access information. That is not to say that we do not believe there are situations where that is valid, but it is to say we want to make sure that there are safeguards in place so those powers are not so broad that those powers can be used inappropriately by agencies—whether that be Customs or anyone else working with Customs—and also whether that information could be shared. Those are the kinds of issues that we want to see and will be raising questions about at the select committee. We note that they have been raised by other parties, and we just want to mark it with the Government that we do not think that it has put enough safeguards in there and there are still some questions to be answered.

Thank you very much—

💬 Hon Ruth Dyson: Good choice.

A very good choice—Hobson’s choice, I think. Look, it is good to stand up and talk about this piece of legislation. I must admit, though, when they say that this is—where are we—refined and remediated legislation, I look at a bill that is 380 pages and go: “Shivers! Is this really simplified? If it is, the other one must have been hell of a long.”

The other thing also is Jonathan Young, the MP for New Plymouth, said that a lot has occurred over the last 20 years—and I agree with him—but some things have not changed. Twenty years ago, Bill English had been in this House for about 10 years already. He was already an experienced MP 20 years ago. Some things do not change. And, I must admit, looking over at the National benches at the moment, I do not think I have ever seen Paula Bennett sitting in the back row. We know why she is doing it now. What did she promise you, Mitch? Foreign affairs, mate—foreign affairs? Ha, ha! Jami-Lee Ross, have you got finance—finance? Police? Oh, police—oh, OK. There is a lot of horse-trading going on here, is there not? But, anyway, back to the bill. Ha, ha!

💬 Hon Paula Bennett: No, no, you can talk about me.

Oh, OK, we will talk—ha, ha! Not again. Anyway, a lot has changed, and there is no doubt about it. In a bill that is 20 years old and with the way that technology has moved, like a number of members have spoken about, it is important that a bill such as this is not prescriptive, because if it is, it goes out of date really, really quickly. I mean, who would have believed 10 years ago that we would be doing so much on our phones at the moment? In fact, I remember the first time I got a text, I got really annoyed and thought “Why don’t these people just pick up the phone and call you?”, and now texts are a great way of communicating when you do not want to speak to someone.

But, that aside, technology is moving at such a rate that we cannot have a bill that absolutely says “These are the things that have to be done.”, if using a particular device. We have to have an enabling piece of legislation that takes into account not only the technology that exists today, which we know will be slightly different from the technology that exists when this bill actually gains its Royal assent and commences, which I think is April 2018—so in that period of time we know that technology will change. Facebook will update something. The new model of—well, not Samsung. The new model of Apple will be out there. The new iPad will be doing things that it cannot do at the moment. So we have got to have legislation that keeps up with that.

I am going to actually be a little bit of a devil’s advocate with regard to something that my colleague Kris Faafoi talked about, and the Greens and others—about digital devices. The bottom line is that this is how we store data these days. This is how we carry information. You know, on your iPad or on your phone—on any technical device—there could be any manner of data that could be insidious, illegal, or used to perpetrate illegal acts. I believe that in this day and age we do need to have the ability to access that data if—and this is the rider on this—there is reasonable doubt or if there is a reasonable expectation to believe that that digital device is being used for illegal activity.

There will be a whole lot of tests around this. We know that. When you walk through an airport at the moment they pull you aside randomly, they run something down—apparently they are looking for bomb residue on your suit on your jeans—and they test it. That is random. What I do not think we would want to see is someone grabbing your mobile phone and doing a random password search and checking all your photos. But I do not think that is what we are talking about. I completely agree with Mr Faafoi when he said that the customs officers and the Customs Service—certainly in my interaction with them—are highly professional and do an absolutely brilliant job.

Having said that, we are requiring them to be much more professional as well. When you think that even last year alone, $284 million worth of P came across our borders. That was twice as much as the year before and I suspect it will be about half as much as next year. So what we are facing these days is a level of criminality that is becoming so much more sophisticated in the way it does things. The only way we are going to keep up with these chaps is if we are one step ahead of them—or at least playing on a level playing field. So, first and foremost, the legislation must reflect that. Secondly, the customs officers must have the ability to use the most up-to-date tools to get in and to extract information from people who they reasonably believe are engaged in some form of criminal activity.

There are some other things that go on in this bill, but the one thing that I come back to quite a bit is our global reputation. You know, we do have a very good reputation. I do actually think—I am being serious on this—that one of the things that this Government has done very poorly is actually proactively managed our global brand—i.e., I think that some of the things this Government has done have devalued the value of our brand, but that is a conversation for another day that I am happy to have with anyone if they would like me to.

But what I am saying is that in the First World, our allies, and our friends, and other customs services around the world as well, expect our customs laws, processes, procedures, and technologies to be of the absolute highest standard. If we are to be seen as a First World country that is dedicated to going really hard against the people who are bringing in drugs, who are trading in electronic data, and who are—heaven forbid—bringing in kiddie porn, or anything like this, then we need to be sure that we not only have the technology but that we are perceived to be First World, and that the bad guys out there know that when they come across the border into New Zealand the odds of them being caught are not 10 percent, like burglaries, but about 99 percent. Let us face reality. People are always going to get through our borders with contraband, illegal stuff, or information that we just do not want in this country. However, if we are really that good—and I believe we are and I believe that this legislation goes a long way to getting us there—then let us form an international reputation of having some of the strictest but fairest border controls in the world.

I looked through the departmental disclosure statement and there are some points in here that will be hotly debated by the select committee—I have no doubt about that. For example, under the title of “Privacy issues” there are a number of points that I know, as a country, we need to be sure are in place but not used to abuse the system. For example, this bill, according to the statement, does create, amend, or remove the provision relating to the collection, storage, access to, and the correction, use, or disclosure of personal information. This bill does contain provisions that could result in the compulsory acquisition of private property. This bill does create or amend decision-making power to make a determination about a person’s rights, obligations, or interests that are protected at the moment by another law, and this could have significant impact on those rights, obligations, and interests. It is acknowledged that this is what the bill will do.

But I also note that the Privacy Commissioner has been consulted about these provisions, certainly in the development of this piece of legislation. But the most important thing—and a number of other members alluded to this—is not just that we understand the Privacy Commissioner’s report, not that it is made available, but that the Privacy Commissioner and the staff from the Office of the Privacy Commissioner are able to be quizzed just to understand their concerns. There is no doubt about it: every time the rights of an individual are compromised in some way, shape, or form, there has to be a good reason why that is done. This bill does do that, but looking at the legislation, looking at where we were, looking at where we want to be, and looking at the future—let alone the present—this is a very important piece of legislation that I think is really going to add to our border security.

I look forward to it passing through the House, but I also look forward to a number of the concerns that members have with regard to this. Thank you very much.

Bill read a first time.

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