Customs and Excise (Tobacco) Amendment Bill

I move, That the Customs and Excise (Tobacco) Amendment Bill be now read a first time.

The purpose of this bill is to combat tobacco smuggling and to secure Crown revenue collected from excise on tobacco. Governments of all stripes have used excise on tobacco as one tool to tackle the negative health impacts and costs of tobacco consumption on individuals and our society. This is significant, at approximately $2 billion in tobacco excise being collected in 2019-2020. But smuggled tobacco is part of an increasing black market to evade excise, and current smuggling patterns are undermining the effectiveness of border controls. This bill will combat tobacco smuggling through imposing import controls over tobacco products, over tobacco leaf, and refuse. It will require anyone importing these goods to hold a permit and will provide for an expedited and cost-efficient seizure and disposal process for tobacco imported illegally without a permit.

Tobacco smuggling has become increasingly problematic in Aotearoa New Zealand. Interceptions of smuggled cigarettes at the border have increased by 352 percent between 2015 and 2019. Interceptions in 2018 were 53 percent higher than in 2017. In the last 12 months customs has seized illicit tobacco products representing $10.8 million in excise tax forgone. Customs also suspects that tobacco leaf being imported legitimately through the international mail service, being operated by New Zealand Post, is later being manufactured illegally in New Zealand without a licence in order to avoid paying excise on tobacco leaf. This has increased from 150 kilograms in 2016 to 5,000 kilograms in 2019. Based on these numbers, about $5 million in excise and further GST was lost in 2019 alone. Lost revenue not only affects the Government’s ability to support and provide services to New Zealanders; it also undermines law and order objectives and effectiveness, as well as that of the Government’s Smokefree 2025 goal, which is aimed at saving lives.

Both the smuggling of tobacco products and importation of tobacco leaf have grown rapidly over the last 12 months to 18 months, and there is no reason to think that this will not continue. Organised crime is involved, often using the same techniques as in illegal drug smuggling. Large amounts of money are being laundered.

While some very large shipments of smuggled tobacco have been intercepted in sea cargo, tobacco is also being smuggled through multiple postal items. This technique requires a different response, the response that this bill contains. The existing border controls and processing system and its legislative framework are not designed for the high volumes of illicit tobacco that are now being seen, especially in our international mail centre. Customs does not receive information about international mail in advance of importation, so it cannot undertake the risk assessments prior to these goods arriving as it can with goods being imported through other pathways such as courier. It ties up significant staffing resources and forces customs to store consignments it knows will never be able to be claimed, and to chase payment from professional smugglers who are never going to pay, even if they could be identified.

In the middle of a global pandemic, when the brave men and women of the New Zealand Customs Service are required at the border to keep New Zealanders safe, it is wrong to be diverting precious staffing resources to process illegal cigarettes that will never be claimed. For example, 2,086 packages of cigarettes were intercepted in the mail stream in two weeks—two weeks—during August 2019. Customs officers were required to spend 90 days of their time to carry out administration to record, to legally seize, to store, and, eventually, to destroy these goods. This reduces the staffing resources available to locate and seize illegal drugs like meth and other prohibited items hidden in international mail, and it significantly delays the passage of legitimate goods through the international mail centre.

If customs stops the goods, it makes financial sense for the importer to abandon the importation and try again at another time or through another channel. Losing a $2 pack of cigarettes means nothing to many of these importers but wastes the valuable time of our customs officers. This bill will change that. Anyone importing tobacco or tobacco leaf will first need to get a permit. This will provide customs with advanced information to assess the bona fides of importers and to support follow-up revenue. Permits will not be available for imports through the international mail service. Tobacco must be imported using a freight forwarder, the fast freight courier system, or bulk sea cargo. This aims to shut down the widespread use of international mail to smuggle tobacco and evade excise. Combined with the simplified seizure process, this will enable customs to deal much more effectively and efficiently with any tobacco that continues to be posted. Knowing any imports of tobacco products, tobacco leaf, and tobacco refuse identified in the mail will be seized and destroyed will deter the importation through that route. In the unlikely event, though, of imported tobacco products and leaf and refuse being seized and destroyed in error—for example, when the person had a valid permit to import—the importer will be entitled to compensation for the customs value of the goods.

With this bill having highlighted how tobacco imports are undermining the system, it is very important to take urgent and swift action so that there is a limited opportunity for it to get worse, especially in relation to tobacco leaf. Given the involvement of organised crime, money laundering, and circumventing the smoke-free controls, urgent action is required. This bill is not about making the system harder for compliant importers or legal purchasers of cigarettes.

For our people who are smokers—and I do encourage you to seek help to quit—and normally buy your cigarettes from a dairy or service station, nothing will change for you. No one buying legitimate products will see any change, as the permit system will have no impact on the availability or price of legal tobacco products. Also, it is important to note that international passengers bringing tobacco in with them will not be affected, as the current passenger duty-free concession is unaffected by this bill.

Customs officials have worked hard to ensure established compliant importers will be transferred to the new system with no disruption to their business, and for there to be no impact to smokers of legitimate imported product. For established importers, there will be no change at all for the next year. Customs will issue them with a multi-use permit lasting for a year or until their manufacturing licence needs to be renewed. For those importers seeking a permit, the process will be simple, quick, and free of charge—I repeat: the permit is free. I am confident that this bill will achieve its objective: deterring smuggling and protecting Crown revenue. A similar system has been introduced in Australia, and it is proving to be very successful. I ask Parliament to support this bill. It will come into force on 1 July, and it will deter tobacco smuggling without imposing undue and unfair costs on our legitimate importers. I am pleased to commend this bill to the House. Thank you, Mr Speaker.

Thank you, Mr Speaker. Due to the fog of war—the smokescreen, if you will—I won’t declare the National Party’s hand till the very end. But I’m struck that this House, sitting on a Friday in Budget urgency, facing, arguably, what the Prime Minister and Minister of Finance and others have put forward as the greatest crisis to this country in one hundred years, and what—

💬 Hon Member: Unprecedented.

Unprecedented—which, in fact, as a lover of the English language, I’m almost losing the will to live, because that’s been used—“in unprecedented times”. In the most crisis-driven time of our country, supposedly, in a moment where we are spending tens of billions of dollars, the Government has decided that a minor tweak to the Customs and Excise Act is what this Parliament needs to focus on. I can’t fathom it. I’ll come, honestly, to the nature of the bill and what it’s going to do and what National thinks of that, but I am struggling to reconcile in any rational or meaningful way—

💬 Hon Member: They’re not rational.

—why after a Budget day, a Parliament—

💬 SPEAKER: Order! It’s not fair to say that about the member.

Oh, I see. He may not have been implying the member—who knows. But it makes absolutely no sense that this Parliament is in urgency hours after a Budget, as I say, which is going to put this country into enormous debt for generations, and feels that the most important thing it needs to focus on is two minor tweaks—now, I want to stress that again: minor tweaks—to the Customs and Excise Act.

As context, we know—actually, in the course of this speech, statistically, between three and five New Zealanders are going to lose their jobs. I’d better be clear: that’s not because of my speech. But if we divide about a thousand jobs—

💬 SPEAKER: Well, I’m going to warn the member now. He’s been going for two minutes; he hasn’t actually touched on the substance of the bill. And it won’t be because of his speech, if he continues like this.

OK. Well, the substance of this bill, of course, is tobacco. What is this bill trying to do? Firstly, it wants to put forward import licences. What it’s really going to do is enable the big players to be the sole players in this market. And I don’t say that with any love of those who are bringing tobacco in illegally—it’s a growing problem. But an import licence is going to be required, and, importantly, too, within that import licence, a promise not to use the postal stream. Why that’s important is, pretty much, unless you are licensed to bring tobacco in—in, effectively, a giant container—any other tobacco coming into the country will be seized. Importantly, cigars are exempt, and that’s not an advertisement for cigar smokers, but that’s exempt. And probably important for those who appear to like the tobacco leaf, you can still get your—whatever the rule is at the airport; you can get how many of the cigarettes you need.

The second part to the bill, which follows up, is that, basically, now customs can seize whatever it deems illegal, destroy it immediately, and only compensate you if the person can prove that they were legitimately to have it. The Minister sort of explained some of the dynamics. The current system, I think—and if people are listening into this, again, as they have lost their jobs and are sitting on the couch wondering about their future and what the Government is offering them. What they’re offering them is a change to the process that if they bring in illegal products, as you do at the moment, you get sent a notice by customs, you’ve got about seven days to appeal, and customs has to hold on to it. The sheer volume—and the Minister did touch on this—of tobacco is filling warehouses. A little tongue-in-cheek and a little darkly, perhaps it’s actually good for the warehouse companies to have something in them, because, again, the Government’s offered absolutely nothing in this Budget to help them. But, fundamentally, it’s going to be tossed out—

💬 SPEAKER: Second warning—the bill.

Let’s see if we can go for strike three, then. So, fundamentally, we have a bill which does so very little. Importantly, when one looks at the regulatory impact statement, it came out in November last year, and I think it’s incredibly important that we in Opposition ask the Minister why it has taken to Budget day 2020, in the midst of the greatest crisis in a hundred years, to push it through now. This was planned and decided upon in November last year. Again, those who want to—

💬 Hon Member: All of a sudden, it’s urgent.

Now it’s urgent—now it’s urgent. As I say, we need to acknowledge customs themselves. They do a great job. I’m very conscious—and again, to echo the Minister’s words, customs does a very good job intercepting. But if you look at all the things that could be done, is this really what customs needs? Because when I talk to customs, what they want is more ability to intercept at the border. So it’s all well and good that we’ve said, “Oh, we’re going to.”, but I’m a little confused at why there is not more money announced to enable them to intercept tobacco coming into the country, be it the new technologies that can be deployed to detect it, and, in fact, more staff that’s needed. We are going to see, in this customs and excise space, a lot more product in general coming into the country. If we want to meaningfully and quickly intercept it, as this bill intends, then why is there actually not money and support for that? I think the priorities are completely out of whack.

The last thing I have to note around all of this is the glaring, continued contradictions we have from this Government around tobacco and other drug products. Here we are, again, in Budget urgency, at 10.30 on a Friday morning, putting through these two minor tweaks to make it more difficult to—and rightly, I would say, you know—stop illegal tobacco. Yet we have a Government that’s promoting cannabis use, which makes no sense at all.

Chlöe Swarbrick: Ha, ha! No, we’re controlling it.

So it really makes no sense at all. It’s one of those glaring contradictions. [Interruption] Children will mock this sort of thing and can’t get their rational heads around it—that’s childishness. Most adults can understand what is a glaring contradiction. So we’ve had a Government keen on making sure you can have 30 or 40 whatever you call cigarettes of cannabis, and yet here we are wasting the Parliament’s time around this—

Order! Order! The member will resume his seat.

The member who just resumed his seat, Simon O’Connor, talked about losing the will to live. I’ve lost the will to live after listening to about seven minutes of his speech, and I would suggest that that member reads the bill if he wants to understand what this is about. Or I’ll outline it for him.

The problem that this bill is seeking to address is the fact—

💬 Dan Bidois: What is the problem?

Let me tell you, Mr Bidois. The interceptions of smuggled cigarettes at the border has increased by 352 percent between 2015 and 2019, and that member who has just resumed his seat talks about warehouses that might want to stock illegal products. That is horrifying, let me tell you. Interceptions in 2018 were 53 percent—

💬 SPEAKER: Order! I’m going to interrupt the member early and repeat a ruling I made on an earlier debate. The fact that a member has previously brought in an irrelevancy does not make it relevant to be replied to. And I ruled that what the member said was not relevant.

Sure, Mr Speaker. I wouldn’t want to make my speech irrelevant as a result. Interceptions in 2018 were 53 percent higher than in 2017. This is a growing problem. In the last 12 months alone, customs has seized illicit tobacco product representing $10.8 million of excise tax that was forgone. Those are the two issues that this bill tries to combat. I think it’s pretty clear, if only that member had bothered to read the bill.

Now, the way in which this bill will address that problem is to impose import controls over tobacco products, tobacco leaf, and refuse—very clear. It requires anyone who’s importing these goods to hold a permit, and it will ensure that very quickly and in a cost-efficient manner, there will be seizure and disposal of that product that is imported illegally and without a permit. That’s pretty much what this bill will do. It addresses an industry that is illegal and growing in New Zealand.

I just want to make one more point before I take my seat, and that is to assure those who may be hooked on cigarettes that the Minister has made it very clear that if they would like to seek some help to quit, there is that help available. However, people who currently buy their cigarettes from the local dairy down the road need not worry that they will be affected by this bill, because they won’t. No one buying legitimate product in New Zealand will notice any change, as the permit system will have no impact on the availability or the price of legitimate tobacco product, Mr O’Connor. And so that is the crux of the bill. That is what this Government is addressing through this bill. It’s a good bill and I commend it to the House.

Thank you, Mr Speaker. The issue that this bill is tackling is a very serious one for our nation, no question of that. I speak in this debate having been the last Minister of Customs in the previous National-led Government, and it is a fabulous portfolio. I want to pay tribute to the outstanding work of the men and women of the New Zealand Customs Service. It was a great privilege to be their Minister, and I saw them tackling this very issue during my time as a Minister when I visited customs facilities around the country. I acknowledge that the Hon Jenny Salesa will have done the same, and that will be, in part, what is motivating her to bring the bill to the House this morning.

Of course, it’s a bit of a revolving door portfolio for the current Government. The Hon Jenny Salesa is already the third Minister to hold the customs portfolio, so I imagine the Customs Service are waiting to see who their next Minister will be after the change of Government on 19 September.

💬 Hon Member: Tim Macindoe.

I would love it to be to Tim Macindoe. I would really be delighted to pick up the portfolio again. So I do hope that my leader is listening and that I’ll have the support of my colleagues.

Let me just repeat, though, that this is a serious issue that is being tackled right at this moment by dedicated professionals working for the Customs Service. I can be pretty confident that somebody working for the service just in the last hour or so has probably detected illicit tobacco coming in, because it comes in in the most bizarre ways, often very crudely disguised in heat pumps and other appliances, in ornaments, and all sorts of bizarre packages for the reason, as the Minister noted, that they just rely on being able to get some of it over the border. A huge amount is detected because our Customs Service people are very good. They are great professionals, but you also have to sympathise with them for having the odd fist pump when they detect another of these packages, because when they are having to scrutinise huge volumes of packages and other sorts of things coming through the service, every so often to realise that they have detected another illegal importation—often it’s drugs, not necessarily just tobacco. They are doing great work for our nation and, in many cases, saving lives. The motivation, of course, for the smugglers to try to get the tobacco into our country is that they can do so at a dirt cheap price. And I don’t know because I don’t smoke tobacco, and I certainly don’t try to make contact with illegal smugglers, or—

💬 Hon Jacqui Dean: How do we know that?

How do we know that? You’ll just have to take my word for it, the Hon Jacqui Dean, but I appreciate that vote of confidence.

The point I’m making is that those who are receiving these packets of cigarettes around the country—and there’ll be many of them—are knowing that they can buy them for a very cheap price, and they probably flick them on making good profit. So it’s all about profit on volume. Even if, goodness knows, 60 percent, whatever it might be, is forfeited, they can still make a profit out of it.

So it is a serious issue, but it isn’t an issue that is going to rebuild our country. It isn’t an issue that is going to create jobs, and, at a time of the greatest fiscal crisis this nation has ever faced, it is utterly extraordinary that this is a measure that we are being asked to consider through all its stages, because not a single job will be created out of it. Yes, some illegal activity may be stopped—although I’m going to be asking some questions of the Minister during the committee of the whole House stage as to how exactly that is going to be achieved.

For now, I will simply say I welcome the measure. I’m happy to confirm my support for it because I’ve seen the problem firsthand through the privilege I’ve had of having been the Minister of Customs. But I am utterly bewildered as to why this measure is being considered under urgency, as we should be looking at measures supposedly related to a Budget that is all about rescuing our economy, trying to secure job growth, trying to save businesses, trying to save jobs for people, trying to save their livelihoods. This bill does none of those things.

Thank you, Mr Speaker. It’s really interesting—we had a saying in Waiōuru that if you got posted there and you stood still and you never moved from there, eventually you’d get to meet everyone in the New Zealand Army, because everyone transits through Waiōuru; likewise, Parliament. In my 20-odd years here—it’s been rather curious. I look at this piece of legislation—tobacco, tobacco smuggling, excise duties—and I can recall these debates going back. In 2002—I think around 2002—at the time when we first started this discussion about smoke-free New Zealand and excise duties and what it was going to do, there were predictions made.

In fact, I recall trying to highlight the issue of tobacco smuggling back then. In fact, at that time, I came across an interesting chap who’d spent some time in prison. He had embedded himself inside a certain sector of the Auckland community, which comprised a lot of foreign students who were making an absolute killing importing illegal tobacco; and, by the way, CDs, and, by the way, producing fake drivers licences—very bright, brilliant young people who were doing very well on the black market. Trying to raise the issue of what raising excise duties would do in exasperating the black market tobacco problem just fell on deaf years. I remember those debates in the House—nobody wanted to accept it. Everybody was focused on the purity of a smoke-free New Zealand, and it’s interesting hearing the comments about it.

So I come to this bill—the bill is about combatting tobacco smuggling. My point is that it’s pleasing in 2020 to finally see some legislation aimed at combatting tobacco smuggling—finally doing that, the same as illegal growing of tobacco as well. But why is New Zealand First supporting this piece of legislation? We know, from the Minister’s documents, that Crown revenue for tobacco excise was about $2 billion last year—excise duty on tobacco about $2 billion. Now, that’s a result of the National Party and the Māori Party doing a deal and escalating excise duties. The one thing that was going to happen as tobacco prices increased: it was going to create a supply/demand challenge and an opportunity for increased smuggling, and that’s what we saw. One of the other predictions was that we’d see more dairies being robbed. We predicted that, and that came to pass. We are dealing with that now.

This piece of legislation attacks the problem of smuggling. It creates a permitting regime so that anyone importing tobacco, tobacco leaf, has to get a permit—tick for that. We agree with that. It removes the ability for people to import tobacco through the international mail service—tick, we agree with that. It creates a simplified seizure process. Anything that can simplify the processes there and allow customs to destroy the product as quickly as possible, we agree—tick for that. It won’t have an effect on the vast majority of people who purchase their cigarettes legitimately—tick for that. It won’t affect people bringing in their allowance of tobacco through customs when they arrive back from their holidays in Australia—tick for that; we agree with that.

It will impose import controls over tobacco products; we’ve already said we agree with that. So, essentially, as we go through the advantages of this piece of legislation, New Zealand First can only say this is aimed and targeted correctly. It’s probably just about 15 years late, but hey, we’re here under urgency, so let’s get it done.

Mr Speaker, thanks very much, and it’s a pleasure to be back in the House here, again, for the post-Budget debate. As yesterday’s Budget alluded to, we’re in desperate times, and we’re heading into some dark times for our economy, certainly. This morning, I received a message from a constituent with a family of five, and the husband’s losing a job. She’s worried about herself being made redundant. She asked me “What’s in the Budget for me?”, and I had to go back to her this morning, saying—

💬 SPEAKER: Well, the member’s now going to talk to the bill.

Yes. So—

💬 SPEAKER: He might get another chance to speak to the Budget.

Absolutely. So the point of what we’re getting at today is that there’s a lot we agree with in this bill. As my colleagues have alluded to, we are supportive of this bill and the intent of this bill. What we’re talking about here is that we are on a matter of urgency in the House, we’re on a matter of crisis in our economy where the public of New Zealand are facing, quite frankly, substantially more tough challenges, and here we are talking about plugging a $10 million hole.

I mention this because yesterday the Budget announced that we are in a substantial deficit for the next 10 years. We’re looking at Budget deficits for the next 10 years or so, and public debt will be going well to the north of $54 billion. So my question and the issue that we have—

💬 SPEAKER: Second warning.

—today is around the relevance of bringing this bill into urgency, because, as I said, we agree with the substantial matters of this bill, but there is a time and a place to be discussing this. Should that time and place be the day after the most significant Budget of our lifetime—and, no doubt, the most significant Budget in my career as an MP? And that is what the point of our discussion today is about.

Let me talk about the bill, because that’s what we’re here to talk about. Of course, this is about import controls and permits for illegal importers of tobacco, and, again, credit to all those at the Customs Service. They do a fantastic job at this time, but what is the message that we’re sending to the wider public at this time? When there’s job losses, when the confidence of business is at an all-time record low, and when support for small and medium sized businesses is scant, here we are discussing, essentially, a bill that is going to be putting $10 million back on to the Government’s books. So—

💬 SPEAKER: When I stand up, the member sits down, and it shouldn’t take me, I think, for the fourth time reminding the member to come to the bill, for him to come back to the bill. If he offends again, that’s the end of the speech.

OK, Mr Speaker—thank you very much. As I’ve said, we agree with the substantial matters in this bill. It is important to, in fact, crack down on illegal importers. We’re supportive of every aspect of this bill, but the thing is: why do this in urgency? That is the matter that I wish to discuss in this House today, when there are more substantial matters that I think the House should be discussing around the economic stimulus package and the recovery plan, and here we are discussing a bill that has a $10 million implication for the public of New Zealand and for the Government’s coffers.

💬 Hon Member: How much?

$10 million. Ron Mark, the member opposite that just sat down, spoke about the total excise duties of tobacco in New Zealand. It’s $2 billion. So if you divide $10 million back into $2 billion, that’s the scant percent, or the really low percent, of the impact of this law on the Government’s books at the moment.

So I know that we are supportive of this bill and I know that there are aspects of this that are important in making sure that Customs has the powers to regulate this black market activity. But what I’m talking about here is that there’s a time and a place, and is it necessary for the House to come into urgency and to take up the time of members of this House when there are substantially more important matters to be discussed? That is why I raised with you, Mr Speaker, the story of the family in my electorate who are struggling at the moment, because no one is talking to me about the importance of this bill at this time. So—

💬 Hon Member: Except for these people.

Except for these people. It is, quite frankly, disrespectful to the people of New Zealand at this time that we’re here discussing a topic like this—when we are happy to have this discussion—but it is around the timing of that, and whether there are more important and substantial challenges and legislative matters that we would like to discuss. And there are, around the economic stimulus package that was announced yesterday, and there are more important topics around how we’re going to recover out of this mess and how we’re going to reduce the deficit. That’s why we are raising the matters today.

And when I stand up, the member sits down.

E Te Māngai, tēnā koe. Tēnā koutou e Te Whare. I stand on behalf of the Green Party of Aotearoa New Zealand to put, on record, briefly, our position on the Customs and Excise (Tobacco) Amendment Bill, this being the first reading, and our support for it.

I must say the Opposition is spending a heck of a lot of time talking about something they’re saying they don’t want to be talking about. The content of this legislation, of course, does two things, primarily. The first is allowing for stricter control of tobacco importation by requiring a permit or a licence prior to that importation. The second gives a kind of content or function to that mechanism by way of allowing customs to destroy tobacco on seizure, provided that they have first written to the importer.

I think what this bill fundamentally does is showcase the importance of meaningful regulation around a substance. We did have a member of the Opposition, the Hon Simon O’Connor, speaking to how this Government is seeking to create greater regulation around tobacco. But he—and I quote—said that there is somehow a “glaring contradiction” with regard to cannabis. And here I want to draw the opposing members’ attention to the importance of what he has just highlighted, which is that regulation works.

The different mechanisms of regulation—many of which are actually highlighted in this legislation—are, for example, education, particularly education around the public health implications of utilisation of a substance, whether that be tobacco or alcohol or otherwise; also around licensing and regulation of the supply chain, which this bill does; thirdly, around cessation support, which Minister Salesa spoke to; fourthly, around availability, which, notably, this bill does not impact in terms of the availability of tobacco for those who are purchasing at licensed retail outlets; fifthly, around advertising; and, sixthly, with regards to price, which you can change through mechanisms such as taxation.

Inside a regulated model that we have for tobacco in this country, we are able to, as a Government, as a Parliament, pull levers which reduce the use—particularly harmful use—of that substance. And that is exactly the same proposal that is being put forward with regard to cannabis. It would just so happen that the Opposition prefers to continue empowering the black market. Kia ora.

Mr Speaker, good morning. We’re certainly not after supporting the black market. It is my first opportunity to speak after the lockdown. It’s a pleasure to be back in the House. I am optimistic and encourage everyone to be optimistic and courageous going into the challenges that face all of us—all members, everyone outside the House—in difficult times.

As a new MP myself, I have not experienced many opportunities to go through urgency myself, and I’d like to preface my contribution by explaining to the public, many of whom may not be aware of what’s happening here, that we are in a special process where specific bills are moved to be heard and carried through first, second, and third readings to their completion during that sitting of the House. The moving is done by a Minister, and information is provided to the House in consideration of that motion to hear specific bills in urgency. Urgency itself—the word specifies a need for swift action, and that is why we are here. Over the past 24 hours, since yesterday, we have stood and debated bills. I stand to speak on the fourth of six bills, and that is the Customs and Excise (Tobacco) Amendment Bill.

I see that there has been, over this lockdown, a tremendous need for support for the public, and they have come with very many questions, and as we come out of the lockdown we find ourselves ready to leap forward and to embrace the day, and people are actually saying they’re excited to go back to the office. I’ve heard on TV today that people are excited to buy that first cinema ticket. Certainly—

💬 SPEAKER: No smoking in cinemas, all right? Just get back to the bill.

Yes, yes, thank you, Mr Speaker. Well, as my colleague the Hon Tim Macindoe has said, this is a serious bill with serious effects, the object of which is to prevent or to lower down, essentially—to reduce the use of tobacco by making the costs of purchase very high through tax, and that is certainly sensible. The bill seeks to ensure that every person bringing in tobacco is permitted to do so, making sure that everyone who does so is identified and known. So that’s a fantastic thing.

It’s important to note that the departmental report in respect of this bill shows that the smuggling of tobacco products and the importation of tobacco leaf and tobacco refuse to evade tax on tobacco products has grown rapidly in the past 12 to 18 months from a historically low base. Interceptions of cigarettes at the border have increased from 2018 to 2019 by 53 percent. So there is obviously a heightened attempt to avoid the tax and to import leaf and refuse so that cigarettes can be rolled in the country, avoiding the tax on the tobacco products. So there is a need for this.

But I then go to the last portion of my contribution, which says that while there certainly is a seriousness to the object of this bill, it comes at a time when we are in urgency, and my every emotion at coming to Parliament in the past 24 hours has been really to want to see how things can be turned around in a country that is facing a serious economic situation and where thousands of jobs are being lost. I sincerely, in humble observation of the list of bills that have been put on urgency, including this bill, have experienced a sort of a deflation for myself. I thought that this was not something that would help the number of jobs that have been lost and that would not help, really, the amount of money that this Government needs to keep the country moving forward.

I’d like to also just include in this moment a comment, an observation, that the Rt Hon Winston Peters yesterday in a speech poked fun, with indignity, at the loss of jobs of members of this Parliament, when we are, just like everyone out there in greater New Zealand, working hard to sustain our families and to sustain the dignity of our own professional work. And I thought that that had no place.

I end with a big thankyou to the health services and everyone who faced COVID face to face while we were at home and not working. Thank you, Mr Speaker.

Thanks, Mr Speaker. In my brief contribution on this bill, I’ll make the following points. I was doing a bit of research and looking and found an article from Stuff from December last year where Customs national investigations manager Bruce Berry was quoted as saying that 95 percent of his fraud unit’s time had been spent in 2019 investigating cigarette smuggling. I think that’s a pretty telling statistic. We are certainly, this world, this country, facing an economic shock posed by the coronavirus, presenting challenges that haven’t been seen since the Great Depression, and so it is absolutely important that there’s a clear path through.

Customs, as do many other Government agencies, have an incredibly important role to play in ensuring that we are in the best place to get through this crisis. Customs, therefore, needs to be in good shape and focused. What this bill does is combat that particular issue, which is taking up 95 percent of that investigation unit’s time, by combating tobacco smuggling and securing the Crown revenue collected from the taxes on tobacco. Another important statistic is that interceptions have increased by 352 percent between 2015 and 2019. It’s wasting time and resources at Customs, it’s undermining our system, and it’s undermining the Government’s goal of a smoke-free New Zealand by 2025.

If the National Party had some coherence around their arguments, perhaps they could be taken more seriously, but on the one hand, their Customs spokesperson says it’s an incredibly significant issue; on the other hand, it’s making a mockery of going into urgency. Perhaps if they took shorter calls and backed the bill so that we could get Customs in a good place to play their role in this crisis, we could all get this bill finished and get back to the job at hand.

Mr Speaker—or Madam Speaker? Thank you very much, presiding officer of uncertain gender.

Thank you very much for the opportunity to contribute on the Customs and Excise (Tobacco) Amendment Bill. This is the first time, given that Parliament would usually have sat on a Thursday in any case, and today represents the first day that we would have had the opportunity to be out and about in our electorates for many weeks, and here we are discussing this particular bill. It’s a smokescreen. It’s a pipedream. It’s a plan on the back of a fag packet, and the justification is paper thin.

It’s hard to avoid thinking that this is merely a measure to create more breathing room for the Government, and I suggest they start by turning over a new leaf, because they have created more eye-rolling than they have stopped hand-rolling by doing so. This Government knows a thing or two about importing substances from overseas that are dangerous to Kiwis’ lungs. Nevertheless, the basic underlying intent of the bill, as you’ve heard from others on this side of the House, we support, and as such we will vote for the bill at this stage and, I understand, subsequent ones. But, of course, we do note for the record our bemusement at the fact that it has gained such relative priority over urgent matters connected with the coronavirus, and, of course, the Budget that apparently was passed yesterday—or began to be passed in debate yesterday. Thank you.

💬 David Seymour: Madam Speaker?

I understand you missed a call, so is this a split call, or is this—this is a split call.

Well, thank you very much, Madam Speaker. I rise on behalf of ACT in opposition to this Customs and Excise (Tobacco) Amendment Bill. These are extraordinary times when the priority of the Government after a Budget promising to borrow $140 billion is to pass laws making it harder to get foreign investment into New Zealand for distressed companies.

💬 DEPUTY SPEAKER: I have been watching the House and I know the Speaker has been very strict on making sure that we’re talking to the bill in front of us.

Absolutely, and I think it’s reasonable that in the first few seconds of a speech, we set out some context.

💬 DEPUTY SPEAKER: Well, we’re now almost a minute.

The next bill was to register forest traders, and this one is to register tobacco importers. Why? Because people are smuggling tobacco into New Zealand. Well, the obvious problem is that if somebody is smuggling, they are already breaking the law. It’s not obvious why putting more bureaucracy on to those who are following the law is going to affect those who’ve clearly shown they’re prepared to break it from the fact that they’re smuggling at all.

But there’s a wider problem here, and that is: why do we have a black market for tobacco? I borrow arguments from the Greens with respect to cannabis. The Green Party argument with cannabis is that prohibition and bureaucracy doesn’t work and it leads to a black market. Prohibition of cannabis means that the black market and smuggling is worse than having a legal market. The Green Party says, with respect to cannabis, the right thing to do is to legalise it and let people sell it so that the black market goes out of business.

Now, that’s interesting because the reason we’re here today is that the Green Party and Labour and New Zealand First and National all support levels of taxation on tobacco that are as bad as prohibition for so many of the people who wish to consume it. So the Green Party says prohibition doesn’t work on cannabis, but they are prepared to support prohibition-like levels of taxation on tobacco and then support a further measure to regulate tobacco importation that some people might say sounds eerily like the war on drugs.

Why do we suddenly have war on drugs - like approaches to tobacco? Well, because for the last 10 years, this Parliament—and it’s been said, and it’s true, by every party except ACT—has supported putting up the tax on tobacco 10 percent every year. That’s why people think it’s worth smuggling. That’s why we have a black market. That’s why, ironically, even the Green Party is now engaging in a war on tobacco, trying to stamp out the black market their taxes have created.

But that’s not the real tragedy. The real tragedy is stories like one that I saw not so long ago in a supermarket. A seven-year-old girl with her mum at Countdown, and Mum was buying a very small tin of baked beans and a packet of cigarettes that cost $35. You can make assumptions about what was going on, but I could see it. That little girl knew that that $35 was dinner. Successive Parliaments have made people in New Zealand desperate, taken more and more money through tobacco tax out of the poorest households in this country. It has done almost nothing to reduce smoking rates. What it has done is driven the supply of tobacco underground. If this Parliament was serious about dealing with the black market in tobacco, it would take a leaf—no pun—from the Greens’ book and reduce the prohibitive taxation that has necessitated these war on drugs - style controls. Thank you, Madam Speaker.

Madam Speaker, the previous two speakers, speaking about the issue with tobacco, just show that their heads are in a cloud of smoke—to continue the pun of the previous speaker—because this bill is a very simplified process of solving a problem. The very bureaucracy they are claiming it is creating is the very bureaucracy it is removing, and the previous Minister of Customs will be sitting there squirming very guiltily. He had the opportunity to do something about it when he was in power—he didn’t—so no wonder he’s mouthing off the way he is, and his colleagues. So feel very guilty, Mr Macindoe, and just feel relieved that someone is fixing up another one of your problems.

I’ve also heard those opposite, many of whom are out-of-town MPs, concerned about this Budget. I can assure you—one of the advantages of being a Wellington MP—I got to go a Khandallah cafe full of people who may have been supporters—

💬 DEPUTY SPEAKER: I’m sorry to interrupt, but I’ll repeat: we are talking about an excise bill, not the Budget.

Thank you, Madam Speaker. Just reassuring those that may have been concerned that we should have been, perhaps, debating something more close to the Budget. I can reassure them, the good citizens of a Khandallah cafe, some of whom have in the past been supporters of the party opposite, were very, very happy—all owners of small and medium enterprises—very, very happy with the Budget.

💬 DEPUTY SPEAKER: Could we talk about tobacco? Tobacco.

But, Madam Speaker, I will return. The other thing that’s important with matters to do with customs—very important, when you are going to fix a problem, which this bill is doing—is you don’t give the crooks any more notice than they need, because if we put this through the full process, knowing this is coming, they will change their practices. This way will make sure that exactly what we are trying to achieve will be done, will be done quickly—and, again, something that should have been fixed by the Minister of Customs in the previous administration; now another problem solved. So this is a very good piece of legislation. It does deserve urgency at this time to ensure that the crooks, the organised criminals who have now moved into this market, now won’t be able to come up with another way of smuggling their product. I thoroughly recommend this bill to the House, Madam Speaker.