Customs and Excise (Tobacco) Amendment Bill

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

This bill introduces new import controls to combat smuggling and unlicensed manufacture of tobacco. Questions have been raised from the other side as to why we’re doing this under urgency. The original plan for this particular legislation was to have it passed under Order in Council in March, but then COVID-19 happened, and that was not the path that we actually could take. However, one of the things that we know is that it is Customs officials at the border that help to ensure that our border is kept safe.

One of the issues that was raised by the member Simon O’Connor was, “Why not give more resources to Customs staff so that they can do this work?” I can say that our Government did. Our Government invested $50.6 million in the Wellbeing Budget, and that was, essentially, to have more staff at the Customs end to ensure that they are dealing with illicit drugs. But what we actually saw—and the Hon Tim Macindoe spoke about this when he gave his speech—is that there was such a huge increase of illegal cigarettes coming through and tobacco leaf coming through, especially in the international mail centre, that even though we increased the staffing resources at Customs, it wasn’t actually spent in what we originally intended for them to do, which was to focus on meth and illegal drugs coming through our borders. They were, instead, spending so much of their time in intercepting cigarettes and tobacco leaf that was coming through. That is why it is important to actually pass this legislation under urgency.

The other reason is that if we were to introduce this legislation in the normal way—introduce it and then send it through to the select committee—we might see what has happened in other jurisdictions, where you give the indication, and because it is mainly organised criminal groups that are using this route to smuggle cigarettes and tobacco products through they will, within that time, probably increase their illegal smuggling of cigarettes, and that would not be of any good to any of us.

Can I also say that we also want to ensure that our Customs staff do not waste their time at the border dealing with cigarettes that are being sent through in this way. Also, the new seizure and destruction process that this bill introduces for tobacco and tobacco leaf will substantially reduce the costs of processing, as well as storing, illegal tobacco products and leaf that are coming through Customs.

We know, as well, that in terms of our Smokefree 2025 goal of ensuring that we save people’s lives, a report that was commissioned in 2018 that Ernst & Young wrote, one of the quotes that they said—and this was actually into tobacco excise increase—and I quote, “increasing the price of tobacco continues to be the single most effective tool for reducing tobacco use.” It also is worth noting that the last four excise increases for tobacco were all actually legislated for by the previous National Government.

This is a really good bill. It is one that should’ve been introduced ages ago to actually ensure that we don’t have that loophole where people are sending through cigarettes via the international mail centre. I commend this bill to the House.

I want to agree with Minister Salesa, who’s just taken her seat, that this should have been introduced a while back. I pointed out in the first reading, before I was somewhat rudely interrupted four times, the regulatory impact statement—in other words, the Minister has had this bill since November last year. So I have to reiterate in the second reading speech, why do we have to do it under Budget urgency?

I’d love also at this stage, at the second reading of the bill, to reference the select committee report, the fact that we brought major importers of tobacco in. Obviously, we couldn’t bring ipso facto the illegal people in, but would love to have done a select committee report, and I’d like to reference it now. Oh, that’s right; we don’t have one. We’re rushing this through the House. I want to point out too to the Minister, who has quite rightly—and, look, I actually respect the Minister as a person and in her role. I think she does a good role in Customs. But she pointed out the extra money that was given to Customs—that was the last Budget. This current Budget had not effectively given Customs any more money, and I’m shocked, as we think about the primary vector for COVID being the border, that no more money’s been done. In fact, we’re wasting our time, if you will, or wasting this Parliament’s time racing this through.

My final point in this emotional second reading speech is to point out, as I did in the first reading, that we are looking at more and more people becoming unemployed. I just want to point out to the Minister that as we considered her Customs bill, another three to five New Zealanders have lost their jobs in the time it’s taken me to share these words. And I personally think that this really is a Budget that’s going up in smoke.

I was hoping that the member might have run out of puff. I call Clare Curran.

💬 Hon Clare Curran: Madam Speaker—

I called you.

Oh, thank you, Madam Speaker—sorry, I didn’t hear. Look, I just want to make a few more remarks on this bill. I heartily agreed with Ron Mark earlier in the first reading, who said that that this should’ve been done 15 years ago. The Minister of Customs has set out the fact that this legislation was to be introduced in March but COVID-19 has impacted on that, as it has on all parts of New Zealanders’ lives.

I can’t see that anybody in this House could disagree that safe borders are critical to our current fight against COVID-19, that the sheer amount of time and energy that’s being wasted on the work that needs to be done to seize illicit tobacco is wasting the time of our border officials, whether that’s directly on the border, whether that’s through the New Zealand post system, and that this—again, counter to what for one member, the member for ACT, seems to be a constant theme that it’s all about bureaucratic hurdles—piece of legislation actually provides for a simplified seizure process. So it’s a much simpler process that will actually make it easier to bring in these controls. This bill is about cracking down on illegal activity at our borders. It’s not just about safe borders; it’s about confidence in the safety of our borders, which is a really, really important thing at this time, and I do hope that the members across the House agree with that, that New Zealanders can feel confident about our safe borders. So, you know, with that, I heartily commend this bill to the House. Let’s just get on and do it.

Yes, of course, all members of this House want to have confidence in the security of our borders. But the fact of the matter is that there are many ill-doers out there who constantly want to breach those borders. I mentioned in my first reading speech that, as a former Minister of Customs, I am acutely aware of not only the nature of this problem but also the increasing nature of this problem. It is, therefore, something that we do need to tackle with seriousness—and everybody has been tackling it with seriousness. Where there has been incredulity and a degree of cynicism on this side of the House is in the fact that we are dealing with this particular measure under urgency and, in particular, with the suggestion that it’s going to make a huge amount of difference.

For a former police officer and a former secretary of the New Zealand Police Association to stand up in this House and tell us that this bill will solve the problem, because suddenly smugglers and those career criminals are all going to stand in a queue and apply for an import licence—beggars belief. It is absolutely gobsmackingly stupid, and I cannot believe that I heard such nonsense not only from Mr O’Connor, but from some of his colleagues.

💬 Hon Members: Greg O’Connor.

Mr Greg O’Connor. He had a flick at me, so I’m having a flick straight back. That was one of the most naive, misguided, stupid things I’ve ever heard him say.

In the explanatory notes that I’ve received about this bill, we’re told that any importation without a permit or that is not in compliance with the conditions of the permit would be subject to forfeiture. That’s great; that’s absolutely as it should be. It’s absolutely as it is, it’s as it always has been. And it is exactly what the men and women—those very fine servants of our nation who work for the New Zealand Customs Service—do day in and day out, and they do it incredibly well.

If this bill will help, of course we support it. But the fact of the matter is, it will not slow the importation of illegal products across our borders. Drugs, tobacco, and other things that smugglers can make money out of will continue to come across. So for the Hon Clare Curran to talk about confidence in the security of our borders is pie in the sky stuff. We have a very good Customs Service, we have very good Ministry for Primary Industries officials who are doing great work, but there are a lot of people out there wanting to undermine that work and to breach our borders. So anything we can do to enable them to do that fine work has my full support, but the idea suddenly that we’re going to reach nirvana as a result of this bill is absolute nonsense.

Bill read a second time.

In Committee