Customs and Excise (Tobacco) Amendment Bill

If I may, I would just like to ask a few questions because I think they’re significant. I hope that the Minister might be able to deal with them as we go through. That’s why I took my point of order to just seek clarification about the procedure.

At end of her speech in the first reading—she spoke, obviously, moving the first reading, but at the end of her speech at that time, the Minister made the comment that she’s confident this bill will deter smuggling of illicit tobacco. Now, that’s clearly the whole purpose of this bill. And I do think it’s important, therefore, that both this committee and the country as a whole have a very clear understanding of how she anticipates that that will occur. Because if we don’t have that answer you’d have to ask why on earth we’re considering this bill at any stage, certainly under urgency.

I stress that I am supportive of it and I’m certainly supportive of its objectives. But we need to hear from the Minister clearly how this particular bill will deter smuggling. I’ve made the point before—and I will continue to make it—that career criminals and smugglers don’t stand in an orderly queue and apply for import licences. They don’t go through the permitting system that law-abiding people do. So unless we can be advised as to how it’s going to work, it’s hard to feel a great sense of confidence that it is going to work. So I’d invite her to answer that question now if she wishes to. Otherwise, I’ll move on and—looks as if she’s not going to.

I have another question that I’d like to ask. We’re told that in the event of tobacco products being seized and destroyed in error by Customs, those who, effectively therefore, did have a permit to legally import tobacco will be entitled to compensation. Now, given the severity of the fiscal crisis this country faces at the moment, I don’t think that any of us want to see a single dollar of taxpayers’ money being wasted. And while we are probably only talking fairly small sums, nevertheless the idea that compensation might be paid is one that would cause concern if it shouldn’t have happened. So the Minister needs to explain to the law-abiding, hardworking taxpayers of this country how they may have confidence that they won’t be footing another bill for mistakes that are going to be made at a time when for the foreseeable future, perhaps even for the unforeseeable future, each and every one of us has an enormous debt to repay. We don’t want to be wasting a dollar of taxpayers funding. I’m keen to allow the Minister a chance to answer that question.

CHAIRPERSON (Hon Anne Tolley): Well, you’d have to sit down for her to stand up.

I’m happy to do that.

Just to make sure—because the Minister wasn’t present when we’ve been trialling this through the appropriations debate. So what we had was essentially a conversation, a bit like supplementary questions where a question could be asked of the Minister. You don’t have a five minute speech, and the Minister can choose to answer that or collect a few questions. But it worked really well when the Minister answered—just got up and answered it—and you had a bit of a conversation about the bill. It’s entirely up to the Minister. But it certainly was the reason that the sessional order was passed—to allow that to happen.

So the question about compensating for when cigarettes or tobacco leaf is taken and the person actually had a permit, and then for the taxpayer to compensate for that—I have a lot of faith in our customs officials. I know that they will ensure, as much as they can, that they will only seize and destroy cigarettes and tobacco leaf that do not have a permit.

On the issue of why we are so confident that this particular regime will address illegal cigarettes coming through in the international mail centre, well, they will actually be able to destroy these cigarettes in a much more efficient way. I do not expect that organised criminals, who we know are the main people that are using this way of smuggling cigarettes into New Zealand, will suddenly go and get a permit to be able to do the illegal smuggling of cigarettes over to New Zealand.

However, the fines and the penalties that this particular legislation has: so for an individual, the maximum penalty is $5,000; for a body corporate, the maximum penalty is $25,000 for sending through cigarettes illegally in this way. This may not be the nirvana of dealing with this particular issue, but it is one way of dealing with it, because we are seeing so much of an increase of cigarettes coming through. When you look at the difference between just 2016 and 2019, at the huge number of cigarettes coming through—over 352 percent increase of cigarettes being sent through the mail—we’ve got to actually come through with legislation to stop that. When I said earlier on that this is something that should have been done much earlier on, I wasn’t just referring to our particular Government; I was referring, actually, to the honourable Minister Tim Macindoe and the National Party. When they were in Government—nine years—they could have done something to address this issue. We are doing it now, and this is a good bill to ensure that we stop helping or stop the illegal importation of cigarettes through the international mail centre, because we know there is a black market, and we know we must address organised criminals from doing this.

It is a little bit disingenuous of the current Minister, Jenny Salesa, to suggest that this was a problem of constant duration through the nine years of the previous Government. It was not. The rate of importation, or smuggling, of illicit tobacco increased significantly in recent years—yes, towards the end of our time in Government—and it has continued to do so. It certainly wasn’t the problem that we now know a decade ago. And so it’s wrong for the Minister to suggest that.

Could I just pick up on the comment that she made that this will enable a much more efficient destruction of the illicit tobacco. I’d be interested in her description as to how that will occur, and what is inefficient about the destruction now, and also—particularly with the climate change Minister here—I’d be interested to know will we suddenly see career criminals and smugglers watching a great bonfire of illicit tobacco, because I don’t think the climate change Minister would want to see the emissions that would cause. So how does the destruction occur—how will it occur? My hope, because I’m actually a keen recycler and composter, is that the products will be composted or mulched—mulched and then composted might be good—but in a way that is environmentally safe. I would be interested to hear her answer.

When I referred to seizing cigarettes and tobacco leaf and destroying it right away, what I meant was—and I used an example in my first speech where, in just a couple of weeks in August of last year, 2,086 packets of cigarettes were seized. And just with the 2,086 packets of cigarettes, Customs actually spent a total of 90 days—90 days—to record seizing the tobacco, as well as storing it. And then, because we allow people to be able to claim, to be able to come through, and even appeal the decision of the Customs chief executive officer, this would, basically, mean that Customs does not have to do that—it doesn’t have to spend that much time for a period of two weeks of this many cigarettes coming through the international mail centre, so that Customs officers can get on with ensuring that other illicit drugs like meth don’t come through the border, and also that they can make sure that as we deal with COVID-19—because they are at the forefront of dealing with COVID-19—they focus their energies on that. Thank you, Madam Speaker.

Parts 1 and 2, Schedules 1 and 2, and clauses 1 and 2 agreed to.

House resumed.

Bill reported without amendment.

Report adopted.

Third Reading