Customs (Levies and Other Matters) Amendment Bill

The part we got to, about this time last week, was the question that the motion be agreed to and the Hon Jenny Salesa’s speech. Thank you.

Mālō e lelei, Madam Speaker, and happy Tongan Language Week. I’ve got to say that it is so good that the Tongan Language Week happens to fall on this week. Usually, we are not in session when we celebrate Tongan Language Week.

As the spokesperson for customs for the Labour Party, it is my honour to be part of this debate on the Customs (Levies and Other Matters) Amendment Bill. On the face of it, when you look at this proposed law, it looks and sounds very reasonable. It is a bill that’s proposed to help the New Zealand Customs Service—and it is the oldest department that we have—to do its role. Customs has been around for close to 185 years. This bill promises a fairer treatment, especially in terms of returned goods. It also covers waste minimisation and GST reform.

When you look closely and when you read this bill clause by clause and understand better the real-world consequences that this bill will have, it becomes clearer, particularly in Part 1 of this bill, that it takes an unusual turn. The Government, through this bill, gives the executive sweeping powers to impose new levies without adequate checks, and we risk the scales being tipped against the very people who can least afford to pay these levies.

What does Part 1 of this bill do? Well, the Minister, through this bill, will be able to amend the Customs and Excise Act 2018 to create an entirely new levy power, because new section 414A, inserted by clause 6, will allow the Government, by regulation via Order in Council, to impose levies on virtually anyone involved in importing or exporting goods. Now, the Minister will probably call this cost recovery, but let’s not sugarcoat it. It is a new taxation power handed to the executive to be executed without direct parliamentary oversight on an undefined group of people for an undefined range of services for an undefined cost. In fact, in new section 414A(2), the bill even goes so far as to state that when Customs actually recovers the costs from those that it can charge these new levies to, it can do so “without limitation”, which is actually quite outrageous. This matters, and it is important because these levies won’t hit everyone equally and it won’t necessarily be fair on all of those who will be affected.

Who will actually pay these new levies? We expect that it would affect small to medium businesses the most. The Government said that it is about making the system fairer, that it is about spreading the cost of managing goods at the border, but what we in the Opposition would like to know is: well, fairer, but for whom? In reality, small businesses, particularly nowadays, especially family-run importers, migrant and ethnic businesses, Māori and Pacific businesses, and traders who are trading on slim margins—and we know that small businesses are finding things really tough right now—are most likely to be the ones who will feel these new levies the most.

A big importer is most likely to be in a better position to absorb another fee, but a small one with small margins, during this time of economic recovery, most probably cannot. Guess what happens next! Well, those new extra levies and costs are most likely to be passed on. They are probably not to be felt by the multi-million, or billion, dollar conglomerates, but if you are a mum buying nappies online or if you are a student ordering your books online or if you’re a senior returning a faulty hearing aid that you ordered online, those are likely to be the ones who will be affected.

Another couple of examples of those likely to be affected by this bill are a Filipino family - owned business in South Auckland who started a small import business a few years ago, bringing in culturally specific products and food items from the Philippines that Filipinos are not likely to find in supermarkets. They are not corporate giants. They probably don’t have a customs broker on call. Now, under this bill, they could face new levies, audit powers, possible fines, and recordkeeping obligations that they themselves did not foresee coming their way.

Another example—and this is an example close to my heart—is a Tongan community group that occasionally exports donated goods or materials or groceries. I was involved in such a voluntary effort. After the tsunami a couple of years ago—this is during COVID times—I and many other volunteers got together. We were based at Mount Smart Stadium. We appealed for, and we were able to get, the support of a lot of small businesses, including import and export folks. We were just a group of volunteers. We did not have any money, so we were asking businesses to donate containers and to donate some of the groceries that would go into these containers. Many of them did. We also, of course, asked Tongans in New Zealand. There are 104,000 Tongans in Aotearoa New Zealand nowadays, and many of them donated. We sent a total of 96 20-foot containers to Tonga, mainly of non-perishable foods and groceries. A group like that is also likely to be caught up in the net of these new levy orders.

Clause 6 and clause 11 of this bill include enforcement provisions that could see people fined or prosecuted simply for misunderstanding the new, complex rules. That’s not necessarily fairness. That could be classed as punishment disguised as a policy. Our concerns are not just about fairness on the ground. I also have questions about good lawmaking. Taxation powers should not be handed over lightly. In a democracy like Aotearoa New Zealand, revenue decisions should be made by Parliament in the open, with full scrutiny. Instead, this bill allows the executive to impose future levies by Order in Council—a process that bypasses robust, democratic debate. The only safeguard is a vague requirement for reasonable consultation. Reasonable consultation—reasonable to whom?

However, let me now turn to the parts that we absolutely agree with, which is Part 2. It amends the Waste Minimisation Act. It is a smart and overdue step forward. It empowers Customs to collect environmental stewardship fees, like the tyre recycling fee under the Tyrewise programme, at the point of import. That is efficient, it is effective, and it reflects the “polluter pays” principle that Labour has long championed.

We also support Part 3, which amends the Goods and Services Tax Act, fixing a longstanding anomaly where, if you return a faulty imported good or receive a warranty replacement, you shouldn’t be taxed again. I want to be clear, though, that we are not against Customs being sustainably funded. We are not against smart cost recovery. In fact, Labour actually supports this bill at second reading, but we have a number of reservations, as I covered. Thank you.

Thank you, Madam Speaker. I rise to take my call on the Customs (Levies and Other Matters) Amendment Bill. The Greens broadly support this bill because it enables three key things. It enables Customs to establish levies to recover costs incurred when undertaking their critical functions. It provides clarification around roles and responsibilities in product-stewardship legislation. It allows GST to be removed in certain cases from imported or exported products returned under warranty. While the Greens do broadly support this bill, I want to speak to some of the wider issues and some of the issues that have been raised by the previous speaker, the Hon Jenny Salesa. I do want to speak about the wider issues and difficulties that we have faced in the customs space and to stress that the enablement of this legislation now is not going to come even halfway close to meeting those challenges.

To the point about the bill enabling cost recovery to undertake its functions, I want to acknowledge all the hard-working Customs officials, both in the front lines and on the back lines, who all play a critical role in protecting New Zealand’s border. From facilitating the movement of people and goods through our borders and also all the essential work that Customs New Zealand carries out, they do a vital and challenging job. We need to acknowledge their mahi and the importance of adequately funding the public services that they provide. To everyone that works in the customs space, thank you for the work that you do. You are appreciated, and you are seen.

Acknowledging the role of our Public Service workers in customs is critical, particularly within the context of the current meth crisis. We’ve seen The Spinoff reporting that meth consumption has nearly doubled over the second half of 2024 and remained elevated in 2025. Now, this is a wider public health emergency that will require coordinated response across Government, with border operations playing a critical role in preventing meth. That’s why the cost-recovery functions are really important. A March report from the Ministerial Advisory Group on Transnational Serious and Organised Crime warned that New Zealand is losing the fight against organised crime as meth seizures reach record levels and signs of corruption accelerate. The group was told by enforcement agencies about trusted insiders at ports and airports helping to retrieve concealed shipments of illicit drugs before Customs inspections. It’s really vital that the cost-recovery functions that this bill will help enable will help deal with some of the critical issues that they’ve raised. They further report that New Zealand is the only Five Eyes country without a whole-of-Government, national anti-corruption strategy and that this has created a significant gap in this country’s ability to prevent, detect, and respond to, corruption risks in both the public and private sectors.

In light of these confronting reports, we do need urgent coordinated action to address this crisis, which this bill will play some small part in enabling. We need critical strategic Government investment, and we need cross-partisan commitment that recognises the scale of the problem and the cost-effectiveness of treating these problems before they escalate further. We need a strategic Government approach that actually addresses these issues. How much has complacency over the past years and successive Governments actually enabled and facilitated the scale of this crisis? Are we too hamstrung by the idea of having to realise short-term cuts to actually focus on investing in wider public services in New Zealand?

Now, this current Government would have the New Zealand public believe that they can make the cuts that they did, on the other hand, in one year and then pretend like they’re not going to recoup the cost of the cuts later, as is enabled through the collection of levies in this bill. It makes no sense to underinvest in border services, then pay for this tenfold through our health services, through our social services, and, most importantly, through the human cost to our communities. I urge this Government to go further than this bill, to listen to the expert advisory group on transnational serious crime, and to get serious about addressing the corruption at our borders, reinvesting in our public services, and to adequately fund the border service to address the scale of the threat we face. I acknowledge the Government has made some moves towards refunding the service in the previous Budget.

To move towards technical points around this bill, I note that any move towards fuller cost-recovery through this bill doesn’t come without costs. In their submission to this bill, the Customs Brokers and Freight Forwarders Federation of New Zealand acknowledged that levies are seen as a more flexible and fair mechanism compared to fees but that the imposition of new levies could disproportionately affect businesses already facing increased compliance costs and global economic pressures. It is a tough environment out there for people in New Zealand, particularly for importers and exporters, which is why we need to be thinking strategically about where we place public resources and to be upfront where tax cuts and costs are being kicked down the line.

The Customs Brokers and Freight Forwarders Federation of New Zealand also say in their submission that the lack of prior consultation with stakeholders is a critical shortfall. This is a criticism specifically about this Government’s approach to the bill, but also, more broadly, it could be applied to the wider problem of the under-consultation that’s occurred with critical Government bills, such as the pay equity one, which didn’t even go through a consultation phase. Sadly, this bill is not immune to this Government’s general approach to consultation. Unlike a raft of other legislation this Government has moved through the House, the regulatory impact statement for this bill does meet the requirements, and I acknowledge that, for once, this Government has listened to official advice and that the officials’ preferred option is in sync.

The 7 April departmental report on this bill does not recommend any changes based on the submissions that were made, and we welcome the parts of the bill that enable greater efficiency of process and fairness, the clarification around roles and responsibilities in product stewardship legislation, and the removal of GST in certain cases from port—oh, we’re nearly there. Is it 6 p.m. yet?

Hon Members: Yes.

FRANCISCO HERNANDEZ: Oh, great. Wonderful. In conclusion, the Greens will be supporting this bill, and we really hope that this Government keeps the improvements in mind that the previous member suggested and that it supports the right to repair. Kia ora.

This debate is interrupted and is set down for resumption next sitting day. The House stands adjourned until 2 p.m. on Tuesday, 9 September 2025.

Debate interrupted.

The House adjourned at 6 p.m.