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.