2. GROUNDS FOR OPPOSITION
A. Unfair Financial Burden on Businesses and Consumers
- The Bill introduces new levies on importers to recover Customs-related costs (Clause 6, new sections 414A and 414B of the Customs and Excise Act 2018).
- These levies function as an indirect tariff, unfairly increasing costs for importers, exporters, and consumers.
- Legal Concern: The principle of legal certainty requires that financial obligations be clearly defined and justified (New Zealand Bill of Rights Act 1990, s 22).
- Recommendation: The Bill should include levy caps and require parliamentary approval for any future increases.
B. Excessive Executive Power Over Levy Adjustments
- The Bill allows the Governor-General, on the Minister’s recommendation, to create levy orders by Order in Council, without proper parliamentary oversight (Clause 6, new section 414A(3)).
- There is no clear limit on levy increases, creating a risk of arbitrary financial impositions.
- Legal Concern: The principle of parliamentary sovereignty requires that significant financial burdens be subject to full parliamentary scrutiny (Attorney-General v Taylor [2018] NZSC 104).
- Recommendation: Amend the Bill to require legislative approval for all levy adjustments.
C. Expansion of Customs' Role Beyond Its Core Functions
- The Bill allows Customs to collect product stewardship fees, overstepping its core mandate (Part 2, Clause 15, new section 24A of the Waste Minimisation Act 2008).
- This creates administrative confusion, as environmental fees should be managed by appropriate agencies, not Customs.
- Legal Concern: The principle of proper administrative delegation states that authorities should not exercise powers outside their designated function (Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997).
- Recommendation: Customs should not be involved in collecting environmental levies.
D. Increased Compliance Burdens on Small Businesses
- The Bill imposes heavy compliance and record-keeping requirements on businesses (Clause 6, new section 414B(2); Clause 9, amended section 417).
- These obligations will disproportionately affect small and medium enterprises (SMEs), increasing operational costs.
- Legal Concern: The principle of proportionality requires that regulatory measures do not impose excessive burdens (Ministry of Health v Atkinson [2012] NZCA 184).
- Recommendation: Exempt SMEs from excessive compliance burdens and require cost-benefit analysis before new compliance obligations.
E. Risk of Double Taxation on Imported Goods
- The Bill aims to fix GST issues on returned/replacement goods but does not guarantee automatic refunds (Part 3, Clause 17, amended section 12 of the Goods and Services Tax Act 1985).
- Businesses may still face administrative delays when reclaiming overpaid GST.
- Legal Concern: The principle of fair taxation requires that taxpayers should not be unfairly charged more than once on the same goods (New Zealand Bill of Rights Act 1990, s 27(1)).
- Recommendation: Require automatic GST refunds for returned/replaced goods.
F. Potential Inflationary Impact on Consumers
- Additional levies and compliance costs will increase consumer prices, worsening inflation.
- This will disproportionately impact lower-income households who rely on imported goods.
- Legal Concern: The principle of economic rationality in legislation states that laws should not introduce unnecessary economic distortions (New Zealand Productivity Commission, Regulatory Impact Assessment 2021).
- Recommendation: The Bill should require a Regulatory Impact Analysis on consumer price effects before implementation.
G. Breach of Te Tiriti o Waitangi and Local Decision-Making Rights
- The Bill undermines Te Tiriti o Waitangi by granting central government unilateral control over taxation and trade regulations, ignoring the role of local governance and shared decision-making.
- The imposition of new levies and Customs fees disproportionately impacts local communities, particularly Māori businesses and enterprises reliant on imports and exports (Clause 6, new sections 414A and 414B of the Customs and Excise Act 2018).
- Legal Concern: The Treaty principles of partnership, participation, and protection require that the government engages in meaningful consultation with Māori and affected communities before implementing policies that impact their economic rights (Waitangi Tribunal Reports; NZ Supreme Court, New Zealand Māori Council v Attorney-General [1987] 1 NZLR 641 (CA)).
- Recommendation: The Bill should be halted until full consultation with Māori and local communities is conducted, ensuring compliance with Te Tiriti o Waitangi and principles of local governance.
3. CONCLUSION
- The Customs (Levies and Other Matters) Amendment Bill, while intended to improve revenue collection, introduces significant economic, legal, and administrative risks.
- The Bill grants excessive executive discretion, imposes unjustified levies on businesses, and ignores the principles of shared governance under Te Tiriti o Waitangi.
- The Bill, as drafted, lacks proper parliamentary oversight, fairness, and efficiency.
- I strongly urge the Committee to reject or substantially amend the Bill to address these concerns.
4. RELIEF SOUGHT
- That the Finance and Expenditure Committee recommend withdrawal of the Bill for further review.
- That, if the Bill proceeds, it be substantially amended to include:
- Explicit levy caps and parliamentary oversight on future increases.
- Exemptions for SMEs from excessive compliance burdens.
- Automatic GST refund mechanisms.
- Removal of Customs' expanded role in collecting product stewardship fees.
- Full consultation with Māori and local communities to ensure compliance with Te Tiriti o Waitangi and local decision-making rights.
- That a full economic and regulatory impact assessment be conducted before the Bill is reintroduced.