They tried to pass this a while back, by simply reverting the changes made in select committee at the last moment.

They tried to sneak it through again as part of a multilateral copyright agreement (ACTA) done under the greatest of secrecy.

The majority of New Zealand DO NOT WANT this copyright law. How can they pass it and still call New Zealand a democracy?!

Tim O'Reilly already provided the answer; "Piracy is a progressive taxation". http://openp2p.com/lpt/a/3015

For more obscure works (eg sci-fi by Cory Doctorow, indie films such as Sita, Ink) free copying has a beneficial, promotional effect.

For already popular works (already heavily promoted legal music and movies) piracy replaces sales more than it encourages new sales.

CP is in the earlier category.