Basically, its fucking stupid.
Really, incredibly, idiotically stupid. Its completely unworkable, pointless, and it won't do a damn bit of anything to stop piracy. Basically, I think it comes down to a complete non-understanding by the National Government of how file-sharing actually works. The bill allows copyright owners to request that people who repeatedly share protected material have their internet account suspended for 6 months.
First of all, having copyright holders put the onus on the ISPs is just freaking stupid. Why would an ISP want to cut off its own customers when they have done nothing to them?
Secondly, the Government passed this bill under urgency, which means they got to neatly avoid any chance for public discussion on the bill. Urgency is supposed to be used in emergencies, such as legislation relating to the Christchurch earthquake. Piracy has been around forever, and it ain't going anywhere fast.
And thirdly, it just won't work. I will be most surprised if it stops a single person from pirating anything. The way to reduce piracy is to use the technology available to make things available legally and for a fair price. A war against internet piracy is even more hopeless than a war against drugs.
To really get an appreciation for how little the government understands the issue, go to this link and watch the video where MP Jonathan Young compares the internet to Skynet.