Border security fees submission

SUBMISSIONS of the

NEW ZEALAND RETAILERS ASSOCIATION to the

NEW ZEALAND CUSTOMS SERVICE in respect of 

GOODS CLEARANCE SERVICES - COST RECOVERY REGULATIONS

August 2004

Introduction

These submissions are presented by the New Zealand Retailers Association.

The Association is the largest association representing the distribution industry in New Zealand.  Our membership includes the major supermarkets and general merchandise chain stores, specialised chains, traditional department stores and thousands of owner operators spread throughout New Zealand.  Our membership also includes a number of specialised trade groups including plumbing materials suppliers, metal fastener distributors, jewellers, pet shops, bicycle dealers and pet shops.

Viewed statistically, we represent an industry that has annual sales of $50b, and which employs some 325,000 people (17% of the workforce) in some 49,000 outlets spread throughout the country.

Background

We recognise that this discussion paper relates to the development and implementation of regulations to implement the Government's decision to recover from industry costs associated with the development of new border security measures which are designed to provide higher levels of security over New Zealand's external trade.

As a member of the Trade and Travel Coalition we made a series of submissions earlier in the year outlining our view that the costs of such recovery should be met by the Government rather than the private sector, but the Government rejected this view and reconfirmed the decision made in principle in 2003 that the $20m cost should be recovered from exporters, importers and those involved in trans-shipment. 

Like other groups we were disappointed by this decision but heartened by the Government's commitment to instigate a principles based cost recovery review over the next two years.

Comment

We continue to maintain our belief that border security is a public good issue where the costs should be funded by central Government and, as such, we believe the regulations should not proceed.  However, we recognise Government has made a policy decision, and is now implementing its decision, initially by the recent passing of an amendment to the Customs and Excise Act, and now through the development of the appropriate regulations.

On a general point we recognise that Customs has undertaken a comprehensive consultation in the development of these regulations.  This was not the case in respect of the original decision taken in 2003 to approve these charges in principle.  Nor was it the case a few years ago where Government decided to implement the original import transaction fee that currently is $18 per entry without any form of consultation with New Zealand business.

The charges prescribed in the draft regulations will add a further $4 per customs entry on imports.  We believe such a cost may appear minimal but it will add yet a further compliance cost impost onto importing retailers, which will inevitably be passed on in higher prices to consumers.  It is worth restating that in the case of one major importing retailer this fee represents about an extra $100,000 in additional Government costs that it will be forced to absorb into its costing structures.

We appreciate the opportunity of participating in the consideration of these proposals and appreciate that Customs has gone to considerable length to explain its proposals at a series of consultative meetings throughout the country.  We trust that the Department will embark on this process of open and comprehensive consultation in the forthcoming consultation on the wider issue of a principles based cost recovery regime over the next two years.

We suggest that there may be merit in extending this wider review to embrace all border security fees, including those that are the statutory responsibility of other Government agencies.  Our members, for example, raised particular cost concerns over a new quarantine inspection regime introduced for containers by the Ministry of Agriculture in 2003, and we therefore submit that the wider review could usefully embrace other fees and services other than just those administered by the NZ Customs service.

NZ Retailers Association

August 2004