Advanced Search | Help
11 February 1998
The Government has decided to move to fully recover the cost of the clearing of passengers and aircraft and sea craft at the New Zealand border. This will be effective from 1 January 1999. It is proposed that a charge on port companies (i.e. sea or airport) be applied, rather than a general passenger tax, unless consultation with those companies shows that there is a more effective way to recover these costs.
The charge to each port will depend on the costs of providing the service at that port. Officials will be consulting with port companies at the end of February 1998, and will report back to the Cabinet on implementing the decision by 20 March 1998.
Following extensive discussion the Cabinet decided that costs will be recovered. Late last year the Cabinet directed officials from the Ministry of Agriculture, NZ Customs Service and NZ Immigration Service to address:
The officials from the above departments consulted the Department of Prime Minister and Cabinet, the Treasury, the Ministry of Foreign Affairs and Trade and the Ministry of Transport on the issues.
Issues relating to implementing the charge are the key focus of consultation meetings during late February. Some of the thinking behind how officials addressed some of the issues is outlined below.
The cost to the Crown (and therefore to taxpayers) of providing border services in 1997-98 is expected to be $31.67 million (it is noted that NZIS's costs are recovered from visa/permits). Of this, some 15% will be recovered through charges. The charges were mainly imposed on Palmerston North, Dunedin and Hamilton airports. These airports recently began offering international flights. International airports at Auckland, Christchurch and Wellington are charged for some immigration and customs services. No charges are levied on sea ports.
The essential basis for recovering the cost of border services flows from a number of factors. These include:
Two main methods were explored - charging passengers directly or charging port companies. On balance, officials from MAF, Customs, Immigration, Transport and Treasury jointly agreed that charging port companies was better for the following reasons:
The charge to each port should reflect only conditions in that port. Different ports handle different numbers of passengers and use different ways to process those passengers. Officials saw this as a critical issue when deciding what charge might be imposed on each port. This will be an essential part of consultation on how the Cabinet's decision is implemented.
Meetings will be held with key industry players during the last week in February. The meetings will be held in Auckland, Hamilton, Palmerston North, Wellington, Christchurch and Dunedin.