Vote Customs - External Sector - Estimates 2021/22
The Minister of Customs is responsible for the efficient and timely collection of Crown revenue, forecast to be $15.491 billion in the 2021/22 financial year.
The Minister of Customs is responsible for the departmental appropriations in the Vote for the 2021/22 financial year covering the following:
- a total of over $103 million for services relating to goods crossing borders, including trade compliance, and the protection of New Zealand through interventions, investigations and enforcement
- a total of over $90 million for services relating to travellers crossing borders and the protection of New Zealand through interventions, investigations and enforcement
- a total of over $39 million for the collection of Crown Revenue, the provision of Customs-related services to other government agencies and organisations, and the provision of advice and services to support Ministers to discharge their portfolio responsibilities relating to Customs, and
- a total of over $21 million for capital investment in departmental assets.
The Minister of Customs is responsible for a capital injection of $40.300 million to the New Zealand Customs Service for the 2021/22 financial year.
The Minister of Customs is responsible for the multi-year appropriation in the Vote for the 2021/22 financial year of just under $22 million for the provision of services related to mitigating the risk of COVID-19 being transmitted across the maritime border.
The Minister of Customs is responsible for the non-departmental appropriations in the Vote for the 2021/22 financial year covering the following:
- a total of $8 million to provide for doubtful debts on revenue collected for the Crown, and
- a total of $80,000 for payment of New Zealand's annual contribution to the World Customs Organization's operating budget.
The Minister for COVID-19 Response is responsible for a departmental appropriation in the Vote for the 2021/22 financial year covering:
- a total of $1.500 million for services relating to policy and investment advice and the design and coordination of joint initiatives relating to the border system as a whole.
Details of these appropriations are set out in Parts 2-4.
Details of Appropriations and Capital Injections#
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Annual Appropriations and Forecast Permanent Appropriations#
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Departmental Output Expenses
Border System Performance (M103) (A3)
Goods Clearance and Enforcement (M21) (A3)
Revenue Collection and Other Services (M21) (A3)
Travellers Clearance and Enforcement (M21) (A3)
Total Departmental Output Expenses
Departmental Capital Expenditure
New Zealand Customs Service - Capital Expenditure PLA (M21) (A3)
Total Departmental Capital Expenditure
Non-Departmental Other Expenses
Change in Doubtful Debt Provision (M21) (A3)
World Customs Organization (M21) (A3)
Total Non-Departmental Other Expenses
Total Annual Appropriations and Forecast Permanent Appropriations
Multi-Year Appropriations#
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Departmental Output Expenses
COVID-19 - Maritime Response (M21) (A3)
This appropriation is limited to the provision of services relating to mitigating the risk of transmission of COVID-19 across the maritime border.
Commences: 01 September 2020
Total Annual Appropriations and Forecast Permanent Appropriations and Multi-Year Appropriations#
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Total Annual Appropriations and Forecast Permanent Appropriations and Multi-Year Appropriations
Capital Injection Authorisations#
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| 2020/21 | 2021/22 |
|---|
Final Budgeted
$000 | Estimated Actual
$000 | Budget
$000 |
|---|
| New Zealand Customs Service - Capital Injection (M21) (A3) | 58,797 | 58,797 | 40,300 |
|---|
Supporting Information#
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Part 1 - Vote as a Whole#
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1.1 - New Policy Initiatives#
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COVID-19 - Maritime Response
Border System Performance
1.2 - Trends in the Vote#
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Summary of Financial Activity
Appropriations
Total Appropriations
Crown Revenue and Capital Receipts
Total Crown Revenue and Capital Receipts
Note - where restructuring of the vote has occurred then, to the extent practicable, prior years information has been restated as if the restructuring had occurred before the beginning of the period covered. In this instance Total Appropriations for the Budgeted and Estimated Actual year may not equal Total Annual Appropriations and Forecast Permanent Appropriations and Multi-Year Appropriations in the Details of Appropriations and Capital Injections.
Adjustments to the Summary of Financial Activity Table Due to Vote Restructuring
There have been no restructuring adjustments to prior year information in the Summary of Financial Activity table.
1.3 - Analysis of Significant Trends#
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Significant changes in each appropriation category for Vote Customs are discussed below.
Departmental Output Expenses
Over the last five years (comparing the total for 2016/17 of $187.846 million and the Estimated Actual for 2020/21 of $247.340 million), the net funding for Vote Customs has increased by $59.494 million. The net change in the total appropriation primarily relates to additional operational funding for:
- managing our border through the implementation and ongoing operation of next-generation SmartGate automated passenger processing technology - funding of nearly $4.400 million
- improving the efficiency and effectiveness of the Border Sector (a suite of initiatives in the Business Growth Agenda Export Markets work stream) - funding of nearly $5.700 million
- Drug Smuggling Networks: Strategic Disruption initiative - funding of $17.905 million
- Combating the Sexual Exploitation of Children Across our Cyber Border initiative - funding of $2.105 million
- a new activity in response to the impact of the COVID-19 pandemic to mitigate the risk of the virus crossing the maritime border - funding of $22.157 million in 2020/21
- a new activity to support the establishment and activities of the Border Executive Board - funding of $750,000 in 2020/21, and
- growth in the number of passengers and volume of goods imported.
Annual appropriations for the purchase of departmental outputs is a total of $256.864 million for 2021/22, an increase of $9.524 million above the 2020/21 appropriation. The net change in the total appropriations primarily relates to:
- an increase of $3.700 million for the one-off transfer in 2020/21 for the redeployment of Customs' staff who were required to perform new or varied tasks (including the performance of tasks at the maritime border) in response to the COVID-19 pandemic
- an increase of $2.901 million for capital charge on capital injections received in 2020/21
- transfers in funding of $1.386 million from 2020/21 for various initiatives, and
- an increase of $750,000 to support the Border Executive Board.
Departmental output expenses are currently expected to decrease to $233.579 million by 2024/25. The decrease mainly reflects the planned cessation of additional tasks performed by Customs in mitigating the risk of COVID-19 crossing the maritime border.
Departmental Capital Expenditure
The capital expenditure funding trend reflects the timing and level of capital expenditure for replacement and renewal of existing assets and additional capital investments.
Total forecast capital expenditure for 2021/22 is $21.054 million, a decrease of nearly $6.148 million from the estimated 2020/21 spend of $27.203 million. The decrease in this appropriation is due to the completion of a large capital project in 2020/21 and projects delayed because of the COVID-19 pandemic.
Non-Departmental Other Expenses
Almost all of the funding in this category is the amount provided to provision for doubtful debts relating to Crown Revenue managed by Customs. There was a large increase in the amount of funding provided in 2020/21 to manage the risk of increased doubtful debts in response to the COVID-19 pandemic.
From 2021/22 onwards estimated/budgeted non-departmental other expenses remain steady over the forecast period.
The Appropriation for ACC Equivalent Cover is no longer required with changes to ACC legislation in 2019.
Crown Revenue
The New Zealand Customs Service collects tax revenue on behalf of the Crown by way of customs duty and GST on imports, together with excise duty on domestically manufactured alcohol, tobacco, petroleum products, and excise equivalent duty on the same products imported into New Zealand. The GST on imports is the major revenue source.
The total Tax Revenue collected by the New Zealand Customs Service has increased each year over the last five years, with the exception of 2020/21 due to the impact that the COVID-19 pandemic had on goods crossing the border. Treasury forecasts the amount collected by the New Zealand Customs Service to recover and increase to $17,866 million by 2024/25.
Part 2 - Details of Departmental Appropriations#
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2.1 - Departmental Output Expenses#
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Border System Performance (M103) (A3)
Scope of Appropriation
This appropriation is limited to policy and investment advice and the design and coordination of joint initiatives relating to the border system as a whole.
Expenses and Revenue
and provides the headings for the row or group of rows. Column 2 to 4 show figures in thousands of dollars. Columns 2 and 3 are for 2020 2021 year where column 2 is Budgeted and column 3 is Estimated Actual. Column 4 shows 2021 2022 year Budget."> | 2020/21 | 2021/22 |
|---|
Final Budgeted
$000 | Estimated Actual
$000 | Budget
$000 |
|---|
| Total Appropriation | 750 | 750 | 1,500 |
|---|
| Revenue from the Crown | 750 | 750 | 1,500 |
|---|
| Revenue from Others | - | - | - |
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What is Intended to be Achieved with this Appropriation
This appropriation is intended to achieve an end-to-end border process that integrates health risk management and strategic border system improvements. This will be achieved through the provision of support to the Border Executive Board to enable it to provide policy and investment advice to assist effective decision-making, design and coordination for the border system to improve the wellbeing of New Zealanders.
How Performance will be Assessed and End of Year Reporting Requirements
The Border Executive Board has a risk and assurance framework for the end-to-end border process with respect to COVID-19
Satisfaction of the Minister for COVID-19 Response with the provision of coordination, information and advice
End of Year Performance Reporting
Performance information for this appropriation will be reported by the New Zealand Customs Service in its Annual Report.
Reasons for Change in Appropriation
The increase of $750,000 in this appropriation for 2021/22 is due to funding only covering part of the year when introduced in 2020/21. Funding for 2021/22 reflects the required level for an entire year.
COVID-19 - Maritime Response (M21) (A3)
Scope of Appropriation and Expenses
COVID-19 - Maritime Response (M21) (A3)
This appropriation is limited to the provision of services relating to mitigating the risk of transmission of COVID-19 across the maritime border.
Commences: 01 September 2020
Revenue
and provides the heading for the row or group of rows. Column 2 shows the Budget figure in thousands of dollars."> Budget
$000 |
|---|
| Revenue from the Crown to end of 2021/22 | 43,750 |
|---|
| Revenue from Others to end of 2021/22 | 270 |
|---|
| Total Revenue | 44,020 |
|---|
What is Intended to be Achieved with this Appropriation
This appropriation is intended to achieve border processes to mitigate the risk of transmission of COVID-19 into New Zealand across the maritime border.
How Performance will be Assessed and End of Year Reporting Requirements
Percentage of international maritime ports where Customs maintains a presence to deter non-compliance with the Maritime Border Order
Percentage of identified non-compliance instances (see Note 1) at maritime ports that are met with an appropriate response by Customs
Note 1 - The majority of non-compliance is breaches of personal protective equipment (PPE) usage and social distancing requirements, however isolation and security breaches and other activity in violation of the Maritime Border Order is also captured by this measure. There is no estimated actual for 2020/21 for this measure as the refined reporting to enable measurement will commence in late 2020/21.
End of Year Performance Reporting
Performance information for this appropriation will be reported by the New Zealand Customs Service in its Annual Report.
Goods Clearance and Enforcement (M21) (A3)
Scope of Appropriation
This appropriation is limited to the provision of services relating to goods crossing borders, including trade compliance, and the protection of New Zealand through interventions, investigations and enforcement.
Expenses and Revenue
and provides the headings for the row or group of rows. Column 2 to 4 show figures in thousands of dollars. Columns 2 and 3 are for 2020 2021 year where column 2 is Budgeted and column 3 is Estimated Actual. Column 4 shows 2021 2022 year Budget."> | 2020/21 | 2021/22 |
|---|
Final Budgeted
$000 | Estimated Actual
$000 | Budget
$000 |
|---|
| Total Appropriation | 116,560 | 116,560 | 103,679 |
|---|
| Revenue from the Crown | 74,668 | 74,668 | 54,414 |
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| Revenue from Others | 43,481 | 43,481 | 58,035 |
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What is Intended to be Achieved with this Appropriation
This appropriation is intended to achieve secure and efficient border processes for trade to and from New Zealand, to improve the wellbeing of New Zealanders.
How Performance will be Assessed and End of Year Reporting Requirements
Service provision and trade promotion#
Minimum percentage of trade transactions (other than those referred for compliance checks) processed (including assessment against business rules and intelligence alerts) within 30 minutes (of an estimated 15 million-16 million import transactions, 5.5 million-6.5 million export transactions, and 6,500-7,500 excise returns)
Minimum number of new companies that have formally entered Customs' Authorised Economic Operator (Secure Exports Scheme) programme
Clearance, compliance and risk management#
Minimum percentage of import transactions not requiring intervention after risk assessment (see Note 1)
Minimum percentage of export transactions not requiring intervention after risk assessment (see Note 1)
Number of import mail items (estimated 15 million-25 million items) subject to risk-based physical examination
Minimum result rate of physically examined mail items (estimated 8,000-12,000 items)
Minimum number of import trade (estimated 1.2 million-1.8 million import entries and 13.8 million-14.2 million ECIs) entries that are subject to risk-based physical examination
Minimum number of random interventions of import trade conducted (under Customs' Assurance programme) (see Note 2)
Investigations and enforcement#
Minimum percentage of investigations (see Note 3), related to import or export of prohibited or restricted goods, where prosecution is initiated (see Note 4)
Note 1 - 'Intervention' means action by Customs to carry out further risk assessment. This may include, but is not limited to, document inspection, screening or search.
Note 2 - Customs' Assurance programme conducts randomised compliance checks of imported goods crossing the border. The standard of 6,270 interventions is the minimum sample required for the assurance model to provide a valid representation of the population. These interventions include random sampling of fast freight, mail, and air and sea cargo (import entries and electronic cargo information (ECI) consignments).
Note 3 - 'Investigations' refers to investigations completed by the Customs Investigations Unit (CIU). This measure excludes actions taken by other units within Customs (for example the Frontline Investigations Team) or in relation to Intellectual Property Rights.
Note 4 - 'Prosecution initiated' refers to a closed high priority investigation where an offence has been committed, and an offender has been identified and placed before the Courts by Customs or any other agency.
End of Year Performance Reporting
Performance information for this appropriation will be reported by the New Zealand Customs Service in its Annual Report.
Current and Past Policy Initiatives
and provides the headings for the row or group of rows. Column 2 shows the Year of First Impact. Columns 3 to 7 show figures in thousands of dollars, where column 3 2020 2021 year Budgeted, column 4 2021 2022 year Budget, column 5 is 2022 2023 year Estimated, column 6 is 2023 2024 year Estimated and column 7 is 2024 2025 year Estimated."> | Policy Initiative | Year of
First
Impact | 2020/21
Final Budgeted
$000 | 2021/22
Budget
$000 | 2022/23
Estimated
$000 | 2023/24
Estimated
$000 | 2024/25
Estimated
$000 |
|---|
| Reprioritisation of Funding - Finding Savings through the Cost Recovery Review | 2019/20 | (765) | (766) | (766) | (766) | (766) |
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| Drug Smuggling Networks: Strategic Disruption | 2018/19 | 7,820 | 7,302 | 7,302 | 7,302 | 7,302 |
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Reasons for Change in Appropriation
The decrease of $12.881 million in this appropriation for 2021/22 is mainly due to:
- a one-off increase of $13.571 million in 2020/21 for a fiscally neutral transfer between departmental appropriations to reflect the redeployment of Customs staff who were required to perform new or varied tasks in response to the COVID-19 pandemic; and through the application of a more accurate methodology for the allocation of costs between departmental appropriations.
This is partially offset by:
- an increase of $727,000 due to a series of transfers to 2021/22 to fund projects that will continue into this year:
- the Enhanced Intelligence Tools Initiative ($405,000)
- the Border Cash Reporting initiative ($200,000)
- disrupting and dismantling the supply of methamphetamine in to New Zealand ($122,000).
Memorandum Account
Goods Clearance and Enforcement Memorandum Account
Closing Balance at 30 June
Memorandum accounts record the accumulated balance of surpluses and deficits incurred for outputs provided to third party users of those services on a full cost recovery basis. The Goods Clearance Fee memorandum account records both the revenues from, and costs of, clearing certain goods across the border.
The Memorandum account allows for the fact that revenue and expenses will not equate in any given financial year, with balances expected to trend to zero over a reasonable period of time (three to five years). Goods Clearance Fees payable to Customs by the importers and exporters of goods are set at a level that is designed to bring any accumulated surplus or deficit to zero over the three-year levy period.
Revenue Collection and Other Services (M21) (A3)
Scope of Appropriation
This appropriation is limited to the collection of Crown Revenue, the provision of Customs-related services to other government agencies and organisations, and the provision of advice and services to support Ministers to discharge their portfolio responsibilities relating to Customs.
Expenses and Revenue
and provides the headings for the row or group of rows. Column 2 to 4 show figures in thousands of dollars. Columns 2 and 3 are for 2020 2021 year where column 2 is Budgeted and column 3 is Estimated Actual. Column 4 shows 2021 2022 year Budget."> | 2020/21 | 2021/22 |
|---|
Final Budgeted
$000 | Estimated Actual
$000 | Budget
$000 |
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| Total Appropriation | 41,734 | 41,734 | 39,588 |
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| Revenue from the Crown | 32,932 | 32,932 | 29,486 |
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| Revenue from Others | 8,802 | 8,802 | 10,102 |
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What is Intended to be Achieved with this Appropriation
This appropriation is intended to achieve a well-functioning Customs Service that collects Crown Revenue to improve the wellbeing of New Zealanders.
How Performance will be Assessed and End of Year Reporting Requirements
Revenue collection#
Minimum percentage of revenue that is collected by the due date
Debt write-offs as a maximum percentage of total Crown revenue collected
Clearance, compliance and risk management#
Minimum number of risk-based trade compliance audit activities undertaken
Minimum percentage of a random sample of import entries that are found to be accurate through the transactional verification process
Minimum percentage of investigations (see Note 1), related to fraud, financial crime and tax evasion, where prosecution is initiated (see Note 2)
Policy advice#
Assessment of the quality of a sample of the agency's policy papers:
a) Minimum average score of papers
b) Minimum score of papers
Satisfaction of the portfolio Minister with the policy advice service
Ministerial servicing#
Satisfaction of the portfolio Minister with ministerial servicing
Minimum percentage of draft replies to ministerial correspondence (estimated between 40-70 items) that are provided within 20 working days or as agreed with the Minister (see Note 3)
Percentage of draft responses to parliamentary questions (estimated between 50-80 items) that are provided to the Minister's office so that answers can meet the timeframe set in Parliamentary Standing Orders
Other services#
Percentage of external alerts processed in accordance with alert instructions
Minimum percentage of requests accepted by the National Maritime Coordination Centre which are assigned within 31 days
Note 1 - 'Investigations' refers to investigations completed by the Customs Investigations Unit (CIU). This measure excludes actions taken by other units within Customs (for example the Frontline Investigations Team) or in relation to Intellectual Property Rights.
Note 2 - 'Prosecution initiated' refers to a closed high priority investigations where an offence has been committed, and an offender has been identified and placed before the Courts by Customs or any other agency.
Note 3 - For the purposes of this measure, 'working day' means a working day as defined in the Official Information Act 1982.
End of Year Performance Reporting
Performance information for this appropriation will be reported by the New Zealand Customs Service in its Annual Report.
Current and Past Policy Initiatives
and provides the headings for the row or group of rows. Column 2 shows the Year of First Impact. Columns 3 to 7 show figures in thousands of dollars, where column 3 2020 2021 year Budgeted, column 4 2021 2022 year Budget, column 5 is 2022 2023 year Estimated, column 6 is 2023 2024 year Estimated and column 7 is 2024 2025 year Estimated."> | Policy Initiative | Year of
First
Impact | 2020/21
Final Budgeted
$000 | 2021/22
Budget
$000 | 2022/23
Estimated
$000 | 2023/24
Estimated
$000 | 2024/25
Estimated
$000 |
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| Combating the Sexual Exploitation of Children Across our Cyber Border | 2019/20 | 2,105 | 2,160 | 2,179 | 2,179 | 2,179 |
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| Drug Smuggling Networks: Strategic Disruption | 2018/19 | 2,856 | 2,786 | 2,786 | 2,786 | 2,786 |
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Reasons for Change in Appropriation
The decrease of $2.146 million in this appropriation for 2021/22 is mainly due to:
- a one-off increase of $2.718 million in 2020/21 for a fiscally neutral transfer between departmental appropriations to reflect the redeployment of Customs staff who were required to perform new or varied tasks in response to the COVID-19 pandemic; and through the application of a more accurate methodology for the allocation of costs between departmental.
This is partially offset by:
- an increase of $650,000 due to the transfer of funding to 2021/22 for the Pacific Partnership Programme.
Travellers Clearance and Enforcement (M21) (A3)
Scope of Appropriation
This appropriation is limited to the provision of services relating to travellers crossing borders and the protection of New Zealand through interventions, investigations and enforcement.
Expenses and Revenue
and provides the headings for the row or group of rows. Column 2 to 4 show figures in thousands of dollars. Columns 2 and 3 are for 2020 2021 year where column 2 is Budgeted and column 3 is Estimated Actual. Column 4 shows 2021 2022 year Budget."> | 2020/21 | 2021/22 |
|---|
Final Budgeted
$000 | Estimated Actual
$000 | Budget
$000 |
|---|
| Total Appropriation | 66,139 | 66,139 | 90,234 |
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| Revenue from the Crown | 3,197 | 3,197 | 5,638 |
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| Revenue from Others | (18,471) | (18,471) | 8,148 |
|---|
What is Intended to be Achieved with this Appropriation
This appropriation is intended to achieve secure and efficient border processes for travel to and from New Zealand, to improve the wellbeing of New Zealanders.
How Performance will be Assessed and End of Year Reporting Requirements
Sea#
Percentage of arriving commercial marine craft assessed as high risk or requiring administrative process (estimated 400-500 commercial craft) that are subject to planned interaction while in a New Zealand port (see Note 1)
Minimum percentage of all arriving commercial marine craft that are not assessed as high risk that will be subject to Customs secondary interaction (see Note 2)
Minimum percentage of arriving small craft (estimated 150-250 small craft) subject to Customs secondary interaction (see Note 2)
Air#
Minimum percentage of arriving international air passengers and crew (estimated 150,000-250,000 passengers and crew) not requiring intervention after risk assessment (see Note 3)
Percentage of arriving international air passengers and crew who are selected for further risk assessment at Customs' secondary areas
Result rate of secondary searches of arriving international air passengers and crew (see Note 4)
Minimum number of random interventions of travellers conducted (under Customs' Assurance programme) (see Note 5)
Investigations and enforcement#
Minimum percentage of investigations (see Note 6), related to travellers and their possessions, where prosecution is initiated (see Note 7)
Note 1 - Planned interaction will be required for all craft showing a high (Priority 1) risk, craft visiting New Zealand for the first time, craft where information is incomplete, and craft where a visit is needed to complete an administrative process (such as immigration or bonding ships stores).
Note 2 - Secondary interaction means any interaction undertaken over and above the initial boarding and clearance function and may range from talking to the crew to a full rummage. The outputs maintain high levels of compliance, and act as a check on risk assessments. The measure 'Minimum percentage of all arriving commercial marine craft that are not assessed as high risk that will be subject to Customs secondary interaction' was removed for 2020/21 through The Supplementary Estimates of Appropriations 2020/21 but has returned for 2021/22.
Note 3 - 'Intervention' means action by the New Zealand Customs Service to carry out further risk assessment. This may include, but is not limited to, further questioning, interview, or baggage search. This excludes passengers who interact with Customs because they voluntarily seek out Customs' help or declare items.
Note 4 - An estimated 50%-60% of travellers selected for further risk assessment are subject to a secondary search. A positive result is any outcome of a secondary search that supports the person/item being risk-profiled. This includes, but is not limited to, finding dutiable, prohibited, or undeclared items; or referral to another border control agency. The result rate does not include any interceptions, seizures, or arrests that occur at a later date or at a location outside of the international airport of entry that may have been the result of information/intelligence gathered from a secondary search.
Note 5 - Customs' Assurance programme conducts randomised compliance checks of travellers crossing the border. The standard of 2,000 interventions is the minimum sample required for the assurance model to provide a valid representation of the population. These interventions include random sampling of arriving international air passengers. This measure was removed for 2020/21 through The Supplementary Estimates of Appropriations 2020/21 but has returned for 2021/22.
Note 6 - 'Investigations' refers to investigations completed by the Customs Investigations Unit (CIU). This measure excludes actions taken by other units within Customs (for example the Frontline Investigations Team) or in relation to Intellectual Property Rights.
Note 7 - 'Prosecution initiated' refers to a closed high priority investigations where an offence has been committed, and an offender has been identified and placed before the Courts by Customs or any other agency.
End of Year Performance Reporting
Performance information for this appropriation will be reported by the New Zealand Customs Service in its Annual Report.
Current and Past Policy Initiatives
and provides the headings for the row or group of rows. Column 2 shows the Year of First Impact. Columns 3 to 7 show figures in thousands of dollars, where column 3 2020 2021 year Budgeted, column 4 2021 2022 year Budget, column 5 is 2022 2023 year Estimated, column 6 is 2023 2024 year Estimated and column 7 is 2024 2025 year Estimated."> | Policy Initiative | Year of
First
Impact | 2020/21
Final Budgeted
$000 | 2021/22
Budget
$000 | 2022/23
Estimated
$000 | 2023/24
Estimated
$000 | 2024/25
Estimated
$000 |
|---|
| Drug Smuggling Networks: Strategic Disruption | 2018/19 | 7,229 | 7,224 | 7,224 | 7,224 | 7,224 |
|---|
Reasons for Change in Appropriation
The increase of $24.095 million in this appropriation for 2021/22 is mainly due to:
- a one-off decrease of $19.989 million in 2020/21 for a fiscally neutral transfer between departmental appropriations to reflect the redeployment of Customs staff who were required to perform new or varied tasks (including the performance of tasks at the maritime border) in response to the COVID-19 pandemic; and through the application of a more accurate methodology for the allocation of costs between departmental appropriations.
This is partially offset by:
- an increase of $2.901 million through the receipt of capital charge funding to support a capital injection.
Memorandum Account
Border Clearance Levy Memorandum Account
Closing Balance at 30 June
Memorandum accounts record the accumulated balance of surpluses and deficits incurred for outputs provided to third party users of those services on a full cost recovery basis. The Border Clearance Levy memorandum account records both the revenue from, and costs of providing, the border clearance services relating to travellers arriving in and departing New Zealand.
The Memorandum account allows for the fact that revenue and expenses will not equate in any given financial year, with balances expected to trend to zero over a reasonable period of time (three to five years). The Border Clearance Levy rates payable to Customs by travellers were set on 1 July 2018 at a level that was designed to bring the accumulated surplus to zero over the three-year levy period.
COVID-19 related border restrictions were introduced in March 2020. This significantly reduced the number of travellers crossing the border and the amount of revenue earned from the Border Clearance Levy. Despite the reduction in traveller volumes, Customs was still required to maintain a presence at the border to safely manage people through the airport and in to managed isolation. This resulted in a large memorandum account deficit. The Government approved a number of capital injections to support Customs' departmental cash flow in response to reduced revenue levels. It has subsequently been agreed that these capital injections can be used to offset the memorandum account deficit at the end of 2020/21.
Customs is consulting with industry groups on a return to full cost recovery over a three-year period beginning in December 2021. The Government has approved a further capital injection to provide Customs with sufficient departmental cash flow from 1 July 2021 to December 2021.
2.3 - Departmental Capital Expenditure and Capital Injections#
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New Zealand Customs Service - Capital Expenditure PLA (M21) (A3)
Scope of Appropriation
This appropriation is limited to the purchase or development of assets by and for the use of the New Zealand Customs Service, as authorised by section 24(1) of the Public Finance Act 1989.
Capital Expenditure
Total Appropriation
What is Intended to be Achieved with this Appropriation
This appropriation is intended to achieve the renewal and replacement of assets in support of the delivery of the New Zealand Customs Service's services.
How Performance will be Assessed and End of Year Reporting Requirements
Expenditure is in accordance with the department's intention to renew and replace computer equipment and software, furniture and fittings, leasehold improvements, motor vehicles, and office equipment and plant
End of Year Performance Reporting
Performance information for this appropriation will be reported by the New Zealand Customs Service in its Annual Report.
Reasons for Change in Appropriation
Total forecast capital expenditure for 2021/22 is $21.054 million, a decrease of nearly $6.148 million from the estimated 2020/21 spend of $27.203 million. The decrease in this appropriation is due to the completion of a large capital project in 2020/21 and projects delayed because of the COVID-19 pandemic.
Capital Injections and Movements in Departmental Net Assets
New Zealand Customs Service
Closing Balance
