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Estimates of appropriations

Vote Customs - External Sector - Estimates 2019/20

Vote Customs

APPROPRIATION MINISTER(S): Minister of Customs (M21)

APPROPRIATION ADMINISTRATOR: New Zealand Customs Service

RESPONSIBLE MINISTER FOR NEW ZEALAND CUSTOMS SERVICE: Minister of Customs

Overview of the Vote

The Minister of Customs is responsible for the efficient and timely collection of Crown revenue forecast to be $16,001 million in the 2019/20 financial year.

The Minister of Customs is also responsible for the departmental appropriations in the Vote for the 2019/20 financial year covering the following:

  • a total of nearly $10 million for services relating to clearance of craft crossing the border and the protection of New Zealand (through interventions, investigations and enforcement) from risk arising from international craft movements
  • a total of nearly $91 million for services relating to the facilitation and clearance of goods crossing the border and the protection of New Zealand (through interventions, investigations and enforcement) from risk arising from international trade
  • a total of over $78 million for services relating to the facilitation and clearance of passengers and crew crossing the border and the protection of New Zealand (through interventions, investigations and enforcement) from risk arriving from international travel
  • a total of over $15 million on information, intelligence and risk assessment services relating to people, goods and craft crossing the border, and goods that attract excise duties
  • a total of over $10 million on representing New Zealand in the international customs environment and providing services and support to the Minister
  • a total of over $5 million on policy advice to Ministers relating to border security, border management, and customs revenue
  • a total of over $10 million on collecting revenue on behalf of the Crown, and
  • a total of nearly $13 million for capital investment in departmental assets.

The Minister of Customs is also responsible for a capital injection of nearly $3 million to the New Zealand Customs Service.

The Minister of Customs is also responsible for the non-departmental appropriations in the Vote for the 2019/20 financial year covering the following:

  • a total of $8 million to provide for doubtful debts on revenue collected for the Crown
  • a total of $80,000 for payment of New Zealand's annual contribution to the World Customs Organization's operating budget, and
  • a total of $5,000 for the provision of ACC-equivalent cover for New Zealand Customs Service employees working overseas.

Details of these appropriations are set out in Parts 2-4.

Details of Appropriations and Capital Injections

Annual Appropriations and Forecast Permanent Appropriations

  2018/19 2019/20
Titles and Scopes of Appropriations by Appropriation Type Final
Budgeted
$000
Estimated
Actual
$000
Budget
$000

Departmental Output Expenses

     

Clearance and Enforcement Services Related to Craft (M21)

This appropriation is limited to the provision of services relating to craft arriving in and departing from New Zealand, including clearance of craft, and protection of New Zealand's interests through interventions, investigations and enforcement.
8,979 8,979 9,985

Clearance and Enforcement Services Related to Goods (M21)

This appropriation is limited to the provision of services relating to goods crossing the border, including clearance of goods, assessment and audit of revenue, trade compliance and supply chain security assurance, and protection of New Zealand's interests through interventions, audits, investigations and enforcement.
89,979 89,979 90,981

Clearance and Enforcement Services Related to Passengers and Crew (M21)

This appropriation is limited to the provision of services relating to passengers and crew crossing the border, including collecting information, clearance of people and their possessions, and protection of New Zealand's interests through interventions, investigations and enforcement.
71,982 71,982 78,327

Information and Intelligence Services (M21)

This appropriation is limited to the provision of information, intelligence and risk assessment services to external clients, and the operation of the National Maritime Coordination Centre.
13,231 13,231 15,652

International Services and Ministerial Servicing (M21)

This appropriation is limited to the provision of international services, obligations, and assistance, and the provision of services to Ministers to enable them to discharge their portfolio (other than policy decision-making) responsibilities.
10,692 10,692 10,259

Policy Advice (M21)

This appropriation is limited to the provision of advice (including second opinion advice and contributions to policy advice led by other agencies) to support decision-making by Ministers on government policy matters.
3,902 3,902 5,384

Revenue Collection (M21)

This appropriation is limited to the provision of services relating to receipt and processing of revenues owing to the Crown and other agencies, revenue assurance, credit and debt management.
10,320 10,320 10,373

Total Departmental Output Expenses

209,085 209,085 220,961

Departmental Capital Expenditure

     

New Zealand Customs Service - Capital Expenditure PLA (M21)

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.
31,871 31,871 12,655

Total Departmental Capital Expenditure

31,871 31,871 12,655

Non-Departmental Other Expenses

     

Change in Doubtful Debt Provision (M21)

Provisioning of Doubtful Debts on Customs Crown Revenue.
8,000 8,000 8,000

Provision of ACC-equivalent cover for New Zealand employees working overseas PLA (M21)

This appropriation is limited to payments authorised by section 65ZG of the Public Finance Act 1989 under the indemnity given by the Minister of Finance under section 65ZD of that Act for the provision of ACC-equivalent cover New Zealand employees working overseas as specified in the indemnity.
5 5 5

World Customs Organization (M21)

New Zealand's contribution to the operating budget of the WCO.
80 80 80

Total Non-Departmental Other Expenses

8,085 8,085 8,085

Total Annual Appropriations and Forecast Permanent Appropriations

249,041 249,041 241,701

Capital Injection Authorisations

  2018/19 2019/20
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
New Zealand Customs Service - Capital Injection (M21) 2,742 2,742 2,603

Supporting Information

Part 1 - Vote as a Whole

1.1 - New Policy Initiatives

Policy Initiative Appropriation 2018/19
Final Budgeted
$000
2019/20
Budget
$000
2020/21
Estimated
$000
2021/22
Estimated
$000
2022/23
Estimated
$000
Combating the Sexual Exploitation of Children Across our Cyber Border Information and Intelligence Services
Departmental Output Expenses
- 1,247 2,028 2,160 2,179
  New Zealand Customs Service
Capital Injection
- 1,945 430 150 150
Reprioritisation of Funding - Finding Savings through the Cost Recovery Review Clearance and Enforcement Services Related to Goods
Departmental Output Expenses
- (512) (765) (766) (766)
Total Initiatives   - 2,680 1,693 1,544 1,563

1.2 - Trends in the Vote

Summary of Financial Activity
  2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23
  Actual
$000
Actual
$000
Actual
$000
Actual
$000
Final Budgeted
$000
Estimated
Actual
$000
Departmental
Transactions
Budget
$000
Non-
Departmental
Transactions
Budget
$000
Total
Budget
$000
Estimated
$000
Estimated
$000
Estimated
$000

Appropriations

                       
Output Expenses 168,088 172,056 187,846 195,962 209,085 209,085 220,961 - 220,961 227,705 230,634 234,313
Benefits or Related Expenses - - - - - - N/A - - - - -
Borrowing Expenses - - - - - - - - - - - -
Other Expenses 6,916 2,683 4,575 2,445 8,085 8,085 - 8,085 8,085 8,085 8,085 8,085
Capital Expenditure 17,305 18,874 5,154 15,720 31,871 31,871 12,655 - 12,655 12,655 12,655 12,655
Intelligence and Security Department Expenses and Capital Expenditure - - - - - - - N/A - - - -
Multi-Category Expenses and Capital Expenditure (MCA)                        
Output Expenses - - - - - - - - - - - -
Other Expenses - - - - - - - - - - - -
Capital Expenditure - - - - - - N/A - - - - -

Total Appropriations

192,309 193,613 197,575 214,127 249,041 249,041 233,616 8,085 241,701 248,445 251,374 255,053

Crown Revenue and Capital Receipts

                       
Tax Revenue 12,485,685 13,179,829 13,269,756 14,379,202 15,395,000 15,395,000 N/A 16,001,000 16,001,000 16,508,000 16,804,000 17,199,000
Non-Tax Revenue - - - - - - N/A 642 642 642 642 642
Capital Receipts - - - - - - N/A - - - - -

Total Crown Revenue and Capital Receipts

12,485,685 13,179,829 13,269,756 14,379,202 15,395,000 15,395,000 N/A 16,001,642 16,001,642 16,508,642 16,804,642 17,199,642

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 years information in the Summary of Financial Activity table.

1.3 - Analysis of Significant Trends

Significant changes in each appropriation category for Vote Customs are discussed below.

Departmental Output Expenses

Over the last five years (comparing the total for 2014/15 and the Estimated Actual for 2018/19), the net funding for Vote Customs has increased by $40.997 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 over $1.400 million in 2015/16, over $4.400 million in 2016/17, nearly $5 million in 2017/18, and nearly $4.400 million in outyears) and the extended risk screening of departing passengers (funding of nearly $700,000 in 2015/16 and over $1.300 million in outyears)
  • Building Export Markets: Growing Secure Exports - funding of over $1.600 million in 2015/16 and over $1.500 million in outyears
  • Modernising and Transforming the New Zealand Customs Service Workforce - funding of nearly $800,000 in 2015/16 and over $4.700 million in outyears, and
  • Improving the Efficiency and Effectiveness of the Border Sector (a suite of initiatives in the Business Growth Agenda Export Markets work stream) - funding of over $9.500 million in 2016/17, over $8.700 million in 2017/18, and nearly $5.700 million in outyears.

The increase also reflects the continued volume growth in the number of passengers and volumes of importation of goods and the associated increase in funding.

Annual appropriations for the purchase of departmental outputs is a total of $220.961 million for 2019/20, an increase of $11.876 million above the 2018/19 appropriation. The net change in the total appropriation primarily relates to:

  • an increase of $7.332 million from the funding provided in 2018/19 for the Drug Smuggling Networks: Strategic Disruption budget initiative
  • an increase of $2.921 million for the cost of providing services relating to passengers and crew crossing the border and clearance of goods to meet the forecast increases in volumes
  • an increase of $1.247 million for the Combating the Sexual Exploitation of Children Across our Cyber Border budget initiative, and
  • the transfer in funding of $0.850 million from 2018/19 for the Exports: Reducing Overseas Customs Delays for New Zealand Exporters budget initiative.

Departmental output expenses are currently expected to increase to $234.312 million by 2022/23. The increase mainly reflects the continued volume growth in the number of passengers, the increased volumes of importation of goods (and the associated increases in funding), and the additional funding in Budget 2018 for the Drug Smuggling Networks: Strategic Disruption and Budget 2019 for the Combating the Sexual Exploitation of Children Across our Cyber Border initiatives.

Departmental Capital Expenditure

The trend of the capital expenditure funding reflects the timing and level of capital expenditure for replacement and renewal of existing assets and additional capital investments.

The total forecast capital expenditure for 2019/20 is $12.655 million, a decrease of over $19 million from the estimated 2018/19 spend of $31.871 million. The decrease in this appropriation is due to the approval in 2018/19 of a number of large capital projects to support operational requirements.

Non-Departmental Other Expenses

Almost all of the expense in this category is the amount provisioned for doubtful debts for the Crown Revenue managed by Customs.

The trend over the past five years reflects the assessment of the provision and write-off of debts based on the profile of the aged debtors. The increase in the actual in 2014/15 reflected some additional provisioning of doubtful debts relating to a small number of large clients.

The estimated/budgeted non-departmental other expenses remain steady for 2019/20 and the forecast outyears.

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, and the Treasury forecasts the amount collected by the New Zealand Customs Service to continue to steadily increase each financial year to 2022/23.

Part 2 - Details of Departmental Appropriations

2.1 - Departmental Output Expenses

Clearance and Enforcement Services Related to Craft (M21)
Scope of Appropriation
This appropriation is limited to the provision of services relating to craft arriving in and departing from New Zealand, including clearance of craft, and protection of New Zealand's interests through interventions, investigations and enforcement.
Expenses and Revenue
  2018/19 2019/20
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 8,979 8,979 9,985
Revenue from the Crown 8,870 8,870 9,895
Revenue from Others 109 109 90
What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve secure and efficient border processes for marine craft, to improve the wellbeing of New Zealanders.

How Performance will be Assessed and End of Year Reporting Requirements
  2018/19 2019/20
Assessment of Performance Final Budgeted
Standard
Estimated
Actual
Budget
Standard

Percentage of small marine craft arriving (estimated 600-700 small craft) whose master of vessel reported to a customs officer upon first arrival in a New Zealand port

New measure 100% 100%

Percentage of arriving commercial marine craft (including cruise ships) showing high risk or requiring administrative process (estimated 400-500 commercial craft) that are boarded while in a New Zealand port (see Note 1)

100% 100% 100%

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)

5% 8% 5%

Note 1 - Boarding will be required for 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. This output maintains high levels of compliance, and acts as a check on risk assessments.

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
Policy Initiative Year of
First
Impact
2018/19
Final Budgeted
$000
2019/20
Budget
$000
2020/21
Estimated
$000
2021/22
Estimated
$000
2022/23
Estimated
$000
Current Government            
Drug Smuggling Networks: Strategic Disruption 2018/19 722 1,223 1,750 1,705 1,705
Previous Government            
Improving the Efficiency and Effectiveness of the Border Sector 2016/17 371 371 371 371 371
Modernising and Transforming Customs' Workforce 2015/16 841 841 841 841 841
Managing our Border: Screening Departing Passengers 2015/16 268 268 268 268 268
Building Export Markets: Growing Secure Exports to China and ASEAN 2015/16 28 28 28 28 28
Share of Costs for Budget 2015 Whole-of-Government Initiatives 2015/16 (5) (5) (5) (5) (5)
Reasons for Change in Appropriation

The increase in this appropriation for 2019/20 is due to:

  • an increase in funding and transfer from 2018/19 totalling $987,000 for the Drug Smuggling Networks: Strategic Disruption budget initiative, and
  • an increase of $56,000 from the 2013/14 four year plan identified efficiencies.

This is partially offset by a decrease of $196,000 due to the completion of the Proceeds of Crime initiative and the completion of other minor initiatives.

Clearance and Enforcement Services Related to Goods (M21)
Scope of Appropriation
This appropriation is limited to the provision of services relating to goods crossing the border, including clearance of goods, assessment and audit of revenue, trade compliance and supply chain security assurance, and protection of New Zealand's interests through interventions, audits, investigations and enforcement.
Expenses and Revenue
  2018/19 2019/20
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 89,979 89,979 90,981
Revenue from the Crown 21,305 21,305 21,893
Revenue from Others 68,674 68,674 69,088
What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve secure and efficient border processes, including for the assessment and collection of due Crown revenue, 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
  2018/19 2019/20
Assessment of Performance Final Budgeted
Standard
Estimated
Actual
Budget
Standard

Trade

     

Minimum percentage of importers and exporters satisfied or very satisfied with the overall quality of Customs' service delivery (as measured by Customs' stakeholder survey)

85% 80.0% 85%

Minimum percentage of importers and exporters that find it easy to comply with border agencies' requirements when lodging electronic documents or making payments (as measured by Customs' stakeholder survey)

85% 70.0% 85%

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 between 10.5-11.5 million import transactions, 4.5-5.5 million export transactions, and 5,500-6,500 excise returns)

95% 99.8% 95%

Minimum percentage of import transactions that are deemed compliant based on risk assessment and proceed without further intervention (see Note 1)

95% 98.5% 95%

Minimum percentage of export transactions that are deemed compliant based on risk assessment and proceed without further intervention (see Note 1)

99% 99.8% 99%

Minimum percentage of a random sample of import entries that are found to be compliant through the transactional verification process

90% 91.5% 90%

Protection (see Note 2)

     

Minimum value of harm (NZ$) avoided through Customs' drug seizures, as measured by indicative data from the New Zealand Drug Harm Index

$500 million $1,000 million $500 million

Minimum losses (NZ$) incurred by importers of illegal goods through seizure of illicit drugs and proceeds of crime

$250 million $400 million $250 million

Percentage of investigation cases (estimated between 100-300 cases) finalised within 12 months of commencement

70%-85% 75.0% 70%-85%

Minimum percentage of serious investigation cases (see Note 3) that lead to punitive action (see Note 4)

90% 95.0% 90%

Note 1 - 'Intervention' means action by Customs to carry out further risk assessment. This may include, but is not limited to, document inspection, screening and search.

Note 2 - The following output classes also contribute to the Protection outcome: Clearance and enforcement services related to passenger and crew; Clearance and enforcement services related to craft; Information and intelligence services; Policy advice; and International services and ministerial servicing. Most protection activity involves illicit goods.

Note 3 - A serious investigation case involves, or has the potential to involve, serious community harm. Examples of serious investigation cases would include those involving more than $250,000 drug harm (as calculated using the New Zealand Drug Harm Index), Class A or B drugs for supply, objectionable material involving child exploitation, or the importation of counterfeit medicines.

Note 4 - Punitive actions are actions resulting from a closed or completed serious investigation case where an offence has been committed and an offender has been identified, and where the result includes, but is not limited to: offender being placed before the Courts by Customs or New Zealand Police; seizure of goods; a formal warning to the offender; issue of an infringement notice under section 400 of the Customs and Excise Act 2018; or an administrative penalty.

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
Policy Initiative Year of
First
Impact
2018/19
Final Budgeted
$000
2019/20
Budget
$000
2020/21
Estimated
$000
2021/22
Estimated
$000
2022/23
Estimated
$000
Current Government            
Reprioritisation of Funding - Finding Savings through the Cost Recovery Review 2019/20 - (512) (765) (766) (766)
Drug Smuggling Networks: Strategic Disruption 2018/19 2,601 5,682 7,715 7,302 7,302
Exports: Reducing Overseas Customs Delays for New Zealand Exporters 2018/19 850 - - - -
Previous Government            
Improving the Efficiency and Effectiveness of the Border Sector 2016/17 2,902 2,902 2,902 2,902 2,902
Building Export Markets: Growing Secure Exports to China and ASEAN 2015/16 564 564 564 564 564
Managing our Border: Screening Departing Passengers 2015/16 355 355 355 355 355
Share of Costs for Budget 2015 Whole-of-Government Initiatives 2015/16 (33) (33) (33) (33) (33)
Reasons for Change in Appropriation

The increase in this appropriation for 2019/20 is due to:

  • an increase in funding and transfer from 2018/19 of $2.054 million for the Drug Smuggling Networks: Strategic Disruption budget initiative, and
  • an increase of $1.500 million to meet volume increases.

This is partially offset by a decrease of:

  • $898,000 relating to the completion of several initiatives
  • $512,000 relating to the Reprioritisation of Funding - finding savings through the Cost Recovery Review
  • $278,000 due to the completion of the Proceeds of Crime initiative, and
  • $257,000 transfer to Ministry of Primary Industries.
Clearance and Enforcement Services Related to Passengers and Crew (M21)
Scope of Appropriation
This appropriation is limited to the provision of services relating to passengers and crew crossing the border, including collecting information, clearance of people and their possessions, and protection of New Zealand's interests through interventions, investigations and enforcement.
Expenses and Revenue
  2018/19 2019/20
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 71,982 71,982 78,327
Revenue from the Crown 634 634 747
Revenue from Others 69,235 69,235 71,733
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
  2018/19 2019/20
Assessment of Performance Final Budgeted
Standard
Estimated
Actual
Budget
Standard

Minimum percentage of arriving international air passengers satisfied or very satisfied that Customs processes passengers quickly and conveniently (as measured by Customs' stakeholder survey)

85% 80.0% 85%

Minimum percentage of arriving international air passengers and crew (estimated 7.3-7.8 million passengers and crew) who are deemed compliant based on risk assessment and facilitated without further intervention (see Note 1)

98% 99.5% 98%

Minimum percentage of arriving international air passengers who exit Customs primary processing points within 45 minutes of arrival

90% 96.4% 90%

Percentage of arriving international air passengers and crew who are selected for further risk assessment at Customs' secondary areas

0.6%-1% 0.5% 0.6%-1%

Percentage of arriving international air passengers and crew who are selected for further risk assessment who were subsequently subject to a full or partial baggage examination

45%-55% 58.8% 50%-60%

Note 1 - 'Intervention' means action by Customs to carry out further risk assessment. This may include, but is not limited to, further questioning, interview, or baggage search.

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
Policy Initiative Year of
First
Impact
2018/19
Final Budgeted
$000
2019/20
Budget
$000
2020/21
Estimated
$000
2021/22
Estimated
$000
2022/23
Estimated
$000
Current Government            
Drug Smuggling Networks: Strategic Disruption 2018/19 1,770 4,395 5,406 5,519 5,519
Previous Government            
Improving the Efficiency and Effectiveness of the Border Sector 2016/17 1,111 1,111 1,111 1,111 1,111
Managing our Border: Expanding SmartGate 2015/16 4,386 4,386 4,386 4,386 4,386
Managing our Border: Screening Departing Passengers 2015/16 334 334 334 334 334
Building Export Markets: Growing Secure Exports to China and ASEAN 2015/16 32 32 32 32 32
Share of Costs for Budget 2015 Whole-of-Government Initiatives 2015/16 (44) (44) (44) (44) (44)
Reasons for Change in Appropriation

The increase in this appropriation for 2019/20 is mainly due to:

  • an increase of $3.158 million to meet volume increases, and
  • an increase in funding and transfer from 2018/19 of $2.521 million for the Drug Smuggling Networks: Strategic Disruption budget initiative.

This is partially offset by a decrease of:

  • $260,000 due to the completion of the Proceeds of Crime initiative
  • $92,000 due to the completion of the implementation of the Customs and Excise Act initiative, and
  • $66,000 due to the completion of the implementation of the Assurance initiative and the completion of other minor initiatives.
 
  2018/19 2019/20
  Budgeted
$000
Estimated Actual
$000
Budget
$000

Border Clearance Levy Memorandum Account

     
Opening Balance at 1 July 17,353 17,353 14,040
Revenue 69,869 68,669 70,430
Expenses (71,982) (71,982) (76,317)
Transfers and Adjustments      

Closing Balance at 30 June

15,240 14,040 8,153
Memorandum Account

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 revenues 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 re-set 1 July 2018 at a level that was designed to bring the accumulated surplus to zero over the three year levy period.

Information and Intelligence Services (M21)
Scope of Appropriation
This appropriation is limited to the provision of information, intelligence and risk assessment services to external clients, and the operation of the National Maritime Coordination Centre.
Expenses and Revenue
  2018/19 2019/20
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 13,231 13,231 15,652
Revenue from the Crown 12,379 12,379 14,900
Revenue from Others 852 852 752
What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve reduced risks to New Zealand's interests arising from international trade and travel, to improve the wellbeing of New Zealanders.

How Performance will be Assessed and End of Year Reporting Requirements
  2018/19 2019/20
Assessment of Performance Final Budgeted
Standard
Estimated
Actual
Budget
Standard

Percentage of external alerts processed in accordance with alert instructions

New measure 99.3% 100%

Minimum percentage of requesting agencies and assets providers satisfied with National Maritime Coordination Centre's coordination of tasking

80% 80% 80%

Minimum percentage of agency requests accepted by the National Maritime Coordination Centre that are successfully completed (see Note 1)

80% 82.0% 80%

Note 1 - Requests are accepted if they are within the capability of the fleet resources. Acceptance is not determined by the availability of fleet resources.

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
Policy Initiative Year of
First
Impact
2018/19
Final Budgeted
$000
2019/20
Budget
$000
2020/21
Estimated
$000
2021/22
Estimated
$000
2022/23
Estimated
$000
Current Government            
Combating the Sexual Exploitation of Children Across our Cyber Border 2019/20   1,247 2,028 2,160 2,179
Drug Smuggling Networks: Strategic Disruption 2018/19 700 1,578 1,999 1,936 1,936
Previous Government            
Improving the Efficiency and Effectiveness of the Border Sector 2016/17 6 6 6 6 6
Modernising and Transforming Customs' Workforce 2015/16 863 863 863 863 863
Managing our Border: Screening Departing Passengers 2015/16 268 268 268 268 268
Building Export Markets: Growing Secure Exports to China and ASEAN 2015/16 26 26 26 26 26
Share of Costs for Budget 2015 Whole-of-Government Initiatives 2015/16 (5) (5) (5) (5) (5)
Reasons for Change in Appropriation

The increase in this appropriation for 2019/20 is mainly due to:

  • An increase of $1.247 million for the enhancement of services to Combat Child Sexual Exploitation Across our Cyber Border initiative, and
  • an increase in funding and transfer from 2018/19 of $998,000 for the Drug Smuggling Networks: Strategic Disruption budget initiative.

This is partially offset by a decrease of:

  • $351,000 due to the completion of the Proceeds of Crime initiative and the completion of other minor initiatives.
International Services and Ministerial Servicing (M21)
Scope of Appropriation
This appropriation is limited to the provision of international services, obligations, and assistance, and the provision of services to Ministers to enable them to discharge their portfolio (other than policy decision-making) responsibilities.
Expenses and Revenue
  2018/19 2019/20
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 10,692 10,692 10,259
Revenue from the Crown 8,701 8,701 8,268
Revenue from Others 1,991 1,991 1,991
What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve the provision of international policy advice and services to ensure New Zealand's interests are effectively represented in international customs policy and the maintenance and development of relationships, and the provision of services and support to the Minister.

How Performance will be Assessed and End of Year Reporting Requirements
  2018/19 2019/20
Assessment of Performance Final Budgeted
Standard
Estimated
Actual
Budget
Standard

Minister's satisfaction with advice and support in relation to international services and ministerial servicing

Meets expectations Meets expectations Meets expectations

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 1)

90% 91% 90%

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

100% 100% 100%

Note 1 - 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
Policy Initiative Year of
First
Impact
2018/19
Final Budgeted
$000
2019/20
Budget
$000
2020/21
Estimated
$000
2021/22
Estimated
$000
2022/23
Estimated
$000
Current Government            
Drug Smuggling Networks: Strategic Disruption 2018/19 169 200 234 239 239
Previous Government            
Improving the Efficiency and Effectiveness of the Border Sector 2016/17 5 5 5 5 5
Modernising and Transforming Customs' Workforce 2015/16 1,250 1,250 1,250 1,250 1,250
Building Export Markets: Growing Secure Exports to China and ASEAN 2015/16 796 796 796 796 796
Managing our Border: Screening Departing Passengers 2015/16 67 67 67 67 67
Share of Costs for Budget 2015 Whole-of-Government Initiatives 2015/16 (6) (6) (6) (6) (6)
Reasons for Change in Appropriation

The decrease in this appropriation for 2019/20 is mainly due to:

  • a decrease of $747,000 due to the change in the profile of the Pacific Programme and the completion of other minor initiatives.

This is partially offset by an increase of:

  • additional funding and transfer from 2018/19 of $231,000 for the Drug Smuggling Networks: Strategic Disruption budget initiative, and
  • funding transferred from 2018/19 of $150,000 to complete the Proceeds of Crime Programme.
Policy Advice (M21)
Scope of Appropriation
This appropriation is limited to the provision of advice (including second opinion advice and contributions to policy advice led by other agencies) to support decision-making by Ministers on government policy matters.
Expenses and Revenue
  2018/19 2019/20
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 3,902 3,902 5,384
Revenue from the Crown 3,867 3,867 5,357
Revenue from Others 35 35 27
What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve timely policy advice that contributes to secure and efficient border processes and the collection of due Crown revenue.

How Performance will be Assessed and End of Year Reporting Requirements
  2018/19 2019/20
Assessment of Performance Final Budgeted
Standard
Estimated
Actual
Budget
Standard

Assessment of the quality of a sample of the agency's policy advice papers

75% 75% See Note 1

Satisfaction of the portfolio Minister with the policy advice service

75% 80% See Note 2

Maximum total cost (NZ$) of professional staff per hour of producing outputs

$120 $105 $120

Note 1 - The Standard will be identified based on the refreshed Policy Quality Framework and updated in the Supplementary Estimates. All agencies are required to use the refreshed Policy Quality Framework from 2019/20 to assess the quality of their policy advice papers. The Policy Quality Framework is currently being refreshed. The refreshed Framework will be released before 30 June 2019.

Note 2 - The Standard will be identified based on the revised Ministerial Satisfaction Survey and updated in the Supplementary Estimates. All agencies are required to use the refined Ministerial Satisfaction Survey from 2019/20 to assess ministerial satisfaction with the policy service. The survey is currently under review and the refined survey and guidance will be released before 30 June 2019.

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
Policy Initiative Year of
First
Impact
2018/19
Final Budgeted
$000
2019/20
Budget
$000
2020/21
Estimated
$000
2021/22
Estimated
$000
2022/23
Estimated
$000
Current Government            
Drug Smuggling Networks: Strategic Disruption 2018/19 57 158 180 184 184
Previous Government            
Improving the Efficiency and Effectiveness of the Border Sector 2016/17 3 3 3 3 3
Building Export Markets: Growing Secure Exports to China and ASEAN 2015/16 7 7 7 7 7
Managing our Border: Screening Departing Passengers 2015/16 67 67 67 67 67
Share of Costs for Budget 2015 Whole-of-Government Initiatives 2015/16 (2) (2) (2) (2) (2)
Modernising and Transforming Customs' Workforce 2015/16 808 808 808 808 808
Reasons for Change in Appropriation

The increase in this appropriation for 2019/20 is mainly due to additional funding for the Drug Smuggling Networks: Strategic Disruption budget intiative.

Revenue Collection (M21)
Scope of Appropriation
This appropriation is limited to the provision of services relating to receipt and processing of revenues owing to the Crown and other agencies, revenue assurance, credit and debt management.
Expenses and Revenue
  2018/19 2019/20
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 10,320 10,320 10,373
Revenue from the Crown 9,682 9,682 9,646
Revenue from Others 638 638 727
What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve the collection of due Crown revenue for New Zealand, to improve the wellbeing of New Zealanders.

How Performance will be Assessed and End of Year Reporting Requirements
  2018/19 2019/20
Assessment of Performance Final Budgeted
Standard
Estimated
Actual
Budget
Standard

Minimum percentage of revenue that is collected electronically

95% 99.2% 95%

Minimum percentage of revenue that is collected by the due date

98% 99.3% 98%

Debt write-offs as a maximum percentage of total Crown revenue collected

0.06% 0.01% 0.06%

Minimum additional revenue (NZ$) owed that is identified through the trade compliance programme

$15 million $37 million $15 million
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
Policy Initiative Year of
First
Impact
2018/19
Final Budgeted
$000
2019/20
Budget
$000
2020/21
Estimated
$000
2021/22
Estimated
$000
2022/23
Estimated
$000
Current Government            
Drug Smuggling Networks: Strategic Disruption 2018/19 166 281 415 427 427
Previous Government            
Improving the Efficiency and Effectiveness of the Border Sector 2016/17 1,283 1,283 1,283 1,283 1,283
Building Export Markets: Growing Secure Exports to China and ASEAN 2015/16 996 996 996 996 996
Managing our Border: Screening Departing Passengers 2015/16 78 78 78 78 78
Share of Costs for Budget 2015 Whole-of-Government Initiatives 2015/16 (6) (6) (6) (6) (6)

2.3 - Departmental Capital Expenditure and Capital Injections

New Zealand Customs Service - Capital Expenditure PLA (M21)
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
  2018/19 2019/20
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Forests/Agricultural - - -
Land - - -
Property, Plant and Equipment 12,095 12,095 9,056
Intangibles 19,776 19,776 3,599
Other - - -

Total Appropriation

31,871 31,871 12,655
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
  2018/19 2019/20
Assessment of Performance Final Budgeted
Standard
Estimated
Actual
Budget
Standard

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

Achieved Achieved Achieved
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 decrease in the capital expenditure appropriation relates to a number of significant projects programmed to be completed in the 2018/19 year.

Capital Injections and Movements in Departmental Net Assets
New Zealand Customs Service
Details of Net Asset Schedule 2018/19
Estimated Actual
$000
2019/20
Projected
$000
Explanation of Projected Movements in 2019/20
Opening Balance 166,786 164,767  
Capital Injections 2,742 2,603 An increase in funding for Combating the Sexual Exploitation of Children Across our Cyber Border.
Capital Withdrawals (2,648) -  
Surplus to be Retained (Deficit Incurred) (2,113) (5,847) Deficit for Border Clearance Levy Memorandum Account.
Other Movements - -  

Closing Balance

164,767 161,523  

Part 3 - Details of Non-Departmental Appropriations

3.4 - Non-Departmental Other Expenses

Change in Doubtful Debt Provision (M21)
Scope of Appropriation
Provisioning of Doubtful Debts on Customs Crown Revenue.
Expenses
  2018/19 2019/20
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 8,000 8,000 8,000
What is Intended to be Achieved with this Appropriation

This appropriation is to provide for doubtful debts on revenue collected by the New Zealand Customs Service on behalf of the Crown.

How Performance will be Assessed and End of Year Reporting Requirements
  2018/19 2019/20
Assessment of Performance Final Budgeted
Standard
Estimated
Actual
Budget
Standard

Debt write-offs as a maximum percentage of total Crown revenue collected

0.06% 0.01% 0.06%
End of Year Performance Reporting

Performance information for this appropriation will be reported by the Minister of Customs (the Appropriation Minister) in a report appended to the New Zealand Customs Service's annual report.

Provision of ACC-equivalent cover for New Zealand employees working overseas PLA (M21)
Scope of Appropriation
This appropriation is limited to payments authorised by section 65ZG of the Public Finance Act 1989 under the indemnity given by the Minister of Finance under section 65ZD of that Act for the provision of ACC-equivalent cover New Zealand employees working overseas as specified in the indemnity.
Expenses
  2018/19 2019/20
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 5 5 5
What is Intended to be Achieved with this Appropriation

This appropriation is intended to provide ACC-equivalent cover for New Zealand employees of the New Zealand Customs Service working overseas.

How Performance will be Assessed and End of Year Reporting Requirements

An exemption was granted under section 15D(2)(b)(ii) of the Public Finance Act 1989 as any performance information is not likely to be informative.

World Customs Organization (M21)
Scope of Appropriation
New Zealand's contribution to the operating budget of the WCO.
Expenses
  2018/19 2019/20
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 80 80 80
What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve New Zealand meeting its commitment as a member of the World Customs Organization (WCO) to contribute to the running costs of the WCO.

How Performance will be Assessed and End of Year Reporting Requirements
  2018/19 2019/20
Assessment of Performance Final Budgeted
Standard
Estimated
Actual
Budget
Standard

NewZealand's contribution to the operating budget of the WCO paid by the due date

Achieved Achieved Achieved
End of Year Performance Reporting

Performance information for this appropriation will be reported by the Minister of Customs (the Appropriation Minister) in a report appended to the New Zealand Customs Service's annual report.

 

Last updated: 
Thursday, 30 May 2019