Estimates of appropriations

Vote Customs - External Sector - Estimates 2016/2017

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 $13,498 million in the 2016/17 financial year.

The Minister of Customs is also responsible for the departmental appropriations in the Vote for the 2016/17 financial year covering the following:

  • a total of over $9 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 over $75 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 $68 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 $13 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 $9 million on representing New Zealand in the international customs environment and providing services and support to the Minister
  • a total of nearly $5 million on policy advice to Ministers relating to border security, border management, and customs revenue
  • a total of over $11 million on collecting revenue on behalf of the Crown, and
  • a total of $15 million for capital investment in departmental assets.

The Minister of Customs is also responsible for the non-departmental appropriations in the Vote for the 2016/17 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 $60,000 for payment of New Zealand's annual contribution to the World Customs Organization's operating budget.

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

Details of Appropriations and Capital Injections#

Annual and Permanent Appropriations#

  2015/16 2016/17
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.
8,138 8,138 9,477

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.
70,082 70,082 75,156

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.
61,246 61,246 68,164

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.
12,090 12,090 13,143

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.
9,115 9,115 9,232

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.
4,545 4,545 4,791

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.
8,332 8,332 11,001

Total Departmental Output Expenses

173,548 173,548 190,964

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.
25,000 25,000 15,000

Total Departmental Capital Expenditure

25,000 25,000 15,000

Non-Departmental Other Expenses

     

Change in Doubtful Debt Provision (M21)

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

World Customs Organization (M21)

New Zealand's contribution to the operating budget of the WCO.
58 58 60

Total Non-Departmental Other Expenses

8,058 8,058 8,060

Total Annual and Permanent Appropriations

206,606 206,606 214,024

Capital Injection Authorisations#

  2015/16 2016/17
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
New Zealand Customs Service - Capital Injection (M21) 8,366 8,366 4,249

Supporting Information#

Part 1 - Vote as a Whole#

1.1 - New Policy Initiatives

Policy Initiative Appropriation 2015/16
Final Budgeted
$000
2016/17
Budget
$000
2017/18
Estimated
$000
2018/19
Estimated
$000
2019/20
Estimated
$000
Improving the efficiency and effectiveness of the border sector Clearance and Enforcement Services Related to Craft
Departmental Output Expenses
- 454 389 371 371
  Clearance and Enforcement Services Related to Goods
Departmental Output Expenses
- 4,868 4,468 2,902 2,902
  Clearance and Enforcement Services Related to Passengers and Crew
Departmental Output Expenses
- 2,164 1,675 1,111 1,111
  Information and Intelligence Services
Departmental Output Expenses
- 81 24 6 6
  International Services and Ministerial Servicing
Departmental Output Expenses
- 73 21 5 5
  Policy Advice
Departmental Output Expenses
- 325 154 3 3
  Revenue Collection
Departmental Output Expenses
- 1,599 1,305 1,283 1,283
  New Zealand Customs Service
Capital Injection
- 1,520 - - -
Modernising and transforming Customs' workforce Clearance and Enforcement Services Related to Craft
Departmental Output Expenses
139 841 841 841 841
  Information and Intelligence Services
Departmental Output Expenses
142 863 863 863 863
  International Services and Ministerial Servicing
Departmental Output Expenses
206 1,250 1,250 1,250 1,250
  Policy Advice
Departmental Output Expenses
133 808 808 808 808
  Revenue Collection
Departmental Output Expenses
164 996 996 996 996
Share of costs for Budget 2015 whole-of-government initiatives Clearance and Enforcement Services Related to Craft
Departmental Output Expenses
(11) (11) (8) (6) (6)
  Clearance and Enforcement Services Related to Goods
Departmental Output Expenses
(62) (62) (44) (32) (32)
  Clearance and Enforcement Services Related to Passengers and Crew
Departmental Output Expenses
(83) (83) (59) (44) (44)
  Information and Intelligence Services
Departmental Output Expenses
(9) (9) (6) (4) (4)
  International Services and Ministerial Servicing
Departmental Output Expenses
(8) (8) (6) (5) (5)
  Policy Advice
Departmental Output Expenses
(4) (4) (3) (2) (2)
  Revenue Collection
Departmental Output Expenses
(11) (11) (8) (6) (6)
Total Initiatives   596 15,654 12,606 10,340 10,340

Summary of Financial Activity#

  2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
  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 140,025 153,517 163,158 168,088 173,548 173,548 190,964 - 190,964 191,512 190,461 193,440
Benefits or Related Expenses - - - - - - N/A - - - - -
Borrowing Expenses - - - - - - - - - - - -
Other Expenses 396 1,388 2,010 6,916 8,058 8,058 - 8,060 8,060 8,060 8,060 8,060
Capital Expenditure 45,865 41,971 22,982 17,305 25,000 25,000 15,000 - 15,000 14,831 19,340 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

186,286 196,876 188,150 192,309 206,606 206,606 205,964 8,060 214,024 214,403 217,861 214,155

Crown Revenue and Capital Receipts

                       
Tax Revenue 11,346,026 11,239,156 11,846,511 12,485,685 12,969,000 13,183,000 N/A 13,498,000 13,498,000 14,275,000 14,905,000 15,504,000
Non-Tax Revenue - 1 - - - - N/A 80 80 80 80 80
Capital Receipts - - - - - - N/A - - - - -

Total Crown Revenue and Capital Receipts

11,346,026 11,239,157 11,846,511 12,485,685 12,969,000 13,183,000 N/A 13,498,080 13,498,080 14,275,080 14,905,080 15,504,080

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 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.

Significant changes in departmental appropriations in Vote Customs are discussed briefly below (there is no significant change in the non-departmental appropriations).

Departmental Output Expenses

Annual appropriations for the purchase of departmental outputs is a total of $190.964 million for 2016/17, an increase of $17.416 million compared with 2015/16. The net change in the total appropriation primarily relates to additional funding in Budget 2016 for:

  • providing a world-class experience at the border (a suite of border sector initiatives in the Business Growth Agenda Exports Markets work stream) - an increase (of $9.564 million) in the funding in 2016/17 compared to 2015/16
  • modernising and transforming the New Zealand Customs Service workforce - while funding (of $784,000) was provided for 2015/16, the total increases (by $3.974 million) from 2016/17.

That net change also includes additional funding in Budget 2015 for managing our border through:

  • the implementation and ongoing operation of next-generation SmartGate automated passenger processing technology - an increase (of $2.98 million) in the funding in 2016/17 compared to 2015/16
  • extended risk screening of departing passengers - an increase (of $674,000) in the funding in 2016/17 compared to 2015/16.

In the Clearance and Enforcement Services Related to Passengers and Crew appropriation, the mix of operational funding has changed. With the introduction of the passenger Border Clearance Levy (BCL) on 1 January 2016, the funding provided by the Crown will significantly decrease in 2016/17 (compared to prior years) as this funding is replaced by, and the appropriation transitions to, increased third party funding from the BCL. By 2018/19 this appropriation will be almost fully funded by the BCL.

Departmental output expenses are currently expected to increase to $193.440 million by 2019/20. From 2016/17, the total includes the additional funding provided in Budget 2016 for providing a world-class experience at the border (a suite of border sector initiatives in the Business Growth Agenda Export Markets work stream), and for modernising and transforming the New Zealand Customs Service workforce.

Over the last five years (comparing the total for 2011/12 and the total budgeted for 2015/16), the net funding for Vote Customs has increased by $33.523 million. This change primarily relates to an increase in the operational funding provided for the Joint Border Management System - an increase of $18.408 million (from $5.207 million to $23.615 million) over that five year period.

It also includes specific ongoing increases in operational funding provided in Budgets 2009, 2010 and 2011 for SmartGate (initially funded in Budget 2009, and then additional funding provided for increased capacity in Budget 2011), and disrupting 'P' supply and dismantling criminal networks through Digitally Enhanced Systems technology; in Budget 2014 for ongoing management of the changes to duty-free tobacco concessions; in Budget 2015 for Managing our Border through expanding SmartGate and extended risk screening of departing passengers, and Building Export Markets through growing secure exports (particularly to China and ASEAN); and in Budget 2016 for modernising and transforming the New Zealand Customs Service workforce.

Departmental capital expenditure

The total forecast capital expenditure for 2016/17 is $15 million, a decrease of $10 million from the estimated 2015/16 spend of $25 million. This decrease primarily relates to the timing and level of capital expenditure for projects. These projects include the Joint Border Management System, and the purchase of the next-generation technology SmartGates (for which capital funding was provided in Budget 2015 for 2015/16 and 2016/17).

Capital expenditure also includes the standard replacement of operational assets as required to maintain and increase capability, including upgrade of core business systems.

Crown revenue

Under Vote Customs, the New Zealand Customs Service collects revenue on behalf of the Crown by way of customs duty and GST on imports, together with excise duty on domestically manufactured alcohol, tobacco, and petroleum products, and excise equivalent duty on the same products imported into New Zealand.

Since 2011/12, Crown revenue collected by the New Zealand Customs Services has exceeded $11 million each year, and is forecast to steadily increase from the $12,486 million collected in 2014/15 to a total of $15,504 million in 2019/20.

The total Crown revenue forecast to be collected in 2016/17 is $13,498 million, an increase from the forecast total for 2015/16 of $12,947 million. That $13,498 million total is expected to be composed of $8,820 million in GST (65.3% of the total), $2,442 million in Customs duty (18.1% - including excise equivalent duty), and $2,236 million in excise duty (16.6%).

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

  2015/16 2016/17
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 8,138 8,138 9,477
Revenue from the Crown 7,919 7,919 9,205
Revenue from Others 219 219 272

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve the operation of secure and efficient border processes in relation to craft so that New Zealand remains safe and secure from risk associated with international craft movements.

How Performance will be Assessed and End of Year Reporting Requirements

  2015/16 2016/17
Assessment of Performance Final Budgeted
Standard
Estimated
Actual
Budget
Standard

Craft output: Craft operators are encouraged to assist and comply

     

Percentage of small marine craft arriving (estimated 600-700 small craft) that are boarded as soon as practicable after arrival in a New Zealand port

100% 100% 100%

Percentage of arriving commercial marine craft (including cruise ships) showing high risk or requiring administrative process (estimated 750-900 commercial craft) that are boarded while in a New Zealand port (see Note 1)

100% 100% 100%

Craft output: Craft operators' compliance is monitored

     

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% 5.0% 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
2015/16
Final Budgeted
$000
2016/17
Budget
$000
2017/18
Estimated
$000
2018/19
Estimated
$000
2019/20
Estimated
$000
Improving the efficiency and effectiveness of the border sector 2016/17 - 454 389 371 371
Modernising and transforming Customs' workforce 2015/16 139 841 841 841 841
Managing our Border: Screening departing passengers 2015/16 133 268 268 268 268
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 (10) (10) (7) (5) (5)

Reasons for Change in Appropriation

The increase in this appropriation for 2016/17 is due mainly to:

  • the increased funding of $702,000 for workforce modernisation and transformation
  • increased funding of $454,000 to improve the efficiency and effectiveness of the border sector.

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#

  2015/16 2016/17
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 70,082 70,082 75,156
Revenue from the Crown 9,249 9,249 17,393
Revenue from Others 60,833 60,833 57,763

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the operation of secure and efficient border processes in relation to goods so that New Zealand remains safe and secure from risk arising from international trade, while ensuring that New Zealand's trade flows freely and the due Crown revenue can be collected.

How Performance will be Assessed and End of Year Reporting Requirements#

 

  2015/16 2016/17
Assessment of Performance Final Budgeted
Standard
Estimated
Actual
Budget
Standard

Trade

     

Trade intermediate outcome: Importers and exporters are satisfied with the quality of service delivery

     

Minimum percentage of importers and exporters satisfied or very satisfied with the overall quality of Customs' service delivery (as measured by Customs' stakeholder survey) (see Note 1)

85% 85.9% 85%

Trade intermediate outcome: Importers and exporters feel encouraged and assisted to comply

     

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) (see Note 1)

80% 80.4% 80%

Maximum percentage of X-ray inspections undertaken on Secure Exports Scheme (SES) containers (see Note 2)

New measure 0.005% 0.05%

Minimum percentage of X-ray inspections undertaken on non-SES containers (see Note 2)

New measure 0.727% 0.5%

Goods processing output: Legitimate goods cross the border with minimal interaction

     

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 7.5-8.5 million import transactions, 2.5-3.5 million export transactions, and 3,600-4,200 excise returns)

95% 99.7% 95%

Minimum percentage of import transactions that are deemed compliant based on risk assessment and proceed without further intervention (see Notes 3 and 4)

95% 97.6% 95%

Minimum percentage of export transactions that are deemed compliant based on risk assessment and proceed without further intervention (see Notes 3 and 4)

99% 99.7% 99%

Goods processing output: Traders' compliance is monitored

     

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

90% 90% 90%

Minimum number of risk-based trade compliance audit activities undertaken (see Note 5)

400 400 400

Protection (see Note 6)

     

Protection intermediate outcome: The New Zealand public is protected through the interception of harm and potential harm

     

The value of harm (NZ$) avoided through Customs' drug seizures, as measured by indicative data from the New Zealand Drug Harm Index (see Note 7)

$100 million-$200 million $200 million $100 million-$200 million

Minimum losses (NZ$) incurred by importers of illegal goods through seizure of illicit drugs, goods infringing intellectual property, and the associated proceeds of crime (see Note 7)

$10 million $100 million $10 million

Protection intermediate outcome: The New Zealand public is confident that Customs protects New Zealand through the interception of harm and potential harm

     

Minimum percentage of public confident that Customs protects New Zealand from external threats (see Note 8)

Revised measure 40% 40%

Goods processing output: Goods that show risk are subject to further intervention

     

Minimum percentage of total mail items that result in an enforcement consequence following risk assessment (see Note 9)

0.02% 0.03% 0.02%

Investigations output: Goods that show risk are subject to further intervention

     

Minimum percentage of investigation cases (estimated between 400-600 cases) finalised within 12 months of commencement (see Note 10)

90% 96% 90%

Minimum percentage of serious investigation cases (see Note 11) that lead to punitive action (see Note 12)

90% 95% 90%

Note 1 - Customs' stakeholder survey has a 4% to 5% margin of error at 95% confidence. A 90% result, for example, could arise when the true actual level is 85% and, if so, a different sample could have generated a result of 80%. Budget standards for survey results build in an allowance for this expected range of results.

Note 2 - These measures indicate reduced intervention with export shipments where Customs can assure New Zealand's trade partners that the goods are secure. Exporters who are members of Customs' trusted trader programme, the Secure Exports Scheme (SES), can provide that assurance through their security processes, thereby reducing the need for inspecting their goods. These measures relate to full container loads.

Note 3 - The percentage of import transactions deemed compliant is lower than the percentage of export items deemed compliant because the nature of the risk is different between imports and exports; the nature of the traders involved is different, and risk for many exports is managed under the SES.

Note 4 - '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 5 - Trade compliance field audits are carried out on the basis of identified risk, and this can result in complex audits.

Note 6 - The following output classes also contribute to the Protection outcome: Clearance and enforcement services related to passengers 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 7 - The value of drug harm avoided, and loss to importers of illegal goods through seizure of drugs and cash is affected by drug importation activity.

Note 8 - From 2016/17, this will be measured by a survey of the New Zealand public (in previous years, the result was obtained from travellers surveyed through Customs' stakeholder survey). The measure gauges public confidence that Customs protects against people coming into or leaving New Zealand illegally, illicit drugs, people with criminal or terrorist intent, cultural and heritage items, endangered species and flora and fauna, illegal and stolen goods, and indecent materials entering or leaving New Zealand.

Note 9 - Enforcement consequence is comprised of Customs' Activity Reports raised at the International Mail Centre; and items referred to the Ministry for Primary Industries, New Zealand Post, or Ministry of Health. Activity Reports are raised when non-compliant items are found, and action is taken in response.

Note 10 - Investigations measures apply to all investigation cases. The 10% of investigation cases that take more than 12 months are particularly complex, and may be connected to subsequent investigations. They may be open for a number of years.

Note 11 - A serious investigation case involves, or has the potential to involve, serious community harm. Examples of serious investigation cases would include those that involve 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 12 - 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; imposition of section 223 Customs and Excise Act 1996 penalty ie, fine or other penalty; 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
2015/16
Final Budgeted
$000
2016/17
Budget
$000
2017/18
Estimated
$000
2018/19
Estimated
$000
2019/20
Estimated
$000
Improving the efficiency and effectiveness of the border sector 2016/17 - 4,868 4,468 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 2015/16 167 355 355 355 355
Share of costs for Budget 2015 whole-of-government initiatives 2015/16 (62) (62) (44) (33) (33)

Reasons for Change in Appropriation#

The increase in this appropriation for 2016/17 is due to increased funding of $4.868 million to improve the efficiency and effectiveness of the border sector.

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#

  2015/16 2016/17
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 61,246 61,246 68,164
Revenue from the Crown 45,825 45,825 17,613
Revenue from Others 15,421 15,421 50,551

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the operation of secure and efficient border processes in relation to passengers and crew so that New Zealand remains safe and secure from risk arising from international travel, while ensuring that travel to and from New Zealand flows freely.

How Performance will be Assessed and End of Year Reporting Requirements#

  2015/16 2016/17
Assessment of Performance Final Budgeted
Standard
Estimated
Actual
Budget
Standard

Travel intermediate outcome: Travellers are satisfied with the service received during immigration processing

     

Minimum percentage of arriving international air passengers satisfied or very satisfied that Customs processes passengers quickly and conveniently (as measured by Customs' stakeholder survey) (see Note 1)

77% 80% 77%

Minimum percentage of arriving international air passengers satisfied or very satisfied that Customs provides a friendly welcome to New Zealand (as measured by Customs' stakeholder survey) (see Note 1)

80% 84% 80%

Travel intermediate outcome: Travellers feel encouraged and assisted to comply

     

Minimum percentage of arriving international air passengers that find the information provided by Customs helpful (as measured by Customs' stakeholder survey) (see Note 1)

85% 85% 85%

Minimum percentage of arriving international air passengers who trust Customs (as measured by Customs' stakeholder survey) (see Note 1)

85% 86% 85%

Passenger processing output: Legitimate travellers cross the border with minimal intervention

     

Minimum percentage of arriving international air passengers and crew (estimated 5.5-6.1 million passengers and crew) who are deemed compliant based on risk assessment and facilitated without further intervention (see Notes 2, 3 and 4)

98% 99.4% 98%

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

90% 96% 90%

Passenger processing output: Passengers who show risk are subject to further intervention

     

Percentage of arriving international air passengers and crew who are selected for further risk assessment at Customs' secondary areas (see Note 4)

0.6%-1.0% 0.6% 0.6%-1.0%

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 (see Note 5)

20%-30% 30.8% 20%-30%

Passenger processing output: Passengers can complete their transactions with government easily in a digital environment

     

Minimum percentage of eligible (see Note 6) arriving New Zealand and Australian international air passengers who use SmartGate

60% 67.1% 70%

Minimum percentage of eligible (see Note 6) departing New Zealand and Australian international air passengers who use SmartGate

60% 60.5% 65%

Note 1 - Customs' stakeholder survey has a 4% to 5% margin of error at 95% confidence. This means that there is uncertainty about what the actual level is. For example, a score of 90% could reflect a true actual level of 85%. With an 85% actual level, a different sample could have generated a result of 80%. Budget standards for survey results build in an allowance for this expected range of results.

Note 2 - All passengers and crew are assessed for risk, including screening against advance passenger information. Information is collected from all passengers and crew as part of the facilitation process. Passengers and crew may be subject to dog and X-ray screening, and may also be referred from Ministry for Primary Industries screening.

Note 3 - '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.

Note 4 - 0.6% to 1.0% of passengers and crew are selected for further risk assessment, and directed to secondary areas for further intervention. From this point on, passengers and crew are no longer being facilitated, and Customs is carrying out an enforcement role.

Note 5 - All passengers who are searched produce either intelligence information, or discovery of prohibited, restricted, or dutiable items, or both.

Note 6 - For the purposes of this measure, 'eligible' means passengers aged 12 years and over travelling on a New Zealand or Australian electronic passport and arriving at or departing from airports that have SmartGate. Extending eligibility can affect use by existing eligible passengers where, for example, families do not complete SmartGate processing if one child does not process successfully.

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
2015/16
Final Budgeted
$000
2016/17
Budget
$000
2017/18
Estimated
$000
2018/19
Estimated
$000
2019/20
Estimated
$000
Improving the efficiency and effectiveness of the border sector 2016/17 - 2,164 1,675 1,111 1,111
Managing our Border: Expanding SmartGate 2015/16 1,454 4,434 4,990 4,386 4,386
Managing our Border: Screening departing passengers 2015/16 166 334 334 334 334
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 (83) (83) (59) (44) (44)
Changes to Duty-Free Tobacco Concessions 2014/15 420 420 420 420 420

Reasons for Change in Appropriation#

The increase in this appropriation for 2016/17 is mainly due to:

  • increased funding of $3.148 million for Managing our Border by expanding the use of SmartGate automated passenger processing technology
  • increased funding of $2.164 million to improve the efficiency and effectiveness of the border sector.

 

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#

  2015/16 2016/17
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 12,090 12,090 13,143
Revenue from the Crown 10,318 10,318 11,375
Revenue from Others 1,772 1,772 1,768

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the provision of information, intelligence and risk assessment services to external clients, and the operation of secure and efficient information and intelligence services in relation to people, goods, and craft crossing the border, and in relation to goods that attract excise duties.

How Performance will be Assessed and End of Year Reporting Requirements#

  2015/16 2016/17
Assessment of Performance Final Budgeted
Standard
Estimated
Actual
Budget
Standard

Protection intermediate outcome: Users of information and intelligence products are satisfied with the service delivered

     

Minimum percentage of external clients who are satisfied with intelligence and risk products (estimated between 900-1,100) disseminated by Customs

80% 80% 80%

Minimum percentage of external clients who are satisfied with Customs' management of alerts created by their agency (estimated between 40,000-45,000 alerts)

80% 80% 80%

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

Revised measure 80% 80%

Information and intelligence services output: Surveillance resources are allocated to areas of the highest risk

     

Minimum percentage of accepted agency requests successfully completed (see Note 1)

New measure 82% 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
2015/16
Final Budgeted
$000
2016/17
Budget
$000
2017/18
Estimated
$000
2018/19
Estimated
$000
2019/20
Estimated
$000
Improving the efficiency and effectiveness of the border sector 2016/17 - 81 24 6 6
Modernising and transforming Customs' workforce 2015/16 142 863 863 863 863
Managing our Border: Screening departing passengers 2015/16 133 268 268 268 268
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 (9) (9) (6) (5) (5)

Reasons for Change in Appropriation#

The increase in this appropriation for 2016/17 is mainly due to:

  • the increased funding of $721,000 for workforce modernisation and transformation
  • increased funding of $81,000 to improve the efficiency and effectiveness of the border sector.

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#

  2015/16 2016/17
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 9,115 9,115 9,232
Revenue from the Crown 7,819 7,819 9,069
Revenue from Others 1,296 1,296 163

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#

  2015/16 2016/17
Assessment of Performance Final Budgeted
Standard
Estimated
Actual
Budget
Standard

International services and ministerial servicing intermediate outcome: Minister's satisfaction

     

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

Meets expectations Meets expectations Meets expectations

International services and ministerial servicing output: Delivery of draft responses and replies

     

Minimum percentage of draft replies to ministerial correspondence (estimated between 70-100 items) that are provided within 20 working days or as agreed with the Minister (see Note 1)

90% 94% 90%

Percentage of draft responses to parliamentary questions (estimated between 20-50 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
2015/16
Final Budgeted
$000
2016/17
Budget
$000
2017/18
Estimated
$000
2018/19
Estimated
$000
2019/20
Estimated
$000
Improving the efficiency and effectiveness of the border sector 2016/17 - 73 21 5 5
Building Export Markets: Growing secure exports to China and ASEAN 2015/16 906 796 796 796 796
Modernising and transforming Customs' workforce 2015/16 206 1,250 1,250 1,250 1,250
Managing our Border: Screening departing passengers 2015/16 33 67 67 67 67
Share of costs for Budget 2015 whole-of-government initiatives 2015/16 (8) (8) (6) (4) (4)

Reasons for Change in Appropriation#

The increase in this appropriation for 2016/17 is mainly due to:

  • the increased funding of $1.044 million for workforce modernisation and transformation
  • increased funding of $73,000 to improve the efficiency and effectiveness of the border sector
  • a decrease in the funding provided for projects to support customs sector development in the Pacific and in other regions.

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#

  2015/16 2016/17
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 4,545 4,545 4,791
Revenue from the Crown 4,523 4,523 4,745
Revenue from Others 22 22 46

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the provision of quality, timely, and cost-effective policy advice to Ministers to support decision-making by Ministers on border security, border management, customs revenue, and other policy proposals.

How Performance will be Assessed and End of Year Reporting Requirements#

 

  2015/16 2016/17
Assessment of Performance Final Budgeted
Standard
Estimated
Actual
Budget
Standard

Policy advice intermediate outcome: Minister's satisfaction with policy advice

     

Minister's satisfaction with policy advice, as measured by the common satisfaction survey (minimum percentage score) (see Notes 1 and 2)

75% 75% 75%

Policy advice output: Quality of policy papers

     

Median technical quality assessment score (percentage) for a sample of policy papers as assessed by NZIER with a robustness of at least 75% (see Note 3)

75% 75% 75%

Policy advice: cost-effectiveness

     

Maximum total cost (NZ$) of professional staff per hour of producing outputs (see Note 4)

$98 $112 $103

Note 1 - The budget standard is based on the Minister's preference that a score of 70% corresponds to "meets expectations".

Note 2 - Reporting of this indicator is provisional on the Minister completing the assessment.

Note 3 - The higher the robustness score, the stronger the methodological quality of the completed assessment. The estimated robustness is based on NZIER carrying out a review of at least 10 randomly selected Policy Advice output papers.

Note 4 - Based on the allocation of FTEs to output Policy Advice appropriated by the Policy Advice output appropriation.

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
2015/16
Final Budgeted
$000
2016/17
Budget
$000
2017/18
Estimated
$000
2018/19
Estimated
$000
2019/20
Estimated
$000
Improving the efficiency and effectiveness of the border sector 2016/17 - 325 154 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 33 67 67 67 67
Low-value Imported Goods project 2015/16 840 - - - -
Share of costs for Budget 2015 whole-of-government initiatives 2015/16 (5) (5) (4) (2) (2)
Modernising and transforming Custom's workforce 2015/16 133 808 808 808 808

Reasons for Change in Appropriation#

The increase in this appropriation for 2016/17 is mainly due to:

  • the increased funding of $675,000 for workforce modernisation and transformation
  • increased funding of $325,000 to improve the efficiency and effectiveness of the border sector
  • a decrease in one-off funding in 2015/16 for the Low-value Imported Goods project.

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#

  2015/16 2016/17
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 8,332 8,332 11,001
Revenue from the Crown 8,105 8,105 10,714
Revenue from Others 227 227 287

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the operation of secure and efficient processes in relation to the collection of due Crown revenue to ensure that due Crown revenue is collected.

How Performance will be Assessed and End of Year Reporting Requirements#

  2015/16 2016/17
Assessment of Performance Final Budgeted
Standard
Estimated
Actual
Budget
Standard

Revenue intermediate outcome: Revenue clients are encouraged and assisted to comply

     

Minimum percentage of revenue that is collected electronically

95% 99% 95%

Minimum number of clients that meet credit criteria and have access to the deferred payment scheme

8000 8760 8000

Revenue output: Due revenue is collected

     

Minimum percentage of revenue that is collected by the due date

98% 99.1% 98%

Revenue output: Revenue clients' compliance is monitored

     

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

0.06% 0.03% 0.06%

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

$15 million $42 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
2015/16
Final Budgeted
$000
2016/17
Budget
$000
2017/18
Estimated
$000
2018/19
Estimated
$000
2019/20
Estimated
$000
Improving the efficiency and effectiveness of the border sector 2016/17 - 1,599 1,305 1,283 1,283
Modernising and transforming Customs' workforce 2015/16 164 996 996 996 996
Building Export Markets: Growing secure exports to China and ASEAN 2015/16 78 78 78 78 78
Share of costs for Budget 2015 whole-of-government initiatives 2015/16 (11) (11) (8) (6) (6)

Reasons for Change in Appropriation#

The increase in this appropriation for 2016/17 is mainly due to:

  • the increased funding of $832,000 for workforce modernisation and transformation
  • increased funding of $1.599 million to improve the efficiency and effectiveness of the border sector.

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

  2015/16 2016/17
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Forests/Agricultural - - -
Land - - -
Property, Plant and Equipment 11,006 11,006 7,565
Intangibles 13,994 13,994 7,435
Other - - -

Total Appropriation

25,000 25,000 15,000

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve the renewal and replacement of life-expired 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

  2015/16 2016/17
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 this appropriation for 2016/17 is as a result of the profile and timing of the delivery of capital expenditure projects between financial years.

Capital Injections and Movements in Departmental Net Assets

New Zealand Customs Service

Details of Net Asset Schedule 2015/16
Estimated Actual
$000
2016/17
Projected
$000
Explanation of Projected Movements in 2016/17
Opening Balance 136,818 145,184  
Capital Injections 8,366 4,249 Injection relates to the purchase of next-generation technology SmartGates and additional capital to support improving the efficiency and effectiveness of the border sector.
Capital Withdrawals - -  
Surplus to be Retained (Deficit Incurred) - -  
Other Movements - -  

Closing Balance

145,184 149,433  

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

  2015/16 2016/17
  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 intended to achieve provisioning 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

  2015/16 2016/17
Assessment of Performance Final Budgeted
Standard
Estimated
Actual
Budget
Standard

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

0.06% 0.03% 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.

World Customs Organization (M21)#

Scope of Appropriation#

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

Expenses#

  2015/16 2016/17
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 58 58 60

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#

  2015/16 2016/17
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.

Reasons for Change in Appropriation#

The increase in this appropriation for 2016/17 is due to an increase in the sum payable to WCO and a forecast exchange rate change.