New Zealand Parliament Debates Customs Levy Bill: A Step Towards Enhanced Border Efficiency

Wellington – The New Zealand House of Representatives recently convened to discuss the first reading of the Customs (Levies and Other Matters) Amendment Bill, marking a pivotal moment in the nation's approach to border management. Introduced by Hon Casey Costello, Minister of Customs, the bill aims to modernize customs operations through a strategic levy regime, promising more equitable revenue collection while supporting national safety and economic stability.

The legislation seeks amendments to three key legislative acts: the Customs and Excise Act 2018, the Waste Minimisation Act 2008, and the Goods and Services Tax Act 1985. At its core, the bill proposes a shift from traditional fee-based recovery to a levy system that aligns with public sector cost-recovery guidelines. This transition is designed not only to bolster revenue collection but also to enhance fairness by distributing costs across broader classes of goods and services.

Minister Costello highlighted the potential for the new levy system to streamline operations at New Zealand’s borders, which serve as vital economic hubs facilitating trade and tourism. The proposed changes aim to reflect the risks and costs associated with different classes of goods, thereby providing a more balanced approach to cost recovery that parallels existing frameworks for other border agencies.

The debate saw widespread support across party lines, though not without reservations. Hon Jenny Salesa from Labour acknowledged the bill’s merits but voiced concerns about its implications for small businesses, emphasizing the need for rigorous stakeholder consultation as mandated by the legislation. She underscored the importance of ensuring that new administrative requirements do not disproportionately burden smaller enterprises.

Echoing these sentiments, Francisco Hernandez, representing the Green Party, praised the bill's alignment with environmental objectives and its role in enhancing efficiency at customs. He pointed to amendments under the Waste Minimisation Act as particularly significant for advancing New Zealand’s commitment to a circular economy.

From the ACT party, Laura McClure lauded the bill’s focus on operational efficiencies that could spur economic growth by making New Zealand more accessible for international trade. Meanwhile, Tim van de Molen of National highlighted specific improvements in GST refunds for imported goods returned overseas under warranty, framing these changes as practical enhancements to support businesses engaged in global commerce.

The legislative framework and consultation processes were focal points for several speakers. Tim Costley, also from National, noted the bill’s enabling nature, which allows for detailed secondary legislation to set specific levies. He stressed the importance of transparency and fairness through mandated consultations with stakeholders.

Hon Dr Deborah Russell of Labour called for careful scrutiny at the select committee stage regarding the differentiation between fees and levies, emphasizing that this distinction is crucial for ensuring equitable outcomes in cost recovery.

The discussion also touched on environmental considerations. Dana Kirkpatrick from National highlighted the bill’s provisions to streamline product stewardship fee collections under the Waste Minimisation Act, which are expected to support more efficient management of environmental fees.

Concluding the debate, Hon Rachel Brooking from Labour focused on Part 2 of the bill concerning amendments in the Waste Minimisation Act related to product stewardship. She advocated for a circular economy approach and discussed Tyrewise as an example of successful product stewardship that aligns with broader environmental goals.

Dr Hamish Campbell, also representing National, provided broad support, noting Customs' vital role in managing economic activities at New Zealand’s borders. He endorsed the bill's key changes aimed at improving border management through effective levy implementation and fair GST treatment for imported goods.

The motion to read the Customs (Levies and Other Matters) Amendment Bill a first time was agreed upon by consensus, with further consideration delegated to the Foreign Affairs, Defence and Trade Committee. This move signals a collective commitment within Parliament to refine and implement these reforms, ensuring New Zealand’s borders remain efficient, secure, and conducive to economic prosperity.

In 2022-23, Customs collected $18.6 billion in revenue, whereas in 2023-24, the collection was slightly lower at $17.4 billion—a decrease of over a billion dollars. This bill is part of efforts to address these challenges and optimize customs operations for future sustainability.

The proposed levy-making process mandates consultation with all relevant stakeholders and affected parties, ensuring transparency throughout its implementation.