Government imposes $20m levy on trade

By KEVIN TAYLOR political reporter

A new security fee will be charged on businesses by the Government to cover the cost of meeting higher security standards being imposed on trade by the United States.

About $20 million is expected to be collected from the new "security compliance fee", Customs Minister Rick Barker said yesterday.

The fee is planned to be introduced from July next year, but it is sure to raise the hackles of the business sector, which is already sensitive to more compliance costs being imposed.

The proposed amount to be collected is more than double the controversial flatulence tax, which the Government backed down on last month after extensive protests from farmers.

Barker said that in the wake of the September 11, 2001, terrorist attacks the US was insisting traders have security systems to prove that goods crossing its borders have not been interfered with.

European Union nations and other countries that New Zealand traded with would also implement the tougher standards.

New Zealand Customs would need about 130 extra staff and new x-ray Machines and other gear to ensure high-risk cargo was checked and cleared without delay.

The extra staff and gear were announced in the Budget, and since then the Government has outlined plans to inspect all shipping containers coming into New Zealand under tough new biosecurity measures.

But Barker said the cost of establishing and maintaining the new security measures demanded by the US would exceed Customs' budget, and its "core responsibility of protecting New Zealanders".

"So the Government has decided that those who benefit from New Zealand's reputation as a safe and secure trading partner should contribute toward the cost of meeting these new requirements."

The security fee would recover about $8 million from the export sector, $4 million from importers and $8 million for security screening of goods trans-shipped through New Zealand.

"The new standards would mean that trading partners could be confident that cargo sealed with a New Zealand Customs-approved seal is secure and therefore did not need to be checked on arrival at their wharves."

Barker said if New Zealand did not comply with the tough new rules vital exports could sit on foreign wharves for days awaiting Customs clearance while competitors with better security agreements got their cargo across the border without delay.

He said he was inviting business representatives to work with Customs concerning the fee.

The Government is developing a proposal to charge a flat fee of between $450 and $650 for the processing of the outward cargo report that must be lodged for every departing ship or aircraft.

It will be up to the transport or shipping company how the charge is passed on.

In the year to June 2003, the total value of New Zealand's trade was about $62.1 billion.

Background papers released by Barker's office said the $20 million traders were being asked to contribute amounted to less than 0.03 per cent of the country's total trade.