New passport chips account for only fraction of price

The Department of Internal Affairs has denied claims that it is price gouging travellers with its charges for new electronic passports.

The price of an adult passport more than doubled last week, from $71 to $150. The fee for a child's passport jumped from $36 to $80.

Internal Affairs Minister Rick Barker said the fee increase was necessary to recover the costs of new "anti-terrorist" passports with computer chips to store personal data and digital photos.

Internal Affairs has confirmed that the new computer chips account for only $22 of the increase per passport.

According to projections published in The Independent newspaper yesterday, the remaining $57 "excess" per passport would add up to $22.8 million extra a year.

However, Internal Affairs spokesman Tony Wallace said the $22 chip was only one component.

The fee increase included the cost of developing and introducing e-passports, and the cost of replacing the present passport system, which had not been updated since 1992 - light years ago in terms of information technology advances.

The increase was also to cover the increased cost of anti-fraud measures, beefed up security investigations into passport applications and other measures.

Some of the fee increase was to recover past costs, he said.

"It's not a money spinner.

"It relates to upgrading that's under way, our fees are generally calculated on a cost-recovery basis, it's not like we're creaming any money off here."

One exception to the "cost-recovery" approach was the cost of children's passports, which were subsidised by the Government because of the impact of across-the-board costs on families, he said.

"These fees are not set in concrete - in 2003, we were able to reduce fees slightly as a result of certain cost efficiencies, and in a couple of years, it could very well go down again," said Mr Wallace.

Travel Agents Association chief executive Paul Yeo said some members had expressed concern at the fee rise and asked the organisation to raise the issue with the department.

He said the size of the fee increase was "very disappointing" - particularly as it was so soon after the decision in April to halve the validity of passports from 10 years to five. "That by itself effectively doubled the price of passports."

"Outbound travel has been booming for the last few years; I would hate to think it is simply a revenue gathering exercise by the Government."

DO THE NEW PASSPORTS COST TOO MUCH?

Critics say

Last week's $79 fee increase for an adult passport was supposed to pay for computer chips which store personal data and digital photos.

However, the chip costs only $22 per passport - leaving a $57 windfall to the Government.

That windfall could add up to nearly $230 million over 10 years.

Internal Affairs replies

The fee increase also includes the cost of replacing the present passport system, anti-fraud measures, beefed-up security investigations into passport applications and other measures.

Fees are "not set in concrete" and may come down in future.

- NZPA