Cruise ship travellers to pay more than others under border clearance levy

Cruise ship travellers are likely to be charged a higher rate – possibly nearly $3 a person more – than others under a new levy imposed from January on all travellers arriving and leaving New Zealand.

A public consultation document on the border clearance levy, confirmed in the government's May Budget, recommends a higher rate for cruise ship travellers reflecting the extra costs incurred by the Ministry for Primary Industries and Customs New Zealand in processing cruise ships stopping at multiple ports.

The original levy cost was estimated at $16 for arriving passengers and $6 for those departing. The consultation documents suggests a range of $15.20-15.90 for arriving passengers, $19.00-19.70 for arriving cruise ship travellers, and $2.60-3.10 for departing travellers.

The new tax comes on top of existing airport charges.

By 2017/2018, the levy is expected to fully fund the $103 million a year it costs to protect New Zealand from pests, diseases and contraband. Treasury documents released today show it's likely to return Crown savings of $25.9 million in 2015/16, $78 million in 2016/2017 and $104 million by 2017/2018.

Despite savings from the levy, the Treasury didn't support a Budget decision to reinvest an additional $4 million in operating funding in the 2015/2016 financial year and a one-off capital injection of $2 million, plus $4.6 million in extra operating funding from 2016/17 onward to increase staff numbers, x-rays and dog inspections at the border.

There has been increased demand for MPI and Customs services at the border with air passenger volumes having grown 19% and cruise ship arrivals up around 80% in the past five years. Air passenger growth is expected to continue at near 3.5% annually.

The consultation document says the risk profile of passengers and crew is also changing, with more arrivals from emerging economies that carry higher risk. Social and economic costs of not meeting these risks can be high – for example the current Queensland fruit fly response is expected to cost around $17 million while the estimated economic cost of a foot and mouth disease outbreak as occurred in the UK in 2001 would be up to $16 billion.

It's expected that airlines and cruise ship operators will collect the levy on behalf of government and the document recommends all those buying tickets before January 1, even if travelling later, be exempted. No exemptions are recommended with all travellers, including crew, to be charged.

The document said Customs and MPI may also consider alternative charging arrangements in future to recover the costs when higher levels of service are required, such as servicing ad hoc arrivals or remote locations, establishment costs for new and restart airports, and VIP processing.

Three public meetings are being held in Auckland, Wellington, and Christchurch over the next two weeks on the levy, with input sought on how it is collected, if rates should differ by transport type, and possible exemptions. Submissions close on July 28 and the government will make final decisions in October/November.

(BusinessDesk)