Customs (Levies and Other Matters) Amendment Bill

I move, That the Customs (Levies and Other Matters) Amendment Bill be now read a second time.

I present a legislative statement on the Customs (Levies and Other Matters) Amendment Bill. This bill aims to—

DEPUTY SPEAKER: I was just going to say, if you’re presenting a legislative statement—I haven’t got that on there, so I’m just going back to get the right word. That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon CASEY COSTELLO: I move that the Customs (Levies and Other Matters) Amendment Bill be now read a second time.

This bill aims to improve revenue collection on goods by making collection fairer and more effective. The bill amends three existing Acts: the Customs and Excise Act 2018, the Waste Minimisation Act 2008, and the Goods and Services Tax Act 1985. It makes small but important changes to those existing pieces of legislation.

The primary aim of the bill is to introduce a levy regime to modernise the legal framework under which Customs recovers the costs of its goods management activities. These activities keep New Zealand safe and support our economy through the efficient flow of legitimate trade and compliance with border obligations. The smooth flow of trade is vital to our economy. I am very pleased and proud to say that Customs’ border management system is demonstrably one of the most efficient in the world. Most legitimate trade crosses the border quickly, with a minimum of disruption to industry. A recent study found that 98.7 percent of trade transactions, other than those referred for compliance checks, are processed within five minutes.

Customs already has an existing cost recovery regime in the Customs and Excise Act 2018, but this bill makes it more robust by enabling levies to be made as an alternative to fees by recovering goods management - related costs. Levies are a more appropriate type of charge when costs are recovered for a specific purpose and there may not be a direct line of sight between the costs and a payer. Levies are charged on classes of people or organisations—often those creating risks—to recover the costs of activities undertaken to achieve certain purposes, such as risk management. A fee, on the other hand, tends to be paid by an individual, person, or organisation for a specific service that they individually benefit from. An example of a fee is paid by an individual for their passport—[Minister coughs] Excuse me.

DEPUTY SPEAKER: Now, this is the point of the day where I say have a drink of water. Just take your time, it’s OK.

Hon CASEY COSTELLO: Excuse me. [Minister coughs] I came out of my deathbed to come here! An example of a fee is a fee paid by an individual for a passport. The bill is only enabling legislation and does not itself create new levies or change existing cost recovery rates. [Minister coughs]

DEPUTY SPEAKER: It’s OK. I’m going to allow, if the Minister would like, another Minister to continue the speech. It might be helpful. Thank you, Scott Simpson.

Hon CASEY COSTELLO: Yes, thank you, Scott.

on behalf of the Minister of Customs: Thank you, Madam Speaker. Just to finish off where my colleague has left off, under a recent separate but related process—following extensive engagement with industry—the Government has made decisions to support Customs’ financial sustainability and to improve fairness to fee-payers and taxpayers by ensuring that those who create the need for or benefit from Customs’ services bear the costs of those services.

This bill enables some of those decisions to be implemented. The first is to replace Customs’ existing goods fees with levies from 1 April 2026. In addition to becoming levies, those cost recovery charges will be restructured to avoid some current cross-subsidisation between the types of fee-payers.

As well as enabling levies on goods, the bill will also enable a levy on arriving commercial vessels to fund Customs’ costs related to their management. This will end the situation whereby ship costs are partly met by goods fees. We need robust funding mechanisms in place and these need to be continually modernised to support Customs’ work to eliminate border and revenue risk and efficiently facilitate legitimate trade.

There are important safeguards in the bill. The first is that before any new levy can be made, the Minister of Customs is required to consult the appropriate persons, representative groups, Government departments, and Crown agencies. A recent example of this type of industry engagement was the process that the Government undertook at the end of last year to test and inform advice which led to Customs’ goods cost recovery changes. Public consultation resulted in submissions being received from a range of businesses and industry bodies. Officials held discussions with a range of shipping, airline, freight, and e-commerce companies.

Alongside this, a stakeholder reference group helped to ensure that the consultation material was high quality, and an industry-led, low-value goods technical advisory group was involved in testing the feasibility of options put forward to recover the cost of activities related to these goods.

The second safeguard is that the bill limits the scope of the levy-making power. To be recovered, costs must be incurred by Customs in or for the purpose of performing a function under the Customs and Excise Act or any other legislation relating to goods management.

The bill also prevents duplicate or overlapping recovery of costs—for example, costs that are already being recovered under the traveller-related levy. The border processing levy cannot be recovered under a goods levy.

The bill also makes specific improvements to two other revenue systems. Part 2 amends the Waste Minimisation Act 2008 to clarify an existing power that further regulations can specify agencies to collect fees to fund product stewardship schemes which ensure that the environmental impacts of a product are minimised across its lifetime. Those amendments also enable Customs’ trade single window system to be used if Customs was to become a fee collector in the future.

Part 3 amends the Goods and Services Tax Act 1985, and it will benefit some importers returning imported goods that do not meet specifications or are faulty. These changes will make it easier for replacement or repaired goods to be exempt from GST or for GST to be refunded as is appropriate.

The Foreign Affairs, Defence and Trade Committee considered the bill and reported back to the House on 9 May this year, and I want to, on behalf of the Minister, thank the committee and the chair, Tim van de Molen, for its careful consideration of the bill. I appreciate its efficient deliberation of the bill, which means the benefits can be realised quickly. The committee recommended that the bill proceed without amendment.

In summary, this bill improves existing revenue collection systems and supports regulatory efficiency. The amendments will ensure Customs can fulfil its important goods management role at the border to protect New Zealand. Again, I thank the committee for its considered work and to those who took the time to provide a submission on the bill. I look forward to the passage of the bill through its remaining stages and commend the bill to this House.

This debate is interrupted and is set down for resumption next sitting day. The House stands adjourned until 2 p.m. on Tuesday, 19 August 2025.

Debate interrupted.

The House adjourned at 5.55 p.m.