Speech to Customs Brokers and Freight Forwarders

Conference
Rotorua

Thank you for the invitation to address your conference. I understand that it has been the practice for the Minister of Customs to speak at the annual meeting of the Society of Customs Brokers. I am very pleased to be here today to carry on that tradition, acknowledging that this is the first annual gathering of the new Federation.

I am sure that you will appreciate that as someone new to the workings of central government and to the roles of various government agencies, the last few months has been a rather concentrated round of briefings and very much a sharp learning curve.

It has certainly been an eye- opener to discover the variety of functions in which Customs is involved.

What I would like to spend some time on today is the matter of client service. That particular topic is naturally something that is vital to you in your respective roles. Your clients are looking for consistently good service. This usually means minimal delay in clearing goods through Customs. Any holdups may well result in your client engaging another company in future, so it is essential that quality service is provided.

Weve now got a Customs Service, we left the Department behind late last year with the introduction of the new Customs and Excise Act.

Customs assure me its not just a change in name, but it will provide the focus they wish to take in the future - that of providing the best quality service at all times to its client base - the commercial sector, travellers or the various other government agencies that the Customs Service regularly acts on behalf of.

A number of programmes with a focus on client service have been introduced and a significant amount of work relating to introducing a service philosophy into the day to day work is ongoing.

Considerable research has been done in the area of client perceptions of the New Zealand Customs Service, the delivery of its services, and the attitude and efficiency of its staff.

An annual survey of the Services clients shows a generally favourable improvement over the last three years.

These surveys have assisted in modifying current practices and in planning the Modernisation projects currently underway.

Im pleased to see that these surveys will be ongoing.

Some of the positive findings from the latest survey:

the general image of positive change in the Customs Service;
Customs also rated favourably when compared to other Government agencies. I see Police rated 1st, Customs 3rd and Health were a bit further down the field. As well as Customs Minister, Im also Associate Minister of Health and I note that Health could obviously take a leaf out of the Customs book in this area;
Also rated favourably were:

the introduction of paperless entries and the resulting efficiency gains,
the move to a non-confrontational relationship, and
a stronger client focus.
Its encouraging to see that 9 out of every 10 of 150 importers and brokers surveyed thought that the Service was managing its two roles --

controlling the movement of goods across our borders
and border security;
-- in a balanced and fair manner.
The way in which the new Customs Act was introduced also met with general satisfaction.

The new legislation presented a major task for the Customs Service and involved the complete replacement of their previous legislation which was nearly as old as I am (30 years).

Im aware that some reservations remain about the flow of information out of Customs and in particular, the penalty regime contained in the Act. I hope that the Comptrollers comments in this area has addressed your concerns.

The new Act provides a good basis for operating in the modern commercial environment.

Part of the Customs Modernisation is the National Call Centre, based in Auckland, which now takes 1300 calls a week. Its hours of operation are now 7am to 6pm but also provide an out of hours service.

One offshoot of the national call centre is that when my office was first being set up I had to track down some of my staff after hours. With staff on secondment from Health, despite our best efforts, we had to wait till the next day, with Customs the national call centre got me the right number in a matter of minutes.

I now want to turn for a moment to one of the first modernisation projects to be completed late last year - Intelligence.

I know the view in some quarters of Military Intelligence is that it is a contradiction in terms, but Im assured thats not the case here.

At first glance Intelligence might appear to be something internal to Customs.

But having Customs working smarter has direct benefits for those in commerce: for you, your clients, and the public.

I understand that only five years ago that it could take several days from the time of lodging your import documents and gaining the release of goods from Customs control. Computer processing now means this processing time now averages around 40 minutes.

I understand this is largely thanks to CASPER.

I should say that although Ive been told what CASPER actually stands for, Ive forgotten, and I note the Customs staff member in my office had forgotten too. I know its something to do with smarter automated systems which has to be a good thing.

I note that Customs seems to favour acronyms. Weve got CASPER which conjures up images of friendly ghosts in the Customs machine. Then theres Cusmod, which isnt the name of a Russian space station, but the programme for bringing Customs up to date.

In health of course weve got RHAs, CHEs, CCMAU and more.

Actually there are other similarities between my two portfolios, I note that Customs brings in over $5 billion in revenue to Government each year, and Health spends roughly the same amount.

But back to the business at hand.

As part of its modernisation programme, Cusmod, the Customs Service made the strategic decision that intelligence would drive its business.

The intelligence capability that the Customs Service now has incorporates:

improved information capture
enhanced analysis
strategic analysis
production of high quality, targeted actions
This Intelligence capability will soon result in new systems for Customs management of goods and revenue, and provide Customs officers with different roles and responsibilities.

What does this mean for you?

The impact for Customs Brokers and Freight Forwarders will be that Customs intervention at the time goods cross the border will generally be for the purpose of community protection only. Most other interventions will be after the importation - and they will be because the Intelligence capture and analysis has indicated that Customs involvement is necessary.

I note the Customs Service introduced deferred duty payment ten years ago - and now theyre formalising a system of minimal intervention prior to the delivery of goods. These innovations are clearly indicative of Customs progress with a Client Service philosophy.

The new processes of goods and revenue, integrated with the Intelligence system will mean that the results of any earlier examination will be held in the computer system, matched against the latest importation, and as long as there are no community protection matters involved, intervention should not be necessary prior to the release of the goods.

Another aspect of the Customs Services client service which I think is worth mentioning is the Business Assistance programme. A major feature of this programme is the Key Client arrangement whereby major importers and exporters are able to have one to one contact with officers of the Service to facilitate their business with Customs.

Another facet of the Business Assistance programme is the temporary entry provisions which permit components which are to be used in the manufacture of goods for export to be imported without attracting GST or duty. This helps to reduce costs to industry as security can now be provided by way of letters of guarantee rather than, as in the past, by cash deposits or bank guarantees.

Major clients now using this system include yacht builders and refurbishers, the aircraft industry, and over recent times it has been extended to the bloodstock industry.

I fully support the client service initiatives that have been taken by the Service to date and I will be giving every encouragement for similar positive developments in the future.

There is one other matter which I understand is of concern to some New Zealand exporters - the import processing charges that are now being imposed by the Australian Customs service. I have been advised that these charges are compatible with the World Trade Organisation and the suggestion has been made that New Zealand should reciprocate.

This is not current Government policy. I will however be raising this matter when I meet with my Australian counterpart for the Trans-Tasman Customs Ministers talks later this year.

Thank you once again for the opportunity to be with you today and I wish you all an enjoyable and very successful conference.

ENDS