Review of cost of food safety and biosecurity services

The Ministry for Primary Industries is looking for feedback on proposed updates to fee rates needed to maintain the safety of New Zealand’s food and protect New Zealand from biosecurity risks.

The proposals update the amount the Ministry for Primary Industries (MPI) charges industry to provide food safety and biosecurity services.

“Biosecurity and food safety are critical to the operation and viability of New Zealand’s primary industries. Without these systems, New Zealand’s $38.3 billion primary sector exports would never get past importing countries’ borders and New Zealand’s primary industries would be exposed to a much greater risk of potentially devastating pests and diseases,” says Dan Bolger, MPI’s Deputy Director-General, Office of the Director-General.

“Over and above that benefit to industry, the systems ensure the safety for consumers of New Zealand products, at home and abroad.”

The consultation marks the first review of fees to support the biosecurity system since the Ministry for Primary Industries was formed in 2011. It is the first review of food safety fees since 2008.

“Since that time demand for MPI’s services has increased, driven by increasing imports and exports as well as a greater number of food businesses. In addition to a rising volume of services required, inflation pressure has meant that the real cost of delivering services is also increasing.

“The different systems for recovering costs from industry were not developed at the same time. Over time this has led to potential inequities in current charges. The proposals are designed to address these inequities and ensure all industry – large and small – is treated fairly.

“MPI has managed to keep costs down by improving efficiency while still maintaining its high quality of service. However change is needed to continue to ensure the quality of our systems is maintained.”

“We need to strike the right balance between making sure that costs are fair, and making sure the Ministry is getting the right amount of money to continue doing the job for industry and New Zealand.

“The proposals amount to a total increase of $12.8 million across the food and biosecurity systems. To put this in context, the total amount being proposed to support both systems is a small fraction of one percent of New Zealand’s $38.3 billion primary industries.”

The proposals at a glance:
• Update to over 250 biosecurity and food safety fees, charges and levies
• Changes to regulations which ensure fairness, clarify intent and reduce red tape
• Increase the amount recovered from industry for biosecurity by $6.0 million to $36.4 million
• Increase the amount recovered from industry for food safety by $6.8 million to $62.1 million

“Feedback from industry and the public is an important part of getting these updates to fee rates right. I encourage you to take part in this consultation.”

You can read the proposals in detail and find out how to make a submission on MPI’s website, here:https://mpi.govt.nz/news-and-resources/consultations/

The deadline for submissions is 20 February 2015.

Questions and Answers

What do you mean by biosecurity and food safety systems?
The biosecurity system prevents or manages risks from harmful organisms, like pests and diseases. It helps protect New Zealand's economy, environment, human health, and a range of social and cultural values. It does this by stopping pests and diseases before they arrive or dealing with them if they do enter the country.

The food safety system ensures the safety of consumers in New Zealand and abroad from New Zealand produced food. All food produced for sale in New Zealand must be produced to meet the requirements in legislation and regulation, whether the food is sold in New Zealand or overseas, or imported. This system is essential to maintain market access for NZ food into overseas markets.

Both systems allow industry to provide assurances to its customers in New Zealand and abroad that their products are safe.

Who pays for these systems?
Like other major Government systems, the food safety and biosecurity systems are partially funded by tax payers out of recognition of the benefit they bring the wider economy.

However, a key principle in the law which governs food safety and biosecurity is that those who most directly benefit must shoulder some of the cost. This consultation presents options for how much industry should be charged.

Is cost recovery a new initiative?
No. It is a longstanding and important part of the way New Zealand government funds its services to industry.

What are the proposals?
This consultation document sets out a series of proposals for changing the way that MPI recovers costs from individuals and industries. Most of these changes are simple fee rate updates to reflect changes to costs, new services or expanded services since the last review. In all, MPI is proposing to change over 250 fees, charges and levies.

Other proposals are for improvements to how we recover costs to improve the efficiency, equity, effectiveness, or transparency of charging regimes.
The proposals amount to a total increase of $12.8 million across the food and biosecurity systems. To put this in context, the total amount being proposed to support both systems is a small fraction of one percent of New Zealand’s $38.3 billion primary industries.

Does everyone pay the same?
No. Different businesses will pay different amounts depending on the services they receive.

The major cost recovery systems have different approaches because they were not developed at the same time. Over time this has led to inequities in current charges.

The mergers which formed MPI out of the Ministry of Fisheries, the Ministry of Agriculture and Forestry and the New Zealand Food Safety Authority have provided an opportunity to reset charges to support the key principles of: efficiency, effectiveness, equity, justifiability and transparency.

Why have costs for MPI’s services gone up?
There has been significant change in our operating environment since the last review of fee rates. Central to this has been a transformation of New Zealand’s trading patterns in recent years. This has meant that MPI has had to provide new services as well as improvements to existing services.

In addition, there has been an increase in demand, which has been driven by increasing imports and exports and a greater number of food businesses. In addition to a rising volume of services required, inflation pressure has meant that the cost of delivering services is also increasing.

What will this mean to my business?
The costs that businesses will need to meet will vary according to the nature of the particular business. The extent to which these apply to different activities is set out in the consultation document.

Will I get a chance to talk through these proposals with someone?
Yes. MPI is running a series of presentations around the country which will provide industry a chance to better understand how the proposals will affect them and provide feedback to MPI staff directly. More details about the presentations are on MPI’s website, here: https://mpi.govt.nz/news-and-resources/consultations/

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