Travellers win with plans to cut New Zealand Border Clearance Levy

The Silver Whisper off the New Zealand coast. Cruise ship passengers will pay less in fees. Photo / Paul Taylor

Travellers are in for a break with the planned reduction in the border travel tax, which has raised more money than expected.

The amount of the Border Clearance Levy paid by air travellers will drop by nearly $3 to $18.73 and cruise passengers will get a reduction of more than $3 to $22.82 from July 1.

The charges were imposed in 2016 to help pay for Customs and Ministry for Primary Industries inspections at the border and in the past year resulted in a $16.29 million surplus. This is projected to grow to more than $21m in the current year.

Tourism Industry Aotearoa chief executive Chris Roberts said he was pleased that Customs and MPI are now proposing to slightly reduce the levy.

"The boom in inward and outbound travel means the levy has raised far more than was anticipated. We raised the issue of the large over-accumulation in our brief to the Minister of Tourism and called for the levy to be decreased," Roberts said.

"We're pleased this is to happen."

The levy was a surprise announcement in the May 2015 Budget and he said it was imposed after very limited analysis and no consultation.

His organisation was disappointed there had been a lack of consultation before setting the new rate.

TIA acknowledged there had been improvements to the border experience, with the continued rollout by Customs of SmartGate, and MPI accrediting a number of cruise lines, allowing more efficient processing of passengers on-wharf.

"Customs and MPI have also met most of their non-financial performance measures covering risk management, traveller experience and efficiency," he said.

An MPI and Customs performance report shows the average processing time at Auckland Airport for compliant passengers was just over seven minutes.

Roberts said, however, he regretted there had been no opportunity provided to make suggestions for improving border services or to be able to review the planned spending of the two agencies.

Interested groups were seeking a meeting with Customs and MPI.

New Zealand Cruise Association chief executive Kevin O'Sullivan said he welcomed MPI for improvements in handling cruise ship passengers, allowing them to reduce their share of the cruise passenger levy.

"The report on the proposed levy changes says Customs will continue to 'make efficiencies in the cruise traveller clearance process…' which is good to hear, but the use of technology like SmartGate should be introduced more quickly for cruise passengers," he said.

Flight Centre NZ managing director David Coombes also welcomed the move.

"It's good to see that the levy is being reduced slightly due to surplus, although minimal and unlikely to be something customers will markedly notice, these cost savings will be passed on to travellers which is a positive."

The reduction in fees also meant New Zealand will continue to have relatively cheap levies compared with other countries such as Australia which was "great news" for inbound tourism.

"It has been good to see in recent years the levies contribute to an improved experience through our airports and ports and we hope to see this continue," said Coombes.