Consultation Paper on 
Proposed Revisions to the Cost 
Recovery Regime s 
Biosecurity , Animal Product s, Agricultural Compounds 
and Veterinary Medicines, Wine and Animal Welfare  
 
 
MPI Discussion Paper No: 2015/02  
 
Prepared for Public Consultation  
 
ISBN No: 978-0-477-10530 -9 (online)  
ISSN No: 2253 -3907  (online ) 
 
 
 
 
 
January  2015  
  
 
 
Disclaimer  
 
While every effort has been made to ensure the information in this publication is accurate, the 
Ministry for Primary Industries does not accept any responsibility or liability for error of fact, 
omission, interpretation or opinion that may be present, nor for the consequences of any decisions 
based on this information.  
 
Requests for further copies should be directed to:  
 
Publications Logistics Officer  
Ministry for Primary Industries  
PO Box 2526  
WELLINGTON 6140  
 
Email: co strecovery @mpi.govt.nz  
Telephone: 0800 00 83 33  
 
This publication is also available on the Ministry for Primary Industries website at  
http://www.mpi.govt.nz/news -resources/publications.aspx  
 
 
© Cr own Copyright - Ministry for Primary Industries  
 
Colour Key for Navigation  
Sector  Relevant 
sections  Colour  
Meat, Game, Bee Products, Seafood, Poultry and Eggs, Stores and 
Secondary Processors  6B, 6C, 
6D, 9   
Dairy  6E, 6D, 9   
Seafood  6B, 6C, 
6D, 9   
Wine  8, 9  
Importers and biosecurity facility operators  4, 9  
Agricultural compound and veterinary medicine registrants and importers  4, 5, 9   
Live animal exports  6A, 7, 9    
 
i Contents  Page 
1 Introduction  1 
1.1 Overview  1 
1.2 Ministry for Primary Industries  2 
1.3 Purpose and structure of this document  2 
1.4 Background  2 
1.5 Statutory framework for cost recovery  3 
1.5.1  MPI’s role as a regulator  3 
1.5.2  Cost recovery principles  3 
1.5.3  Periodic cost recovery review s 4 
1.5.4  Memorandum accounts  4 
1.6 Current status of cost recovery  5 
1.6.1  Market developments since the last review  5 
1.6.2  The need for change  6 
1.6.3  Options for change  6 
1.6.4  A first principles review of MPI cost recovery  7 
1.6.5  Cost recovery regimes excluded from the current review  7 
1.6.6  Cost recovery under the Food Act 2014  7 
1.7 Fee chang es not subject to detailed policy proposals  7 
1.8 Use of formulae to calculate fees, charges and levies  8 
1.8.1  Questions for consideration  8 
1.9 Use of hourly rate charges  8 
1.10  Goods and Services Tax (GST)  9 
1.11  Appendix 1 - Guidelines for setting charges and fees  10 
1.11.1  The Treasury guidelines for charging fees  10 
1.11.2  Auditor -General guide for charging fees  10 
1.11.3  Economic description of services  11 
1.11.4  Cost basis for fees and charges  11 
2 Making submissions on the proposals  12 
2.1 Consultation  12 
2.2 Deadline for submissions  12 
2.3 How submissions will be used  12 
2.3.1  Analysis of submissions  12 
2.3.2  Official Information Act 1982  12 
2.4 How to comment on proposals or answer questions  12 
2.4.1  Preparation of submissions  12  
 
ii 2.4.2  What to include in your submission  13 
2.4.3  Format for submissions  13 
2.5 Address for submissions  13 
3 Overview of cost recovery proposals  14 
3.1 Why the cost recovery regime is being reviewed  14 
3.2 A summary of proposed changes to cost recovery  14 
3.2.1  Proposed changes to biosecurity fees  16 
3.2.2  Proposed changes to food safety fees  16 
3.2.3  Questions for consideration  17 
4 Cost recovery under the Biosecurity Act 1993  18 
4.1 Overview  18 
4.2 Activities under the Biosecurity Act 1993  18 
4.3 Levies, fees, and charges  19 
4.3.1  The Biosecurity (System Entry Levy) Order 2010  19 
4.3.2  The Biosecurity (Costs)  Regulations 2010  19 
4.4 Cost recovery for the Joint Border Management System  19 
4.5 Related Biosecurity cost recovery  work  20 
4.5.1  Cost recovery under the GIA on biosecurity readiness and response  20 
4.5.2  Cost recovery regulations under the Airports (Processing of International 
Travellers) Act 2014  20 
4.6 Policy proposals  21 
4.7 Biosecurity#1 – Recover for activity outside standard working hours  21 
4.7.1  Background  21 
4.7.2  Problem definition  21 
4.7.3  Proposed charges  21 
4.7.4  Questions for consideration  22 
4.8 Biosecuri ty#2 – Update charges for import permit applications  22 
4.8.1  Background  22 
4.8.2  Problem definition  22 
4.8.3  Proposed charges  23 
4.8.4  Questions for consideration  23 
4.9 Biosecurity#3 – Recover for biosecurity advisor time  23 
4.9.1  Background  23 
4.9.2  Problem definition  23 
4.9.3  Proposed charges  24 
4.9.4  Questions for consideration  24  
 
iii 4.10  Biosecurity#4 – Amend charges for additional travel zone and travel costs for 
veterinary professionals  24 
4.10.1  Background  24 
4.10.2  Problem definition  24 
4.10.3  Proposed charges  25 
4.10.4  Questions for consideration  26 
4.11  Biosecurity#5 – Align veterinary professional rates for goods imported from the 
European Union  26 
4.11.1  Background  26 
4.11.2  Problem definition  26 
4.11.3  Proposed charges  26 
4.12  Biosecurity#6 – Update cost recovery for transitional and containment facilities  26 
4.12.1  Background  26 
4.12.2  Problem definition  27 
4.12.3  Proposed charges  27 
4.12.4  Questions for consideration  28 
4.13  Biosecurity#7 – Increase maximum rate of system entry levy  28 
4.13.1  Background  28 
4.13.2  Problem definition  28 
4.13.3  Proposed charges  28 
4.13.4  Questions for consideration  28 
4.14  Cross -cutting proposals affecting the biosecurity area  28 
4.15  Appendix 1 - Biosecurity activities  30 
4.15.1  Policy advice, publicly funded research, and law enforcement programmes  30 
4.15.2  International standard setting and market access work  30 
4.15.3  Laboratory diagnostic work  30 
4.15.4  Import health standards  30 
4.15.5  Border inspection and transitional and containment facility standards  30 
4.15.6  Border inspection services  30 
4.15.7  Tran sitional and containment facility services  31 
4.15.8  Diagnostic testing for border interceptions on imports  31 
4.15.9  Surveillance programmes  31 
4.15.10  Incursion response programmes  31 
4.15.11  Pest management programmes  31 
4.16  Appendix 2 - Biosecurity fees and charges schedule  32 
5 Cost recovery under Agricultural Compounds and Veterinary Medicines Act 1997 42 
5.1 Overview  42  
 
iv 5.2 Activities under the Agricultural Compounds and Veterinary Medicines (ACVM) Act 
1997  42 
5.2.1  ACVM Act functions  42 
5.3 Policy proposals  43 
5.4 ACVM#1 – Recover costs for provisionally registering a trade name pro duct 43 
5.4.1  Problem definition  43 
5.4.2  Proposed fee for provisiona l registration of a trade name product  43 
5.4.3  Questions for consideration  43 
5.5 ACVM#2 – Clarify that MPI can recover costs for determini ng what class an imported 
product falls under when inspecting  43 
5.5.1  Background  43 
5.5.2  Problem definition  44 
5.5.3  Proposed fee for determining a class for imported products  44 
5.5.4  Questions for considera tion 44 
5.6 ACVM#3 – Recover costs for recognition functions under Part 3A of the Act  44 
5.6.1  Background  44 
5.6.2  Problem definition  44 
5.6.3  Proposed fee and hourly rate assessment charges for Part 3A rec ognition 
functions  44 
5.6.4  Questions for consideration  45 
5.7 ACVM#4 – Revise uses for which fees and charges payable for setting standards can be 
used 45 
5.7.1  Background  45 
5.7.2  Problem definition  45 
5.7.3  Proposal to make the reference to ‘standard setting’ more gener al 45 
5.7.4  Questions for consideration  46 
5.8 Appendix 1 – MPI Activities under the Agricultural Compounds and Veterinary 
Medicines Act  46 
5.8.1  Requirements and guidance function  46 
5.8.2  Appraisal services  47 
5.8.3  Compliance and monitoring  47 
5.8.4  Standard setting activities  48 
5.9 Appendix 2 – Existing and proposed fees under Agricultural Compounds and 
Veterinary Medicines Act 1997  50 
6 Animal Products Act 1999 cost recovery  55 
6.1 Overview  55 
6.2 Activities under the Animal Products Act 1999  55 
6.3 MPI Verification Services activities  55  
 
v 6.3.1  Overview  55 
6.3.2  Services provided by MPI Verification Services  56 
6.3.3  Cost recovery approach for Verification Services  57 
6.4 Live animal export services  57 
6.5 Dairy industry services  58 
6.6 Policy proposals  58 
Part 6A – Live animal and germplasm exports  59 
6.7 APA#1 – Change the method of charging for negotiating and maintaining market access 
for the live animal and germplasm sectors  59 
6.7.1  Background  59 
6.7.2  Problem definition  60 
6.7.3  Proposed fee for negotiating and maintaining market access for the live animal 
and germplasm sectors  60 
6.7.4  Questions for consideration  60 
6.8 APA#2 – Incorporate the current waivers into the regulations  60 
6.8.1  Background  60 
6.8.2  Problem definition  61 
6.8.3  Proposed maximum number of animals for which a fee is payable per live 
animal export consignment  61 
6.8.4  Questions for consideration  61 
6.9 APA#3 – Charge for support staff who assist with issuing export certificates  61 
6.9.1  Background  61 
6.9.2  Problem definition  61 
6.9.3  Proposal to charge for support staff that assist with issuing export certificates  62 
6.9.4  Questions for conside ration  62 
6.10  APA#4 – Align one -hour minimum charge  62 
6.10.1  Background  62 
6.10.2  Problem definition  62 
6.10.3  Proposed one -hour minimum charge, with additional time after one hour 
chargeable in 15 -minute blocks  62 
6.10.4  Questions for consideration  62 
6.11  APA#5 – Align hourly rates for the live animal and germplasm sectors  62 
6.11.1  Background  62 
6.11.2  Problem definition  63 
6.11.3  Proposed updated hourly rates  63 
6.11.4  Questions for consideration  63  
 
vi Part 6B – Approvals and Certification  64 
6.12  APA#6 – Charge for changing the recognised agency on a Risk Management 
Programme  64 
6.12.1  Background  64 
6.12.2  Problem definition  64 
6.12.3  Proposed fees for changing a recognised agency on a risk management 
programme  64 
6.12.4  Questions for consider ation  64 
6.13  APA#7 – Recover costs for halal -related services  64 
6.13.1  Background  64 
6.13.2  Problem definition  65 
6.13.3  Proposed fees for halal -related services  65 
6.13.4  Questions for consideration  65 
6.14  APA#8 – Recover costs for re -certification as a supplier for wild animals or game 
estates  66 
6.14.1  Background  66 
6.14.2  Problem definition  66 
6.14.3  Proposed fees for re -certification as a supplier for wild animals or game estates
 66 
6.14.4  Questions for consideration  66 
6.15  APA#9 – Recover costs for re -listing of further pet food processors  66 
6.15.1  Background  66 
6.15.2  Problem definition  66 
6.15.3  Proposed fees for re -listing pet food processors  66 
6.15.4  Questions for consideration  67 
6.16  APA#10 – Charge for additional time spent processing Official Assurances (Non -
Dairy)  67 
6.16.1  Background  67 
6.16.2  Problem definition  67 
6.16.3  Options considered  68 
6.16.4  Analysis of options  68 
6.16.5  Proposed fee for official assurances – Option 2  69 
6.16.6  Questions for consideration  69 
6.17  APA#11 – Charge for minor amendments to a Risk Management Programme (Non -
Dairy)  69 
6.17.1  Background  69 
6.17.2  Problem definition  70 
6.17.3  Proposed charge for minor amendments to a risk management programme  70 
6.17.4  Questions for consideration  70  
 
vii 6.18  APA#12 – Recover costs for inspection and audit under the Animal Products Act 1999 70 
6.18.1  Background  70 
6.18.2  Problem definition  70 
6.18.3  Proposed cost recovery for inspection and audit  70 
6.18.4  Questions for consideration  71 
6.19  APA#13 – Recover costs for the approval of a maintenance compound  71 
6.19.1  Background  71 
6.19.2  Problem definition  71 
6.19.3  Proposed charges for the approval of a maintenance compound  71 
6.19.4  Questions for consideration  71 
Part 6C – Levies, fees and charges on Animal Products  72 
6.20  APA#14 – Charge for homekill and recreational catch service providers  72 
6.20.1  Background  72 
6.20.2  Problem definition  72 
6.20.3  Proposed charge for homekill and recreational catch service provider 
compliance  72 
6.20.4  Questions for consideration  72 
6.21  APA#15 – Establish a minimum charge for levies  72 
6.21.1  Background  72 
6.21.2  Problem definition  73 
6.21.3  Proposed minimum charge for levies  73 
6.21.4  Questions for consideration  73 
6.22  APA#16 – Require information to inform levies  73 
6.22.1  Background  73 
6.22.2  Problem definition  74 
6.22.3  Proposed information requirements  74 
6.22.4  Questions for consideration  74 
6.23  APA#17 – Increase annual charge for the Meat Industry Initiative Fund  75 
6.23.1  Background  75 
6.23.2  Problem definition  75 
6.23.3  Proposed increase to research levy  75 
6.23.4  Questions for consideration  75 
Part 6D –Verification Services  76 
6.24  APA#18 – Change the way programme charges are calculated and applied  76 
6.24.1  Background  76 
6.24.2  Problem definition  76 
6.24.3  Proposed change to the way the programme charge is calculated  77  
 
viii 6.24.4  Questions for consideration  77 
6.25  APA#19 – Remove annual  charges for certain sectors  77 
6.25.1  Background  77 
6.25.2  Problem definition  78 
6.25.3  Proposed removal of the annual charge  78 
6.25.4  Questions for consideration  78 
6.26  APA#20 – Charge for establishing a full -time verification services presence  78 
6.26.1  Background  78 
6.26.2  Problem definition  78 
6.26.3  Proposed charges for establishing a full -time verification services presence  79 
6.26.4  Questions for consideration  79 
6.27  APA#21 – Charge for non -verification functions  79 
6.27.1  Background  79 
6.27.2  Problem definition  79 
6.27.3  Proposed charges for non -verification functions  80 
6.27.4  Questions for consideration  80 
6.28  APA#22 – Remove differentiation between veterinarian and non -veterinarian circuit 
verifiers  80 
6.28.1  Background  80 
6.28.2  Problem definition  80 
6.28.3  Proposed uniform charging basis for veterinarian and non -veterinarian circuit 
verifiers   80 
6.28.4  Questions for consideration  80 
6.29  APA#23 – Introduce new penal rates  81 
6.29.1  Background  81 
6.29.2  Problem definition  81 
6.29.3  Proposed penal rates  81 
6.29.4  Questions for consideration  81 
6.30  APA#24 – Revise definition of penal rates  81 
6.30.1  Background  81 
6.30.2  Problem definition  81 
6.30.3  Revise the definition of penal rate  81 
6.30.4  Questions for consideration  82 
Part 6E – Dairy industry fees and charges  83 
6.31  APA#25 – Enhance  charging approach for New Zealand standards, performance 
monitoring, export standards, market access and residue monitoring  83 
6.31.1  Background  83 
6.31.2  Problem definition  83  
 
ix 6.31.3  Proposed separation of levy fo r New Zealand standards development from levy 
for export standards  84 
6.31.4  Proposed levy on all processors for the National Chemical Contaminants 
Programme  84 
6.31.5  Proposed annual levy, on a time -benefit basis, for small processors that collect 
raw milk solids to recover the cost of New Zealand standards, performance mon itoring 
and dairy residue monitoring  85 
6.31.6  Proposed levies to large processors in the regulations for New Zealand 
standards, performance monitoring and residue  monitoring  87 
6.31.7  Proposed levy on small exporters, on a time -benefit basis, for market access and 
export standards development  90 
6.31.8  Proposed levy formula for large exporters in the regulations for market access 
and export standards development  92 
6.31.9  Impacts of the proposals  95 
6.31.10  Questions for consideration  96 
6.32  APA#26 – Introduce a new cost recovery method for infant formula exports  96 
6.32.1  Background  96 
6.32.2  Problem definition  97 
6.32.3  Proposed recovery of the costs of maintaining MPI’s electronic certification 
systems (E -cert) 98 
6.32.4  Proposed recovery of the costs of MPI staff time to process export declarations
 98 
6.32.5  Questions for consideration  100 
6.33  APA#27 – Establish an identical Verification Services charging regime for dairy 
verification inspection and audit  100 
6.33.1  Background  100 
6.33.2  Problem definition  100 
6.33.3  Proposed charges for dairy verification and audit  100 
6.33.4  Questions for consideration  101 
6.34  APA#28 – Charge for minor amendments to a Risk Managem ent Programme (Dairy) 101 
6.34.1  Background  101 
6.34.2  Problem definition  101 
6.34.3  Proposed charge for minor amendments to a risk management prog ramme  101 
6.34.4  Questions for consideration  101 
6.35  APA#29 – Charge for additional time spent processing Official Assurances (Dairy)  102 
6.35.1  Background  102 
6.35.2  Problem definition  102 
6.35.3  Options  102 
6.35.4 Analysis of options  102 
6.35.5  Proposed fee for official assurances – Option 2  102  
 
x 6.35.6  Questions for consideration  102 
6.36  APA#30 – Add waiver provisions to dairy industry fees and charges regulations  102 
6.36.1  Background  102 
6.36.2  Problem definition  103 
6.36.3  Proposed waiver provisions  103 
6.36.4  Questions fo r consideration  103 
6.37  Appendix 1 – MPI Activities under the Animal Products Act  104 
6.37.1  New Zealand standards, specifications and guidance  104 
6.37.2  Export standards and market ac cess 104 
6.37.3  Approvals and registrations  104 
6.37.4  Monitoring and a udit 104 
6.37.5  Operational response and investigations  105 
6.37.6  Enforcement  105 
6.37.7  Policy advice (including technical input)  105 
6.38 Appendix 2 – MPI Verification Services Structure  106 
6.39  Appendix 3 – Services to the dairy industry  106 
6.39.1  The development and maintenance of New Zealand standards  106 
6.39.2  Performance Monitoring  106 
6.39.3  The development and maintenance of market access and export standards  107 
6.39.4  The dairy residue monitoring programme (National Chemical Contaminants 
Programme)  107 
6.40  Appendix 4  – Existing and proposed dairy fees under Animal Products Act 1999  108 
6.41  Appendix 5 – APA Non -dairy – Existing and proposed fees (non -dairy) under Animal 
Products Act 1999  118 
7 Cost recovery proposals under the Animal Welfare Act 1999  146 
7.1 Overview  146 
7.2 Activities under the Animal Welfare Act 1999  146 
7.2.1  Introdu ction  146 
7.3 Policy proposals  146 
7.4 AWA#1 – Charge for animal welfare export functions performed by non -veterinarians 146 
7.4.1  Background  146 
7.4.2  Problem definition  146 
7.4.3  Proposed cost recovery for non -veterinarian work associated with live animal 
export   146 
7.4.4  Questions for consideration  147 
7.5 Appendix 1 – MPI Activities under the Animal Welfare Act 1999  148 
7.5.1  Standard setting  148 
7.5.2  Approvals  148  
 
xi 7.5.3  Animal Welfare Group  148 
7.6 Appendix 2 – Existing and propo sed fees under Animal Welfare Act 1999  149 
8 Cost recovery proposals under the Wine Act 2003  151 
8.1 Overview  151 
8.2 Activities under the Wine Act 2003  151 
8.3 Crown funding for the wine regulatory programme  152 
8.4 Cost recoverable MPI activities under the Wine Ac t 2003  152 
8.5 Cessation of rebates for wine sample testing  152 
8.6 Policy proposals  153 
8.7 Wine#1 – Charge for changes to the recognised agency (or person) on a Wine Standards 
Management Plan  153 
8.7.1  Background  153 
8.7.2  Problem definition  153 
8.7.3  Proposed cost recovery for processing changes to a recognised agency (or 
person)  on a wine standards management plan  153 
8.7.4  Questions for consideration  154 
8.8 Wine#2 – Charge for minor amendments to a Wine Standards Management Plan  154 
8.8.1  Background  154 
8.8.2  Problem definition  154 
8.8.3  Proposed charge for minor amendments to  a wine standards management plan
 154 
8.8.4  Questions for consideration  154 
8.9 Wine#3 – Recover costs for processing a small winemaker exemption notifications  154 
8.9.1  Background  154 
8.9.2  Problem definition  154 
8.9.3  Proposed cost recovery for processing a small winemaker exemption 
notification  155 
8.9.4  Questions for consideration  155 
8.10  Wine#4 – Recover costs for verification, inspection and audit  155 
8.10.1  Background  155 
8.10.2  Problem definition  155 
8.10.3  Proposed cost recovery for verification, inspection and audit under the Wine 
Act 2003  155 
8.10.4  Questions for consideration  156 
8.11  Wine#5 – Recover costs for New Zealand Standards and Compliance functions via a 
levy on New Zealand Winegrowers  156 
8.11.1  Background  156 
8.11.2  Problem definition  156  
 
xii 8.11.3  Proposed annual levy on New Zealand Winegrowers  158 
8.11.4  Calculating the New Zealand Wine growers levy  158 
8.11.5  Questions for consideration  159 
8.12  Wine#6 – Recover the cost of funding for Export Standards setting, Market Access and 
export certification costs  159 
8.12.1  Background  159 
8.12.2  Problem definition  160 
8.12.3  Proposed levy on each litre of wine exported  160 
8.12.4  Calculating the levy  161 
8.12.5  Questions for consideration  161 
8.13  Wine#7 – Recover costs for wine E -Cert 161 
8.13.1  Background  161 
8.13.2  Problem definition  162 
8.13.3  Proposed changes to recover costs for items for export assurance  163 
8.13.4  Questions for consideration  163 
8.14  Appendix 1 – MPI Activities under the Wine Act 2003  164 
8.14.1  New Zealand standards programme  164 
8.14.2  Export standards programme  164 
8.14.3  Market access programme  164 
8.14.4  Compliance and system audit  165 
8.15  Appendix 2 – Existing and proposed fees under the Wine Act 2003  166 
9 Proposals that impact across multiple cost recovery regimes  170 
9.1 Background  170 
9.2 Policy proposals  170 
9.3 Common#1 – Align hourly rate charges  170 
9.3.1  Background  170 
9.3.2  Regimes affected by this proposal  170 
9.3.3  Problem definition  171 
9.3.4  Proposed alignment of hourly rate charging approach in keeping with the 
animal products fees  171 
9.3.5  Questions for consideration  171 
9.4 Common#2 – Use Inland Revenue Department vehicle mileage rates  172 
9.4.1  Background  172 
9.4.2  Regimes affected by this proposal  172 
9.4.3  Problem definition  172 
9.4.4  Proposed change to a common approach for mileage rates and the recovery of 
any other travel costs  172 
9.4.5  Questions for consideration  173  
 
xiii 9.5 Common#3 – Recover costs for support staff involved in sp ecialist services  173 
9.5.1  Background  173 
9.5.2  Regimes affected by this proposal  173 
9.5.3  Problem definition  173 
9.5.4  Proposed charges for support staff involved in export certification  174 
9.5.5  Questions for consideration  174 
9.6 Common#4 – Recover other costs incurred by MPI  174 
9.6.1  Background  174 
9.6.2  Problem definition  174 
9.6.3  Proposed charges for support staff involved in export certification  174 
9.6.4  Questions for consideration  175 
9.7 Common#5 – Charge for performance of function, power or duty under the Act, 
Regulations and Notices not prescribed elsewhere  175 
9.7.1  Background  175 
9.7.2  Problem definition  175 
9.7.3  Proposed fees for performance of function, power or duty under the Act, 
Regulations and Notices not prescribed elsewhere  175 
9.7.4  Questions for consideration  176 
9.8 Common#6 – Correct use of the term ‘levy’  176 
9.8.1  Background  176 
9.8.2  Regimes affected by this proposal  176 
9.8.3  Problem definition  176 
9.8.4  Proposed re -categorisation of fixed fees as levies  177 
9.8.5  Questions for consideration  177 
9.9 Common#7 – Update references to recognised persons and agencies  177 
9.9.1  Background  177 
9.9.2  Regimes affected by this proposal  177 
9.9.3  Problem definition  177 
9.9.4  Proposed amendments  177 
9.9.5  Questions for consideration  178 
9.10  Common#8 – Align veterinary professional rates across biosecurity and food 
regulations  178 
9.10.1  Background  178 
9.10.2  Problem definition  178 
9.10.3  Proposed charges  178 
9.10.4  Questions for consideration  178 
   
 
xiv Glossary  
 
ACVM  – Agricultural Compounds and Veterinary Medicine Act 1997.  The purpose of this 
Act of Parliament is to reform and restate the law relating to agricultural compounds . 
APA  – Animal Products Act 1999. The purpose of this Act of Parliament is to reform and 
restate the law relating to the processing of animal material  into products for use, trade and 
export.  
APEC – Asia Pacific Economic Co -operation. This is a forum for 21 Pacific Rim  member 
economies that seeks to promote free trade  and economic cooperation throughout the Asia-
Pacific  region.  
AWA  – Animal Welfare Act 1999. The purpose of this Act of Parliam ent is to reform the law 
relating to the welfare of animals and the prevention of their ill -treatment . 
AWEC  – Animal Welfare Export Certificate. A certificate issued under the Animal Welfare 
Export Certificate Regulations 1999 to ensure that any animal welfare risks during travel are 
minimised . 
BSEL  – Biosecurity System Entry Levy. This levy paid by stakeholders funds a proportion of 
the fixed costs common to all activities associated with managing  biosecurity risks at the 
border . 
CODEX  – Codex Alimentar ius Commission. A collection of internationally recognized 
standards, codes of practice, guidelines and other recommendations relating to foods , food 
production and food safety . 
DIRA  – the Dairy Industry Restructuring Act 2001. The purpose of this Act of Parliament is 
to provide for the transition of the New Zealand Dairy Board to a wholly  owned subsidiary of 
new co -op and its co nversion into a company . 
EU – European Union . 
FTE  – Full-time equivalent . 
GIA  – Government and Industry Agreements  are a greements between government and 
industry sectors to share management of risk.  
GMP  – Good Manufacturing Practice  certificate.  
GST  – Goods and Services Tax. Most fees are shown  on a GST -exclusive basis . The current 
rate of GST is 15%.  
IRD – Inland Revenue Department . 
JBMS – Joint Border Management System  A set of integrated information technology 
products that New Zealand Customs  Service  and MPI use jointly to manage risk at the border  
MAF  – Ministry of Agriculture and Forestry , one of the agencies that were merged to form 
MPI.  
MPI  – the Ministry for Primary Industries , the government department undertaking th e 
present  consultatio n. 
MPI VS  – Ministry for Primary I ndustries Verification Services.  
NCCP  – National Chemical Contaminants Programme . 
NZFSA  – New Zealand Food Safety Authority , one of the agencies that were merged to form 
MPI.   
xv OECD  – Organisation for Economic Co -operation a nd Development  is an international 
economic organisation  of 34 countries founded in 1961 to stimulate economic progress and 
world trade.  
OIA  – Official In formation Act 1982. The purpose of this Act of Parliament is to make 
official information more freely available, to provide for proper access by each person to 
official information relating to that person, to protect official information to the extent 
consistent with the public interest and the preservation of personal privacy . 
OMARs  – Overseas market access requirements. Notices issued by MPI with standards for 
exporters.  
RMP – Risk management programme that is registered under the APA.  
RTT  – Researc h, teaching and testing sectors.  
T&CFs  – Transitional and Containment Facilities . Border and other facilities that accept 
imported goods and organisms.  
VICH  – Veterinary Co-operation on International Harmonisation . 
WECS  – Wine Export Certification Service.  MPI processes applications to determine 
whether wine is eligible for export  and issues Export Eligibility Statements for each 
consignment of wine to confirm that it is eligible for export.  
WPC  – Whey Protein Concentrate.   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   1 1 Introduction   
 
1.1 OVERVIEW  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 The primary industries earned New Zealand $38.3 billion in exp orts in the year to June 
2014. Our biosecurity and food safety systems are critical to the operation and viability 
of the primary industries. They provide the basis for New Zealand’s official assurances 
to its trading partners about the safety and provenance of exports, protect consumers in 
New Zealand and overseas, and help prevent biosecurity incursions which could 
damage people, p rimary production and the environment. The systems add significant 
value to the returns New Zealand producers receive for the ir exports.  
This is the first review of biosecurity and food safety fees since the creation of the 
Ministry for Primary Industries (MPI or “the Ministry”) on 1 July 2011. Biosecurity 
fees were last reviewed in 2010 and the food safety fees were reviewed in 2008.  
Since the last review, demand for services has increased, driven by increasing trade 
volumes  as well as a greater number of food businesses. A rising volume of services, 
improvements to services, and cost pressures (price inflation), have increased the cost 
of delivering services.  
The Government has responded to the increased demand for services by raising  
efficiency and by making significant improvements, these include:  
 savings of $23.6 million  from the merger of the Ministry’s predecessor agencies , of 
which $2.8 million is attributable to industry and has been used to offset additional 
cost increases for industry;  
 absorbing bi osecurity response costs;  
 introducing a Joint Border Management System;  
 increasing the roster of dogs for cargo inspections; and  
 increasing Ministry staff numbers in China.  
The Ministry has been under -recovering from about half of the sectors  in provides 
services to  for several years. The Government is required to ensure that it neither 
overcharges nor undercharges for its services, and therefore a review of fee rates is 
now overdue. This update is also an opportunity to look at current policy  settings for 
cost recovery and, where appropriate, to refresh these settings.  
This consultation document sets out 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, the Ministry is proposing to change 254 fees across five sectors.  
Other proposals propose improvements to how we recover costs, to improve the 
efficiency, equity, ef fectiveness, or transparency of charging regimes.  
We are seeking your views on any and all changes that interest you. Section 2.4 
explains how to provide feedback on the proposals.  
The document is divided up by sector (Biosecurity, Animal Products, Agricultural 
Compounds and Veterinary Medicines, Animal Welfare, and Wine). Issues that affect 
all five sectors are listed in a separate section.  
The deadline for feedbac k is 20 February 2015 . 
  
2  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  1.2 MINISTRY FOR PRIMARY  INDUSTRIES  
MPI is the Government agency  charged with administering Vote Primary Industries and Vote 
Food Safety. The Ministry  was formed on 1 July 2011  from the merger of:  
 Ministry of Agriculture and Forestry (including Biosecurity New Zealand);  
 Ministry of Fisheries;  
 New Zealand Food Safety Authority.  
1.3 PURPOSE AND STRUCTUR E OF THIS DOCUMENT  
This consultation document presents the findings of MPI’s recent review of cost recov ery for 
animal products , agricultural compounds and veterinary medicines, wine,  animal welfare and 
biosecurity service s. It seeks comments from interested parties  on a range of cost recovery 
proposals related to the delivery of those services.  
Although the  document describes the functions performed by MPI under the various Acts, we 
are not seeking submissions on the nature and level of those functions. Such consultation is 
carried out when establishing work programmes and setting standards and specification s that 
apply to a specific industry, through the relevant industry -MPI consultation forums.  
This document is presented in several  parts:  
 Part 1  contains important introductory information  about cost recovery for MPI services.  
 Part 2  gives  instructions and information for making submissions.  
 Part 3 gives a high -level of overview of the cost recovery proposals.  
 Part 4  describes  and seeks feedback on cost recovery propos als relating to the Biosecurity 
Act 1993 . 
 Part 5  describes and seeks feed back on cost recovery propos als relating to the 
Agricultural Compounds and Veterinary Medicines Act 1997.  
 Part 6 describes  and seeks feedback on cost recovery propos als relating to the Animal 
Products Act 1999.  It is subdivided  into live animal and germpla sm exports (Part 6A), 
approvals and certification services (Part 6B ), charges  on animal products  (Part 6C), 
verification services (Part 6D) and dairy industry  fees and charges  (Part 6E) . 
 Part 7 describes  and seeks feedback on  cost recovery propos als relating to the  Animal 
Welfare Act 1999 . 
 Part 8  describes  and seeks feedback on cost recovery propos als relating to the Wine Act 
2003 . 
 Part 9 describes  and seeks feedback on proposals  that affect multiple cost recovery 
regimes . 
1.4 BACKGROUND  
As MPI is a resu lt of a merger of different agencies, there is now a lack of consistency of 
approach to cost recovery across the various sectors.  
Because parts of s ome cost recovery arrangements are the same across different regimes , we 
propose amending multiple sets of regulation at the same time, to standardise some 
arrangements and language, and to ensure as much consistency and fairness as possible.  
Parts 4 to 9 of this consultation document include the following information for each 
legislative regime:  
 activities und ertaken by MPI;  
 policy issues identified and considered as part of the review;  
 proposed updates for current fees and charges (refer to schedules in appendices);   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   3  details of each cost recovery proposal, including:  
- background information  
- problem definition;  
- proposed fees and charges;  
- questions for consideration in submissions.  
1.5 STATUTORY FRAMEWORK FOR COST RECOVERY  
1.5.1 MPI’s role as a regulator  
MPI is a major central government regulator, with primary responsibility for food safety 
issues and biosecurity . The cost of delivering some of the functions  that MPI undertakes in 
carrying out its duties can  be recovered from users where service provision is not funded by 
way of Parliamentary appropriation.  
The authority for recovering costs from third  party users of servic es is established in a number 
of pieces of existing legislation:  
 Agricultural Compounds and Veterinary Medicines Act 1997 ; 
 Animal Products Act 1999 ; 
 Food Act 1981 ; 
 Wine Act 2003 ; 
 Biosecurity Act 1993 ; 
 Animal Welfare Act 1999 . 
High -level principles for dete rmining who should pay and the share they should pay are set 
out in each Act. The principles of equity, efficiency, transparency and justifiability  are 
common themes throughout the Agricultural Compounds and Veterinary Medicines Act 1997 , 
Animal Products A ct 1999 , Wine Act 2003 , and Animal Welfare Act 1999. The Biosecurity 
Act 1993  refers to the principles of equity and efficiency.  
In most cases, f ees for cost -recovered activities are set by Regulation s. The legislative 
frameworks for cost recovery are designed to ensure that the Ministry does not over -recover 
or under -recover the cost of service delivery.  
In addition to the existing legislation noted above, the Food Act 2014 , which allows for cost 
recov ery of services provided to third parties,  will fully come into force in March 2016. The  
first group  of fees  is due to take effect from 1 March 2016. Regulations to support the 
operation of the new Act, including those relating to  cost recovery, are being developed.  
In the years since current levies, fees and charges were set the demands for MPI’s services 
have increased significantly. These services have also changed  over the years  as a result of  
policy changes and to meet increasing domestic and internat ional expectations for New 
Zealand's biosecurity and food safety systems.  
1.5.2 Cost recovery principles  
The cost recovery principles that must be applied are specified and defined in  the individual  
Acts under which cost recovery is permitted. The principles are , however, consistent across 
the Animal Products Act, Agricultural Compounds & Veterinary Medicines Act and Wine 
Act, and are summarised as follows:  
 Equity  – Users or beneficiaries of a function, power or service will generally be required 
to fund the cost  of providing the function, power or service at a level that reflects their use 
or benefit.  
 Efficiency  – Costs should generally be allocated and recovered in a manner that ensures 
maximum benefits are delivered at minimum cost.   
4  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries   Justifiability  – The costs ( including indirect costs) associated with providing a function, 
power or service should be reasonable and justifiable.  
 Transparency  – The cost of providing a service, function or power should be identified 
and allocated as closely as is practicable to the period when the service is provided.  
The Animal Welfare Act also refers to the  principles  above  but does not have the same detail 
in explaining what they mean. The Biosecurity Act requires that the principles of equity and 
efficiency be applied in the cost  recovery area.  
MPI applies all four principles to all cost recovery, whether or not they are specified by the 
legislation for individual cost recovery regimes.  
MPI follows the guidelines set out in the Treasury’s Guidelines for Setting Charges in the 
Publ ic Sector  (‘Treasury guidelines’)1 and the Office of the Auditor -General Good Practice 
Guide Charging fees for public sector goods and services  (‘Auditor -General guide’)2. A more 
complete description of the guidelines for undertaking cost recovery is provi ded in section 
1.11, Appendix 1.  
1.5.3 Periodic cost recovery reviews  
The fees set in regulations must  be regularly reviewed and refreshed to ensure charges, fees 
and levies are accurate and they correctly reflect the cost of delivering services to third party 
users. Revenue generated under the current fee levels is  now insufficient to meet the costs 
incur red by the Ministry for delivery of services to third party users in these areas.  
In most instances the principal Acts also specify the minimum frequency with which  cost 
recovery reviews must be undertaken:  
 Agricultural Com pounds and Veterinary Medicines, Animal Products, and Wine  – three -
yearly;  
 Biosecurity – not specified;  
 Animal Welfare – not specified . 
Periodic review of cost recovery regulations is also consistent (and r ecommended) under the 
relevant guidelines publishe d by the Treasury and the Office of the Auditor -General. Review  
of all cost recovery for food safety, animal welfare and biosecurity is now overdue.  
Periodic cost recovery reviews for the food  safety  and biosecurity systems were due to be 
undertaken at the  time MPI was created from the merger of the three earlier  agencies. The 
reviews were deferred to allow for the bedding  down of the changes and for the financial 
implications of the merger to be properly sorted through and factored into cost recovery 
revie ws. The delay also allowed MPI to complete redevelopment of the overhead cost 
allocation model. At the time of the merger it was expected there would be impacts on cost 
recovery for the new Ministry, including beneficial impacts for third party service use rs. 
The current fee structures for food safety, biosecurity and animal welfare are therefore based 
on costs of the Ministry and other  agencies from  the 2009/10  financial year  or earlier , 
typically five to seven or more years ago.  
1.5.4 Memorandum accounts  
MPI uses memorandum accounts to monitor cost recovery revenue and expenses for food  
safety  and biosecurity. There are four memorandum accounts for this purpose:  
                                                
1 Guidelines for Setting Charges in the Public Sector , The Treasury, December 
2002. http://www.treasury.govt.nz/publications/guidance/finmgmt -reporting/charges  
2 Charging Fees for Public Sector Goods and Services . Good Practice Guide. Office of the Aud itor-General, June 2008. 
http://www.oag.govt.nz/2008/charging -fees/    
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   5  verification of the food regulatory programme;  
 approvals, ac creditations and registrations;  
 standard s setting for the food industry;  
 border biosecurity clearance fees.  
The verifications, approvals and standards setting memorandum accounts were all established 
prior to the 2006/07 financial year. The border biosecurity clearance fees memorandum 
account wa s created on 1 July 2010 from the consolidation of four previous memorandum 
accounts that were created on 1 July 2007.  
Memorandum accounts must be reported as part of MPI’s  annual report.  
1.6 CURRENT STATUS OF CO ST RECOVERY  
1.6.1 Market developments  since the last r eview  
Demand for MPI’s  services has increased substantially since the last cost recovery reviews 
were undertaken. Table 1 provides brief snapshot of increases in market activity since 2009.  
Table 1: Activity levels in key service areas 
Activity area 2009 2014 % increase  
Vehicle imports - excl. rolling stock (billion $)  3.72 6.36 +71 
Wine export volume (million L)  205 320 +56 
Export cargo volume – sea (million T)  25.3 38.3 +51 
Dairy exports milk solids (billion kg)  2.1 3.0 +43 
Harmonised trade imports – China (billion $)  6.3 8.1 +29 
Export cargo volume – air (thousand T)  92 104 +13 
Source: Statistics New Zealand, New Zealand Winegrowers, and New Zealand Customs Service . 
This increased demand has resulted in pressure on the quality and quantity of services 
provided, and the costs of delivering services.  
MPI has endeavoured to ensure that cost increases are reasonable, it is operating efficiently, 
and efficiency gains are factored into the budgeted costs for service delivery. It has 
benchmarked its operating efficiency as follows:  
 Of the proposed revenue increases since fee rates were last updated, the portion 
attributable to Ministry cost pressures is $3.5 million. This is less than half the $9 million 
increase that would have occurred if costs had risen at the rate of general inflati on. 
 The 2013/14 Benchmarking Administrative and Support Services (BASS) survey places 
the Ministry’s corporate services ’ costs at 12.3  percent  of total running costs.  This has 
improved from 13.7  percent  last year and is below the 13.6  percent  median (2012/13 
median of 14.4  percent ) of comparable public sector agencies3. 
 The Ministry’s procurement function received the highest rating of the 16 agencies (as at 
2012/13) that had participated in the ArcBlue Procurement Review.  
                                                
3Benchmarked against the Department of Conservation, Department of Internal Affairs, Land Information New Zealand, 
Ministry of For eign Affairs and Trade, Ministry of Health, New Zealand Customs Service, New Zealand Transport 
Authority, New Zealand Trade and Enterprise, and Statistics New Zealand.   
6  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries   The Ministry realise d savings from the mergers of predecessor agencies of approximately 
$23.6 million, including $2.8 million in savings to third parties.  These savings are 
reflected in the proposed charges.  
 The Ministry has absorbed a range of costs across its Crown -funded a nd cost -recovered 
activities. This includes absorbing the costs of three fruit fly responses in 2014/15; and in 
2015/16 absorbing $7.9 million in costs for additional observers on foreign charter vessels 
and increasing airport passenger numbers (especially  from countries with a low 
understanding of New Zealand’s biosecurity requirements).  
 Proposed professional services hourly rates (from $109 to $155) compare favourably  with 
rates for other New Zealand agencies  (for example,  they are up to $241 at the Civil  
Aviation Authority; and also compare favourably with border clearance services and 
agricultural verification rates in Australia (from AUD132 to AUD306).  
 Market feedback suggests the Ministry costs for verification services are the same or 
lower than those  of private sector competitor s. 
1.6.2 The need for change  
MPI is required by most of the  legislation it administers (the Biosecurity, Agricultural 
Compounds and Veterin ary Medicines, Animal Products and Wine Acts) to recover the costs 
of providing services that are not Crown -funded. These fees are set through cost recovery 
regulations  that have not been amended for a number of years . This has resulted in under -
recovery, as the costs of providing these services have risen owing to changes to improve 
service delive ry and general cost pressures.  
These increased costs are  financially unsustainable and will put pressure on the level of 
service MPI can offer.  
Furthermore, when the three agencies merged into  MPI, a number of inconsistencies in the 
fees charged  became evi dent. The result  is that  some users  pay more than others for similar 
services, while some  other s pay nothing at all . 
1.6.3 Options for change  
We are inviting  feedback on  the four main options for cost recovery (Table 2). They are to 
maintain  the status quo, increas e the fees for activities, increas e fees and enact smaller policy 
proposals, or undertak e a ‘first principles’ review of MPI’s cost recovery.  
Table 2: Options for cost recovery  
Proposal  Analysis  
Status quo  MPI continues to under -recover for the services it offers under regulation.  
Update existing fees for 
services provided under 
regulation  MPI recovers costs for the services it offers, in line with relevant legislation, by 1 
July 2015. Opportunities to improve services or flexibility through policy changes 
deferred.  
Update existing fees & 
enact policy proposals  MPI recovers costs for the services it offers, in line w ith relevant legislation, by 1 
July 2015. Proposed policy changes implemented within same timeframe.  
Completion of a first 
principles review of cost 
recovery, followed by an 
update to fees and policies  MPI defers fees updates until it completes a first pr inciples review of cost 
recovery across all it s services. Changes would not be in place for 1 July 2015. 
This would result in substantial, unrecoverable deficit, and the quantum of fee 
increase s would ultimately be larger.   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   7 1.6.4 A first principles review of MPI  cost recovery  
A first principles review of MPI cost recovery is scheduled  for completion  later in 2015. Th at 
review has a much broader scope that the current consultation, including a consideration of:  
 harmoni sing cost recovery regimes across the Ministry ; 
 the overall cost of Ministry fees to businesses and others;  
 further analysis of practical trade -offs between volumes, prices and standards (including 
risk);  
 appropriate funding source s for all Ministry services;  
 timeframes for fee updates;  
 optimal timefr ames  for recovering historic debts;  
 alignment with other cost recovery regimes.  
The first principles review will also consider any issues identified through the current 
consultation process that are outside the scope of th is consultation document , and  will ensure 
the Ministry’s cost recovery frameworks are operating in accordance with the underlying 
statutory frameworks and the high -level principles and guidance provided by the Treasury and 
Office of the Auditor -General.  
1.6.5 Cost recovery regimes excluded from the current review   
The current review does not include cost recovery under the following legislation:  
 Climate Change Response Act 2002;  
 Commodity Levies Act 1990;  
 Forests Act 1949;  
 National Animal Identification and Tracing Act 2012.  
Cost recovery under the Fisheries Act 1996 is also not covered by this review, as it is 
reviewed annually in accordance with the requirements of that Act.  
Cost recovery under the Food Act 1981 has not been included in the current review. Cost 
recovery und er this Act is relatively minor in terms of the amounts involved. Furthermore, the 
enactment of the Food Act 2014 requires cost recovery and other regulations to be developed 
and implemented as part of the gradual commencement of the provisions of this Act . Once 
implemented, the cost recovery provisions of the Food Act 2014 will supersede those of the 
Food Act 1981.  
Funding and cost recovery issues relating to the Government Industry Agreement (GIA) on 
Biosecurity Readiness and Response, and to pest managem ent, have not been included in the 
current review of biosecurity cost recovery. Work on GIA cost recovery arrangements is 
progressing separately. (See section  4.5.1 , for further details.)  
The development of cost recovery regulations under the Airports (Processing of International 
Travellers) Act 2014 is also not included in the scope of the current fee reviews.  
1.6.6 Cost recovery under the Food Act 2014  
MPI is developing cost recovery proposals for services that will be delivered under the Food 
Act 2014.  
The consultation process for Food Act 2014 cost recovery is being dealt with separately from 
the process for services covered by this document.  
1.7 FEE CHANGES NOT SUBJ ECT TO DETAILED POLICY PROP OSALS  
The proposals discussed in detail in this document do not cover updates to existing fees, 
charges and levies where no change to the basis of calculation or applicability of the fees,  
8  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  charges and levies is proposed. Rates for most  items have been updated to reflect current cost 
structures and anticipated demand for services. The updated rates are included in the 
Appendices at the end of each section.  
Your comment on these updates is invited as part of any feedback you provide.  
1.8 USE OF FORMULAE TO CALCU LATE FEES, CHARGES A ND LEVIES  
In some instances MPI has chosen to propose fees, charges and levy calculations based on 
formulae. The use of formulae will allow fees to rise (and potentially fall) in line with 
changes in the actual cost of providing the service. In some cases the formulae will rely on 
MPI internal cost assessments. We recognise that there may be some concern about the 
transparency of costs in these cases and propose to take the following steps to safeguard 
against cost ri ses that are not transparent or justifiable. These measures could include:  
 benchmarking internal cost rises against a published target linked to general inflation;  
 subjecting the service ar ea to periodic external audits;  
 allowing for a targeted, case -by-case, review of proposed fee levels by portfolio Ministers.  
1.8.1  Questions for consideration  
Question 1.8: 
1) In principle, do you support the use of formulae for setting charges for some activities, 
or would you prefer a ‘prescribed fee’ basis?  
2) Do you think the safeguards are sufficient in ensuring the fees, levies and charges  set 
by way of formulae  are fair and reasonable ? 
 
1.9 USE OF HOURLY RATE C HARGES  
Hourly rate charges are one of a number of available options for recovery of costs incurred in 
delivering services to users. When determining the most appropriate method for cost recovery 
(for example, fixed fee, hourly rate charges and levies) a number o f factors are taken into 
consideration. These include factors influencing the likely demand for the services and both 
the Ministry’s and users’ ability to manage the demand – such as volume, frequency and 
timing. The mandated principles (where applicable) of equity, efficiency, justifiability and 
transparency are also taken into consideration.  
Other factors taken into consideration include the method and location of service delivery – 
for example, whether site visits are required or whether the service is office -based – and the 
technical expertise required for service delivery.  
The Ministry is in agreement with recent comments from the Treasury and the Productivity 
Commission that hourly fees can be useful for recovering costs where the costs associated 
with individual cases are highly variable and the fee -payer can take action to reduce these 
costs.  
In some instances, the Ministry is proposing to use fixed fees that are based on hourly rate 
charges. Where this approach is being proposed, an explanation of the basis of calculation is 
included as part of each proposal. This approach is proposed where a service is typically 
provided on the basis of a number of process steps throughout the year. The total time 
assigned to each process step has then been aggrega ted to help determine the total costs being 
incurred by the Ministry. In these instances charging a single ‘unit’ fee is administratively 
more efficient for both the Ministry and the service user than charging for each process step 
individually as process steps are performed.   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   9 1.10 GOODS AND SERVICES T AX (GST)  
Fees, charges and levies in the current regulations were put into effect on both a GST -
inclusive and GST -exclusive basis. This document shows fees, charges and levies on a GST -
exclusive basis. This approach  has been taken:  
 to ensure consistency and comparability within and between cost recovery regimes;  
 to recognise that the majority of the Ministry’s fee -paying customers are businesses that 
are likely to be registered for GST, so they can offset any GST pa id in their GST returns.  
At the time current fees, charges and levies were put into effect, the rate of GST was 12.5%. 
The GST rate subsequently increased to 15%, and fees, charges and levies were restated to 
reflect the increased rate. This means that whe re fees published in regulations are ‘GST - 
inclusive’ they will not always correspond to the actual GST -inclusive fee being charged.  
The Ministry is seeking to promulgate revised and/or new fees, charges and levies on a GST -
exclusive basis. This will ensure consistency across all fee regimes, and will also help to 
ensure that the published rates for fees, charges and levies remains corr ect should there be 
future changes to GST rates. All figures in this consultation document are GST-exclusive  
unless otherwise stated.   
10  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  1.11 APPENDIX  1 - GUIDELINES FOR SETTI NG CHARGES AND FEES  
MPI follows the guidelines ( subject to relevant legislation)  set out in the Treasury’s 
Guidelines for Setting Charges in the Public Sector  (‘Treasury guidelines’)4 and the Office of 
the Auditor -General Good Practice Guide, Charging fees for public sector goods and services  
(‘Auditor -General guide’)5. 
1.11.1  The Treasury guidelines  for charging fees  
The Treasury guidelines outline policy considerations such as who should be charged a fee 
and whether a public entity should recover less than the full costs of providing a good or 
service. The guidelines state that:  
 Charges sho uld, in general, be set at the full cost of providing the service, where full cost 
includes all overheads and non -cash (such as capital charges), measured in accrual 
accounting terms.  
 Charges should not be excessive in relation to the costs incurred.  
 Charg es can be set to vary by the location where the service is provided or by the time at 
which the service is provided, but a balance needs to be struck between the gains from 
complex fee structures and the costs in terms of a loss of simplicity.  
 The process for setting charges should be clear and appropriate.  
 Transaction costs in setting and collecting the charges should be kept as low as 
practicable.  
 Appropriate consultation with those affected should be undertaken when setting and 
changing the charges.  
 Ther e should be a robust basis for any charges.  
 There should be fair treatment for taxpayers, beneficiaries of the service and ‘risk 
exacerbators’.  
1.11.2  Auditor -General guide  for charging fees  
The Auditor -General guide directs and government departments and other p ublic entities to 
apply three principles when setting fees for providing services to third parties:  
 Authority  – There must be  legal authority to charge a fee for the services that a public 
entity is legally obliged to provide to third parties. MPI’s  authority to charge for service 
provision is contained in the Acts listed in section 1.5.1  of this document.  
 Efficiency  – Services should be provided to the desir ed level of quality from a given 
quantity of resources, thereby achieving value for money. For service provision to be 
efficient, MPI needs to have an adequate understanding of the costs (both direct and 
indirect) of providing third party services, and hav e appropriate systems in place to 
monitor costs.  
 Accountability  – An entity must ensur e that its processes for identifying costs and setting 
fees are transparent. MPI achieves this through consulting affected parties on any 
proposed fee changes and by sepa rate disclosure of revenue and expenses for third party 
service provision through memorandum accounts.  
                                                
4 Guidelines for Setting Charges in the Public Sector , The Treasury, December 2002. 
http://www.treasury.govt.nz/publications/guidance/finmgmt -reporting/charges  
5 Charging Fees for Public Sector Goods and Services . Good Practice Guide. Office of the Audit or-General, June 2008. 
http://www.oag.govt.nz/2008/charging -fees/    
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   11 1.11.3  Economic description of services  
In economic terms, services can be characterised as public, ‘club’ or private goods.6 Club 
goods are also known as indus try goods. In practice, there is often no clear delineation of 
boundaries between them, and a product or service can have elements of all three. A key 
question then becomes the degree to which practical considerations of how costly it is to 
charge the user  of a service out weigh the benefits of charging.  
MPI has adopted the following definitions to help determine the most appropriate source of 
funding for services delivered to users:  
 Public good  – A good is considered public when excluding users from its ben efits is either 
difficult or costly  (meaning it is ‘non -excludable’, in economic terms)  and its use by one 
person does not detract from its use by another  (making it is ‘non -rivalrous’) . In practice, 
pure public goods are rare. Many government -provided ser vices share the characteristics 
of public goods to some extent. There is a good case for recovering the costs of a public 
good from the community as a whole by general taxation ( that is,  through government 
funding for delivery of these services to users).  
 Club good  – Inn the case of a club good,  in contrast, users can be excluded from the 
benefits of use at low cost), but its use by one person does not detract from its use by 
another ( making it non -rivalrous). The key difference is that the ability to exclu de users 
implies that it is feasible to charge for use. Charging club members can be an eff icient 
way of recovering costs. An example of a club good is activities undertaken by MPI to 
promote an industry , such as  dairy residue monitoring.  
 Private good  –Users can be excluded from benefits at low cost, and its use by one person 
conflicts with use by another ( meaning  it is both excludable and rivalrous). There is a 
strong case for recovering the costs of private goods from those who benefit directly from 
their provision.  An example of a private good is certification that a company’s goods 
comply with all relevant export requirements.  
1.11.4  Cost basis for fees and charges  
MPI uses full accrual accounting to determine the cost of providing  services , an approach that 
is consistent with general ly accepted accounting practice:  
 Direct costs  include personnel and operating costs (and can include fixed and variable 
costs) . 
 Indirect costs  include management and support services and corporate overhead costs , 
which include acc ommodation, equipment and communications. MPI’s  fixed costs form 
part of the cost of producing its outputs, and are apportioned across all out puts each year. 
The ‘drivers’ for allocating indirect costs across activities and functions for outputs are 
select ed to best represent a fair use of the particular function or service.  
This approach ensures that the full cost of providing services is considered when determining 
the level of cost recovery that will be required.  
                                                
6 A fourth category, “merit goods ”, are goods desired by the community as a whole at higher rates of consumption than if 
they were supplied at full cost. Merit goods may involve a mixture of Crown and third party funding, and the loss in public 
benefits from charging at full cost has to be  significant. No merit goods were identified and they have not therefore been 
included in the current review.   
12  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  2 Making submissions on t he proposals  
2.1 CONSULTATION  
Individual legislative frameworks and government guidelines require MPI to consult with 
affected parties on cost recovery mechanisms that best meet government guidelines while 
taking into account the p arties’ expectations and needs.  
We will meet with key industry representative groups to seek their views on the cost recovery 
proposals presented in this document.  
Feedback from individuals, businesses and other organisations is also invited.  
2.2 DEADLINE FOR SUBMISS IONS  
We must recei ve submissions on the cost recovery proposals contained in this document no 
later than 5 pm on 20 February 2015 . We may not be able to accept or consider submissions 
received after this time.  
2.3 HOW SUBMISSIONS WILL  BE USED  
2.3.1 Analysis of submissions  
We will ana lyse all feedback received from submissions. We will take that feedback into 
account when finalising proposals for the Government to consider.  
We may follow up with some of those who make submissions if further discuss ion or 
clarification is needed.  
We wil l produce a summary of all submissions and make it publicly available on our website.  
2.3.2 Official Information Act 1982  
The Official Information Act 1982 (the OIA) states that information should be made available 
unless there are grounds for withholding it. Th e grounds for withholding information are 
outlined in the OIA.  
Reasons for withholding information could include information that is commercially sensitive 
or personal information such as names or contact details. Those making submissions should 
indicate a ny grounds for withholding information included in their submissions.  
We will take any such indications into consideration when determining whether or not to 
release information or to include specific submission information in the published summary 
of sub missions. The final decision on what will be released will remain with MPI.  
Any decision by MPI to withhold information requested under the OIA may be reviewed by 
the Ombudsman.  
2.4 HOW TO C OMMENT ON PROPOSALS  OR ANSWER QUESTIONS  
We invite submissions from al l interested parties affected by the cost recovery proposals 
included in this document and on the questions that accompany each proposal.  
2.4.1 Preparation of submissions  
The following points may assist in preparing a submission:  
 When commenting on a specific it em or question, please include the reference 
information (for example, “Common#1”), section number, paragraph number or 
Table/Figure number that clearly identifies the item being discussed.   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   13  Be as specific as possible in your statements. For example, use ph rases such as ‘I support 
the fee increase in Wine#... for the following reasons…’ and ‘I disagree with the fee 
increase proposed in AP A#...for the following reasons. ..’. In that way, you will help us to 
report your views accurately and  enable us to  gauge  the level of support for individual 
proposals.  
 Please focus your submission on cost recovery for MPI services as discussed here.  This 
submission process is not the most effective channel to raise broader policy issues or 
challenges affecting your sector.  
 You may find it helpful to present your feedback in terms of the key cost recovery 
principles (section 1.5.2 ) and the potential  impact on your business or sector.  
 Where possible, please use examples, or data, to illustrate your point s. 
2.4.2 What to include in your submission  
Please include the following information in your submission:  
 the title of this document;  
 your name, and title;  
 your organisation’s name (if applicable);  
 your contact details – mailing and email addresses, and telephone numbers (cell phone 
and landline).  
2.4.3 Format for submissions  
Typed submissions are preferred, although submissions in clear handwriting will be accept ed. 
Typed submissions should be sent in Microsoft Word or email format. PDF documents are 
not compatible with our submission processing systems.  
2.5 ADDRESS FOR SUBMISSI ONS  
1) Submissions, queries and other feedback can be emailed to:  
costrecovery@mpi.govt.nz  
2) Paper documents should be posted to:  
Cost Recovery Review Consultation  
Policy & Trade Branch  
Ministry for Primary Industries  
PO Box 2526  
Wellington 6140  
All submissions must be emailed or sent in time to reach us by the deadline. We cannot accept 
responsibili ty for submissions that are not received by the required deadline or where 
transmission is delayed because of reasons beyond our control.   
14  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  3 Overview of cost recovery proposals  
3.1 WHY THE COST RECOVER Y REGIME IS BEING RE VIEWED  
This is the first review of Biosecurity  and Food Safety  fees since the creation of the Ministry 
on 1 July 2011. The current fee regime  is based on the cost structure s of the Ministry ’s 
predecessor agencies from 20 10, or earlier, and is consequently overdue for revision.  
The Government is legally required to ensure that it neither overcharges nor undercharges for 
its services. The Ministry is mindful that increasing charges can, in some instances, add a 
significant financial burden on smaller, more marginal businesses.  
In the  lead-up to this review the Ministry has redeveloped its overhead cost allocation model 
for fees, levies and charges, and subsequently received independent verification  of the 
model’s validity from Deloitte. The Ministry then undert ook an internal review a nd stock -take 
of the services it provides and the level of resources require d to meet the demand for those 
services.  It has been an opportunity for the Ministry to refresh policy settings, review existing 
fee structures, and check that the cost recovery regime  is fit for purpose, namely:  
 Fees do not under, or over, recover costs . 
 Fees are updated to reflect changes in activity, cost drivers  and industry structure . 
 The policy underlying fees remains appropriate.  
Implementation of t he proposals from the  cost recovery review will ensure that third -party 
users of the Crown’s Biosecurity and Food Safety services pay an equitable share of the cost 
of delivering the services they use . 
The operational environment has changed significantly since the fees were last set (five to 
seven years ago) . These changes include:  
 evolving  and emerging biosecurity risk  pathways ; 
 the increased sophistication and range of services  provided  (in response to increasingly 
exacting requirements of our international trading partners);  
 growth in industry sectors (such as the trebling of wine industry production since 2005);  
 the increasing cost of specialised technical services (such as  an estimated 10  percent  uplift 
in veterinarian salary costs since 20077; 
 expanded  and improved  services  (such as the use of dogs in cargo handling) , and 
increasing service expectations and standards.  
As a consequence of changes to the operational environment, fee levels are no longer meeting 
the cost of their delivery and MPI propose s to increase fees in mos t areas to reflect true costs. 
Some of the new fees are not directly comparable with the existing fees because the nature of 
the services and activities has changed significantly since the fee settings were last reviewed.  
3.2 A SUMMARY OF PROPOSE D CHANGES TO CO ST RECOVERY8 
Table 3 summarises the proposed overall changes in cost recovery acros s biosecurity and food 
safety. The revenue is currently collected under 2 54 different fees and charges. Of note is the 
change fro m a deficit of at least $5.0 million in 2014/15 to  a surplus of $ 3.9 million in 
2015/16 . This surplus is necessary to correct for deficits in the associated memorandum 
accounts owing  to the under -recovery of costs over the last three years. In future years  the 
                                                
7 MPI participates in the New Zealand Veterinary Association veterinary salary bench marking surveys, to ensure total MPI 
veterinary remuneration  remains comparable to the general market.  
8 All figures are exclusive of GST.   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   15 level of surplus or deficit will be carefully managed to ensure that, on average, the value of 
the memorandum accounts remains close to zero.  
Table 3: Impact of proposed new fees on cost -recovered revenue and expenditure  
Area Current 2014/15 ($million)  Proposed 2015/16 ($million)  
 Revenue  Expenditure  Surplus  
/(Deficit)  Revenue  Expenditure  Surplus  
/(Deficit)  
Food safety  55.3 57.7 (2.4) 62.1 60.8 1.3 
Biosecurity  30.4 33.0 (2.6) 36.4 33.8 2.6 
Total  85.7 90.7 (5.0) 98.5 94.6 3.9 
 
The key components of cost recovery revenue and expenditure are summarised in Figure 1. 
Figure 1: Breakdown of proposed  cost recovery revenue in 2015/16 , relative to when the fees were last 
updated.  
 
 
Costs have been allocated to activity areas on the basis of surveys of ‘assessed effort’ in 
undertaking particular tasks, assessed standard times for completing tasks, and billing 
information. Once the cost of improved services and volume growth  has been a ccounted for , 
cost growth has been less than  the rate of inflation since  the fees were last reviewed  (2010 for 
Biosecurity and 2007/08 for Food Safety).  2010 fee base, 
$29.0m, 80%  Deficit 
incoprorated in 
fees 2015/16, 
$2.6m, 7%  Cost pressures, 
$1.3m, 3%  Improvements, 
$1.3m, 4%  Volume growth, 
$2.2m, 6%  
Biosecurity  
Total proposed revenue   2015/16  
$36.4 million  
2008 fee base, 
$52.0m, 84%  Deficit 
incorporated in 
fees 2015/16, 
$1.3m, 2%  Cost pressures, 
$2.2m, 4%  Improvements, 
$1.1m, 2%  Volume growth, 
$3.3m, 5%  Wine industry, 
$2.2m, 3%  
Food Safety  
Total proposed revenue   2015/16  
$62.1 million   
16  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  3.2.1 Proposed changes to biosecurity fees  
The total forecast revenue  (based on proposed fees and charges)  in the 2015/16  financial year  
of $36.4  million comprises : 
 Biosecurity System Entry Levy  (BSEL)  at $19.2 million: rates will increase by 18  percent , 
from $11.11 to $13.159; 
 hourly rate charges at $5.7 million: the hourly rate for quarantine inspectors will increase 
by 15  percent , from $88.89 to $102.27;  
 zone charges: $2.1 million;  
 transitional facilities: $1.8 million;  
 animal import permits: $0.9 million;  
 personal effects: $0.5 million;  
 vehicle imports: $0.06 million.  
Improvements to the biosecurity system i nclude:  
 enhanced risk management of transitional and containment facilities ; 
 increasing use of detector dogs on the cargo pathway . 
3.2.2 Proposed changes to food safety fees  
The total expected revenue in the 2015/16  financial year  of $62.1 million consists of  fees 
derived from:  
 common programme charge across establishment and circuits  of $44.90 , compared with 
current charges of $41 .04 and $20.97 respectively;  
 increases in vet erinary inspection  rates of approx imately  3.5 percent  in establishment, 29  
percent  in cir cuit and 105  percent  in live animal  ─ official assurance c ertificate fee 
unchanged at $32;  
 main food safety hourly r ate increases from $122 to $155;  
 approx imately  $0.01 increa se in lamb equivalent meat levy;  
 approx imately  a 45 percent  decrease in seafood and shellfish levies owing  to 
mem orandum  accoun t surpluses, in years one and two only;  
 increases in levies for egg sector, bees and honey, animal feeds, hides and skins,  in years 
one and two only;  
 new activities and cost recovery for exportation and risk m anagement of infant formula 
manufacture;  
 introduction of new wine levies comprising a $330k  domestic levy on New Zealand 
Winegrowers, and an export levy of around $0.01 per litre of export wine, with annual 
exports < 10,000 litres per business exempt;  
 ceasing rebates for the cost of laboratory  fees wine export samples , which will increase 
wine industry costs by a further $0.8 million.  
Improvements and refinements to the Food Safety  system include:  
 food assurance systems to match the rapid growth of infant f ormula exports;  
 increased expenditure of $1.1  million  relating to dairy and animal products residue 
programmes ; 
 alignment with European Union/Swiss veterinary inspection rates;  
                                                
9 The BSEL payable in relation to import entries, that includes the fixed JBMS component of $4.22, will increase from 
$15.33 to $17.37 .  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   17  alignment of veterinary inspection rates across Biosecurity and Food regulation s; 
 introducing a one -hour minimum charge rather than invoicing in 15 -minute intervals;  
 alignment of hourly rate charges;  
 improved dairy residue monitoring;  
 more equitable treatment of small and large dairy exporters and processors.  
 
3.2.3 Questions for considera tion 
Question 3.2 
1) After reading the policy proposals and schedule of proposed fees, do you think  that the 
impacts on your business and sector are fair and reasonable?  
2) Are the proposed fees, charges and levies likely to adversely affect the viability of 
your business or sector? If you believe this to be the case, please give examples to 
support this.  
  
18  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  4 Cost recovery under the Biosecurity Act 1993  
4.1 OVERVIEW  
The New Zealand  biosecurity system pro vides the basis for New Zealand’s official assurances 
to its trading partners about the safety and provenance of exports, and help s protect against 
biosecurity incursions which could damage the environment and the primary industries.  The 
biosecurity system  adds significant value to the returns New Zealand producers receive for 
their exports.  
This is the first review of fees since 2010. The review covers 40 fees under the Biosecurity  
regulations , as well as seven policy proposals.  
MPI provides a range of ser vices under the Biosecurity Act  1993 , including screening 
incoming cargo for risk goods and surveillance activities.  Revenue for 2014/15 in the 
biosecurity sector is $30.4 million, and the total proposed increase is $6.0 million. This covers 
improvements s uch as the use of dogs in cargo pathways, and better controls around 
transitional and containment facilities.  
4.2 ACTIVITIES UNDER THE  BIOSECURITY ACT 1993  
Under the Biosecurity Act , MPI is the lead agency for the New Zealand biosecurity system. 
The biosecurity system consists of overlapping ‘layers’ of activities that manage risk at 
different points, includ ing offshore, en  route,  and at the border itself, and through biosecurity 
activities within New Zealand (including transitional  and containmen t facilities, readiness 
activities, incursion response, and pest management ). These layers are described in Table 4. 
Table 4: Layers of the biosecurity system  
International plant and animal 
health standards  Developing international standards and rules under the World Trade 
Organisa tion Sanitary and Phytosanitary Agreements  
Trade agreements and bilateral 
arrangements  Negotiation of agreements and processes for future biosecurity cooperation 
and trade  
Risk assessment and import 
health standards  Identification of risk, and specificat ion of requirements, for people and goods 
coming into New Zealand  
Border interventions  Educating and auditing to encourage compliance , inspecting to verify 
compliance and taking action to manage non -compliance  
Surveillance  General and targeted programmes  to detect harmful pests and diseases  
Readiness and response  Regular testing of the biosecurity system’s capability to respond , responding to 
detected harmful pests  and diseases  
Pest and disease management  National, regional & industry actions to manage established pests and 
diseases  
The biosecurity system is constantly evolving to protect New Zealand from changing and 
increasing risks.  
The Ministry’s biosecurity activities and service s are largely funded  by the Crown. In 
essence:  
 All policy work, public good research, enforcement , audit , most international work , and 
most import health standard development is Crown -funded . 
 Exporters pay for most  but not all export accreditation and assurance work .  
 Importers pay some of the costs of border services and other prevention work ( such as 
cargo clearances) .  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   19  The Crown currently pays for all readiness and response work10 and most surveillance  
work.  
MPI’s biosecurity services and activities are outlined in section 4.15, Appendix 1  
4.3 LEVIES , FEES, AND CHARGES  
Cost recovery for the third party -funded activities that are the subject of this review is given 
effect through the Biosecurity (System Entry Levy) Order 2010 and the Biosecurity (Costs) 
Regulations 2010 . 
4.3.1 The Biosecurity (System Entry Levy) Order 2010  
The Biosecurity System Entry Levy (BSEL) funds a proportion  of the fixed costs common to 
all activities associated with managing the biosecurity risks of imported goods at the border. 
This includes:  
 the costs of obtaining and analysing data to develop and monitor risk profiles and place 
alerts;  
 the costs of primary screening of sea and air cargo ma nifests for biosecurity risk goods;  
 the costs of intervention monitoring programmes, slippage surveys, and baseline auditing 
of the compliance of imported goods with import health standards;  
 the costs of certain surveillance activities around sea and air p orts and high -risk places 
(such as for the  Asian gypsy moth);  
 the costs of the 15 minutes of secondary risk assessment for consignments identified in 
primary screening, and issuing authorisation of movement and biosecurity clearance 
documentation.  
These ac tivities are considered to be ‘industry goods’.  
4.3.2 The Biosecurity (Costs) Regulations 2010  
The Biosecurity (Costs) Regulations 20 10 (the Regulations) set charges for a range of 
activities and services provided by the Ministry to third parties, including:  
 inspection of imported biosecurity risk goods , including unaccompanied personal baggage 
and effects, used vehicles and machinery;  
 inspection of offshore craft and shipping containers  that do not meet entry requirements;  
 testing, treatment, destruction  and disposal of risk goods;  
 call-outs and other work outside standard working hours, travel and waiting time for MPI 
inspectors to carry out biosecurity clearance activity;  
 monitoring controls on new organisms in containment facilities;  
 approval and audit of t ransitional and containment facilities and facility operators;  
 approval of permits issued  under Import Health Standards.  
The proposed biosecurity levy, fees and charges are stated in section 4.15, Appendix 2.  
4.4 COST RECOVERY FOR THE JOINT BORDER MANAGEME NT SYSTEM  
The Joint Border Management System (JBMS) is a set of integrated information technology 
products that New Zealand Customs Ser vice and MPI use jointly to manage risk at the border. 
It will provide greater consistency and certainty in the end -to-end border clearance process for 
all goods, and will allow border agencies to target risk more accurately.  
                                                
10 Though this will change under the Government Industry Agreement on Biosecurity Readiness and Response (GIA).   
20  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  The JBMS will also ultimately provide a single channel, the Trade Single Window, for local 
and international traders and carriers to comply with New Zealand’s border requirements.  
In 2012, following public consultation, the Government agreed to increase certain New 
Zealand Customs Ser vice transaction fees and the biosecurity levy to meet industry’s share of 
the operating costs of the first tranche of the JBMS through to 30 June 2016.  
The biosecurity levy is currently charged at the following rates:  
 $15.33 per importation for which an i mport entry transaction fee is payable , including  a 
JBMS component of $4.22 ; 
 $11.11 per importation for which an inward cargo transaction fee is payable in respect of 
cargo or go ods carried on a ship or boat;  
 $11.11 per importation for which an inward cargo transaction fee is payable in respect of 
goods or cargo carried on an airc raft. 
The lower levy rate of $11.11 is payable in relation to sea and air inward cargo transaction 
fees because the JBMS functionality asso ciated with the inward cargo report transaction type 
is not yet available. This rate, therefore, does not include the JBMS component of $4.22.  
The JBMS component of the biosecurity levy payable for import entr ies will remain 
unchanged until the end of the first cost recovery period on 30 June 2016. Further JBMS cost 
recovery arrangements will be considered in the next review of biosecurity cost recovery, 
which will take place over 2015/16 and result in new fe es from 1 July 2016.  
4.5 RELATED BIOSECURITY COST REC OVERY WORK  
4.5.1 Cost recovery under the GIA on biosecurity readiness and response  
The Biosecurity Act 1993 was amended in 2012 to provide a framework that enables 
government  and industry to work together in partnership through the GIA to achieve the best 
possi ble outcomes from readiness or response activities by:   
 making joint decisions on the activities;  
 jointly funding the costs of the activities in shares that take into account the public 
benefits and industry benefits that the activities deliver.  
This revie w of biosecurity cost recovery does not include funding and cost recovery issues 
relating to the GIA. Th at work is progressing separately and will cover:  
 Development of levy orders to fund particular industry organisations’ commitments to 
readiness and response activities under the GIA .  
 A proposal to recover, where equitable and efficient to do so, the costs of GIA readiness 
or response programmes from non -signatories. MPI anticipates that consultation on the 
proposal will to take place in the first half of 2015 . 
 A proposal to recover, where practicable and equitable to do so, the costs of GIA 
readiness or response programmes attributable to exacerbators of incursions of unwanted 
organisms. Consultation on this proposal may take place in the second half of 2015.  
4.5.2 Cost recovery regulations under the Airports (Processing of International Travellers) Act 
2014  
The Airports Act 2014 provides for the recovery, for an initial period, of the costs of border 
processing at new and re -starting international airports. The development of cost recovery 
regulations under the Airports Act 2014 is not included in the scope of the current fee review.   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   21 4.6 POLICY PROPOSALS  
Biosecurity #1 – Recover for a ctivit y outside  standard  working hours  
Biosecurity#2  – Update charges for i mport permit applications  
Biosecurity#3  – Recover for biosecurity  advisor time  
Biosecurity #4 – Amend charges for a dditional travel z one and travel costs for veterinary 
professionals  
Biosecurity#5  – Align  veterinary professional rates for goods imported from the European 
Union  
Biosecurity #6 – Update c ost recovery for transitional and c ontainment faciliti es 
Biosecurity#7 – Increase m aximum rate of system entry levy 
4.7 BIOSECURITY #1 – RECOVER FOR A CTIVIT Y OUTSIDE  STANDARD  WORKING 
HOURS  
4.7.1 Background  
Activities that take place outside standard working hours impose a higher cost on MPI as we 
must pay staff over -time and penal rates.  
While the Regulations allow for call -outs (when staff are called back to work) to be recovered 
for at higher hourly rates to reflect the additional costs, other activity outside standard 
working hours that does not constitute a call -out is currently recoverable only at the standard 
hourly rates.  
4.7.2 Problem definition  
Activities undertaken by staff outside of standard working hours (those that are not call -outs) 
impose a higher cost than MPI currently recovers because staff must be paid ov ertime and 
penal rates. O ut-of-standard -working -hours services for border clearance staff (quarantine 
inspectors) are infrequent . There is , however, substantial under -recovery ( about $0.3 million a 
year) currently occurring for veterinary professional services undertaken to clear live animals 
at the border and in transitional and containment facilities . 
The options considered to address this under -recovery were:  
 increasing the BSEL or ( standard ) hourly rates to recover the higher costs;  
 increasing quarantin e inspector and veterinary inspector rates;  
 increasing veterinary inspector rates only;  
 ceasing to provide rostered veterinary professional  services outside of standard working 
hours.  
Changes to the BSEL or hourly rates are not considered appropriate solutions since both 
would result in cross -subsidisation and would therefore be inequitable. Providing the 
veterinary professional services in question outside of standard working hours where required 
is also not considered to be discretionary.  
4.7.3 Proposed ch arges  
MPI propos es to amend the Regulations to allow recover y at the  higher  rates that MPI pays 
veterinary professional s for rostered work  outside of standard working  hours (being either 1.5  
times  or 2.0 times  normal rates) . These rates would equally apply to any periods of ‘waiting 
time’ experienced during a call -out. This would apply to both veterinary inspector  services 
provided, and to veterinary inspector  travel during this time  (see also Biosecur ity #4  ─  
22  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  Additional tra vel zone and travel costs for veterinary inspectors). The proposed  veterinary 
inspector hourly rates are:  
 standard T1.0 hourly rate ─ $186.30;  
 hourly rate  incorporating T1.5 staff costs ─ $252.17 ; 
 hourly rate  incorporating T2.0 staff cost s ─ $318.04 . 
Given  the administrative complexity associated with differential charging and the relatively 
low volume of work that is done outside standard working hours by  (non-veterinarian)  border 
clearance staff, we propose that the hourly  rate for quarantine inspectors u ndertaking rostered 
work outside standard working hours remain s the same as now (that is, at the regular hourly 
rate). 
The proposal to recover costs at higher rates for veterinary inspectors would support 
efficiency, as it would mean the users of these ser vices would be paying their actual costs, and 
would be equitable, as it would not involve cross -subsidisation by BSEL payers and/or those 
requiring services during standard working hours.  
4.7.4 Questions for consideration  
Question 4.7: 
1) Should these out -of-hours services be offered as standard and instead recovered 
through the BSEL  or standard hourly rates ? 
2) What is your preferre d option for cost recovery of outside of standard working 
hours for veterinary services?  
 
4.8 BIOSECURITY#2  – UPDATE CHARGES FOR I MPORT PERMIT APPLICA TIONS  
4.8.1 Background  
Importers of certain goods require an ‘import permit’ under the relevant import health 
standard. Applications for import permits are submitted to and processed by MPI.  
The Regulations currently provide for a unit charge that incorporates a standard amount  of 
time allotted to the processing of applications.  
4.8.2 Problem  definition  
Some applications  for import permits require  MPI staff time beyond that anticipated by the  
current unit charge  of $144.89, either because of problems with the standard of the applicati on 
(requiring additional time to resolve) or complexity.  
While most permits take around the standard time , a significant minority exceed this, with 
approximately five percent taking around eight hours.  
Options considered were:  
 introducing an hourly charge for those permits that exceed the standard time;  
 setting a maximum charge of eight hours staff time above the unit charge;  
 introducing a higher unit charge or a second unit charge for other more complex ‘classes’ 
of application.  
Introducing an hourly char ge would mean those cases where applications take much longer 
than the standard time could be cost recovered  on the basis of the actual time taken. That 
would provid e an incentive for applicants to ensure their applications are in order when they 
are submi tted.  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   23 Setting a maximum charge of eight hours additional above the unit charge time would provide 
some of  the assurance associated with a fixed unit charge. However, it would still mean that 
some permit application processing costs could be under -recovered . 
A higher unit charge would over -recover from most applicants and not provide an incentive to 
ensure applications were completed correctly. There was also no consistently identifiable 
‘class’ of permit that would suit a second tier of unit charge.  
4.8.3 Proposed charges  
The Ministry proposes to retain the single unit charge, at the proposed new rate (reflecting 
increased costs) of $191.95, and introduce charg ing at the proposed new inspector/advisor 
hourly rate of $102.27 after th e standard allotted time  is exceeded . 
4.8.4 Questions for consideration  
Question 4.8: 
1) Would you prefer the certainty of a second unit charge instead of an hourly rate, 
even if it would over -recover costs on many applications?  
2) Would you prefer all applications to be charged on an hourly rate basis (that is, no 
unit charge)?  
 
4.9 BIOSECURITY#3  – RECOVER FOR BIOSECURITY  ADVISOR TIME  
4.9.1 Background  
MPI biosecurity advisors undertake a range of activities, including risk analysis, import health 
standard development, processing of import permit applications, approving and providing 
advice on transitional and containment facilities and their operators, and providing advice on 
Chief Technical Officer Directions  under section 27 of the Biosecurity Act.11  
4.9.2 Problem  definition  
At present, MPI has no clear mechanism in the Regulations to recover the costs of certain 
activities undertaken by biosecurity advisors that constitute ‘private goods’. This includes 
time spent working on Chief Technical Officer Directions and other cases of non -compliance, 
and on answering queries and providing advice to importers. This is time that biosecurity 
advisors cannot spend on ‘public goods’ such as biosecurity risk analysis and import health  
standard development.  
Importers often seek advice from biosecurity advisors directly, instead of liaising with front -
line border clearance staff because quarantine inspector time is cost -recovered, while 
biosecurity advisor time is not.  
Not charging for biosecurity advisor time in relation to cases of non -compliance also means 
importers may n ot carry out required measures (including obtaining all the requisite 
documentation) prior to import, as they may feel any non -complianc e can be resolved at the 
border. This takes up biosecurity advisor time, and does not deal with risk offshore.  
The options considered were charging for:  
 certain types of biosecurity advisor time;  
 ‘abuse’ of biosecurity advisor time;  
                                                
11 These “directions” refer to directions or guidelines issued by a Chief Technical Officer on measures that may be applied to 
effectively manage the biosecurity risks arising from a n importation of goods that is non -compliant with the requirements of 
the relevant import health standard.   
24  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries   biosecurity advisor tim e taken beyond the first 15 minutes.  
It has not been possible to formulate a satisfactory definition of ‘abuse’ of advisor time that 
did not either over -capture or under -capture costs. A similar problem exists for attempting to 
specify only certain types o f advisor activities.  
4.9.3 Proposed charges  
We propos e amending the Regulations to allow cost recovery for biosecurity a dvisor time  at 
the proposed new rate of $102.27 where time is spent:  
a) working on equivalences or  Chief Technical Officer  Directions  owing  to an 
individual ’s or company’s non -compliance with import health standards  or other 
import requirements ; 
b) providing advice in relation to the importation of goods in excess of 15 minutes.  
Where possible, those involved would be alerted before incurring a charge. Judgement would 
be required , and there will always be cases where charges may be waived.  
4.9.4 Questions for consideration  
Question 4.9 
1) Should all time spent pro viding advice on importations be recovered for instead of 
providing the first 15 minutes free?  
2) When should the 15 -minute period ‘reset’ on a particular issue or query about 
which advice is being sought – daily, weekly, or monthly?  
 
4.10 BIOSECURITY #4 – AMEND CHARGES FOR A DDITIONAL TRAVEL Z ONE  AND 
TRAVEL COSTS FOR VET ERINARY PROFESSIONAL S 
4.10.1  Background  
The Regulations currently provide for fixed charges (zone charges) to recover the travel costs 
of quarantine inspectors, biosecurity advisors, and veterinary inspec tors travelling to 
undertake activities at site s away from base. The current zone charges are:  
 0 to 10 kilometres from base  ─ $64.00 (Zone 1);  
 10 to 25 kilometres from base  ─ $88.89 (Zone 2);  
 25 to 50 kilometres from base  ─ $144.89  (Zone 3).  
The travel cos ts of trips 50 kilometres or more from base are recovered via a ch arge per hour  
for time away from base, plus a per kilometre charge, plus the actual and reasonable costs 
associated with the activity  being undertaken (such as accommodation costs).  
The zone  charges include a staff time component and a vehicle mileage component.  
4.10.2  Problem  definition  
MPI consider s the Zone 1 charge applying to trips of 0 to 10 kilometres ($64.00) to be too 
high in many cases  where trips are of a shorter duration (for example, on ly one or two 
kilometres).  As a consequence, the charge is often waived (with the result that MPI is under -
recovering some of its travel costs).  
MPI also considers a zone charging approach for the biosecurity -related verification functions 
of veterinary professionals is not appropriate. Veterinary professionals undertaking 
biosecurity inspections of live animal imports often undertake food safety -related activities on 
the same trips. Travel costs for veterinary professionals under the food safety legislation are 
calculated on a ‘time plus mileage’ basis. A travel zone approach for biosecurity (import)  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   25 activities is therefore not consistent with the approach for exports, and often involves 
calculating travel costs for, and invoicing, the same customer in two different ways for the 
same travel undertaken.  
Also, a lot of biosecurity -related veterinary inspection is done outside of standard working 
hours (on a call -out or other basis). The current zone charges do not incorporate, and cannot 
readily incorporate, the higher rates paid to veterinary professionals during this time (1.5 and 
2.0 times hourly rate).  
Options considered:  
 maintaining the status qu o. 
 introducing  a 0 to 2 kilometre  zone charge  and maintaining a zone charge approach for 
quarantine inspectors, biosecurity advisors, and veterinary professionals.  
 maintaining the current zone charge approach (including a new 0 to2 kilometre zone 
charge) f or quarantine inspectors and biosecurity advisors, but moving to a ‘time plus 
mileage’ approach for veterinary professionals.  
4.10.3  Proposed charges  
For quarantine inspectors and biosecurity  advisors  
MPI proposes to a mend the R egulations to provide for a n addit ional travel zone charge for 
activity at a site 2  kilometres radius or less from base , and amend the current 0 to10 kilometre 
to a 2 to10 kilometre charge.  
The other existing zone charge categories will remain (10  to 25 kilometres, 25  to 50 
kilometres) , as well as t he ‘time plus mileage’ charging approach for trips of over 50 
kilometres.  
The proposed revised zone charges are:  
 Zone 1: 0  to2 kilometres from base  ─ $34.86 ; 
 Zone 2: 2  to10 kilometres from base ─ $70.75 ; 
 Zone 3: 10  to25 kilometres from base ─ $109.24; 
 Zone 4: 25 to50 kilometres from base  ─ $149.19.  
A zone charge approach for quarantine inspectors and biosecurity  advisors  is simpler 
administratively, both for importers and MPI, and better suits the nature and frequency of the 
trips they undertake  
For veterinary professional s 
MPI proposes to amend the Regulations to provide for a ‘time plus mileage’ approach to 
recovering all travel costs of veterinary professionals. This would better suit the nature of 
veterinary professional activities, align wit h the charging approach for exports under food 
safety legislation, and allow MPI to fully recover travel costs. The basis for calculating 
charges would be:  
 a charge per hour for time spent away from base (at the normal, time and a half, or double 
time rate , as appropriate), plus  
 a per kilometre charge  for distance travelled ─ being the per kilometre rate published by 
the Commissioner of Inland Revenue in accordance with section DE 12 (3) of the Income 
Tax Act 2007 , currently $0.77 . See section 9.4for further information  on a proposal to link 
all vehicle mileage rates to the rate calculated by the Inland Revenue Department (IRD), 
plus 
 the actual and reasonable costs associated with the activity being  undertaken .  
26  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  4.10.4  Questions for consideration  
Question 4.10: 
Should the fixed zone charge for quarantine inspectors and biosecurity advisors be 
replaced by ‘time plus mileage’ approach for travel costs?  
 
4.11 BIOSECURITY#5  – ALIGN  VETERINARY PROFESSION AL RATES FOR GOODS 
IMPORTED FROM THE EU ROPEAN UNION  
4.11.1  Background  
The Agreement between the European Community  (EU)  and New Zealand on sanitary 
measures applicable to trade in live animals and animal products  (the EU -NZ Sanitary 
Agreement) provides for agreed ra tes for veterinary inspection and other charges for activities 
in relation to animal and animal products imported into New Zealand  from the European 
Union.  
These provisions, and the associated proposals below, also apply to Switzerland. For brevity, 
refere nces to the EU -NZ Sanitary Agreement should be taken to include Switzerland.  
4.11.2  Problem  definition  
The EU-NZ Sanitary Agreement  is due to be updated, and revised rates will be in place by 1 
July 2015. MPI’s fees for veterinary inspection and other activities involved in clearing 
animal and animal products imported from the EU need to be increased in line with 
accumulated inflation since they were last set in 2010.  
4.11.3  Proposed charges  
We propose u pdating the fee s in the Regulations to align with the re -negotiated rates  in the 
EU-NZ Sanitary Agreement . These proposed rates are:  
 $94.38 per hour for inspecting an animal/animal material imported directly from an EU 
country;  
 $28.19 unit charge for an animal imported from an EU country;  
 $28.19 unit  charge for inspection of documents for a consignment imported from an EU 
country;  
 $56.37 unit charge for other types of inspection for consignments imported from an EU 
country.  
4.12 BIOSECURITY #6 – UPDATE C OST RECOVERY FOR TRANSITIONAL AND 
CONTAINMENT FACILITI ES 
4.12.1  Background  
Transitional facilities and c ontainment facilities are areas that are approved to hold and 
manage imported risk goods that are brought into New Zealand. Transitional facilities are 
generally for imported goods such as food products, things ma de from wood or plant material, 
sea containers, used machinery or vehicles, and other products that might have some 
associated biosecurity risk. These goods may undergo an inspection or treatment of some kind 
at the transitional facility before they can be  ‘cleared ’ by MPI.  
Containment facilities are places approved for holding organisms (plants or animals) that 
should not, whether for the time being or ever, become established in New Zealand. For 
example, zoos are containment facilities for animals. Some l aboratories are also containment  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   27 facilities that import micro organisms and biological products for testing which are later 
destroyed.  
MPI approves applications for approval as a t ransitional or containment facilit y, and 
undertakes ongoing verification, in spection and auditing of facilities.  Facilities are a key 
component of the biosecurity system and help MPI manage the biosecurity risk associated 
with cargo.  As risk profiles become more dynamic, MPI requires all facilities to be working 
to an appropriate level of protection.  
Cost recovery for t ransitional and c ontainment facilities  covers:  
 processing of applications ─ charge per hour;  
 verification, inspection, and auditing ─ charge per hour;  
 overall assessment of the results of inspection and compliance au dits and issuing 
confirmation documentation ─ an annual fee.  
4.12.2  Problem  definition  
MPI needs to ensure that the processing of applications for new facilities and new operators is 
thorough and comprehensive. We are taking a more robust approach to the assessm ent of such 
applications to provide national consistency, ensure biosecurity risks will be effectively 
managed, and facilitate ongoing supervision and inspection by MPI staff.  
To ensure biosecurity risks are effectively managed, MPI needs to ensure that th e processing 
of applications for new transitional and containment facilities, and their ongoing verification, 
inspection, and auditing, is thorough and comprehensive.  
MPI has reviewed its approach to transitional facilities and containment facilities. This  review 
has recommended an increased level of MPI activity in relation to these facilities, to ensure 
that facilities and the potential biosecurity risk associated with them are appropriately 
managed. A key deliverable of the review was also to ensure that  costs are fully recovered for 
the time and other resources associated with application processing, auditing, inspection, and 
approval.  
The current regime involves activities which the current Regulations did not anticipate and 
which are therefore not bein g cost recovered. Costs have also risen since fees were last set , in 
2010.  
This means current arrangements do not enable full cost recovery of services being delivered, 
either for current activities or the proposed new activities. This does not support eff iciency 
and is inequitable.  
4.12.3  Proposed charges  
MPI proposes to:  
 Introduce an application fee of $887.70 (replacing the current approach of charging at an 
hourly rate for the time taken to process applications),  with provision for further charging 
at the hourly rate for more complex applications.  
 Increase the annual fee to $298.05 to provide for increased costs and expanded/enhanced 
activities. These activities include follow up on corrective actions from audits , facility and 
operator administrative systems and processes, and training and provision of advice to 
facility staff and operators.  
This proposal supports efficiency, in that facility operators will pay the full cost of the 
services provided by MPI, and eq uity, in that cross -subsidisation (by taxpayers) of the 
currently under -recovered costs is eliminated.   
28  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  MPI is also proposing that the Regulations be amended to clarify that the costs of support 
staff supporting transitional and containment facilities can a lso be recovered.  
4.12.4  Questions for consideration  
Question 4.12: 
Would you prefer all fees for transitional and containment facilities to be charged as 
hourly rates instead of set fees?  
 
4.13 BIOSECURITY#7 – INCREASE M AXIMUM RATE OF SYSTEM ENTRY LEVY  
4.13.1  Background  
The Biosecurity (System Entry Levy) Order 2010 (the Levy Order) provides for a maximum 
biosecurity levy rate of $16.  This is the maximum rate up to which the Direc tor-General can 
fix the levy rate or rates prior to the start of each levy year.  
The proposed new  levy rates from 1 July 2015  are: 
 $13.15 per importation for which an Inward Cargo Transaction Fee (ICTF), sea or air , is 
payable ; 
 $17.37  per importation for which an Import Entry Transaction F ee (IETF) is payable.  
As noted above, at some point during the 2015/16 levy year, the $13.15 levy rate will increase 
to $17.37 when the JBMS functionality relating to inward cargo reports becomes avai lable.  
4.13.2  Problem  definition  
The maximum rate ($17.37) provided for in the Levy Order needs to be amended to provide 
for the increased levy rate applying to importations for which an IETF  (and in due course, an 
ICTF) is payable . 
4.13.3  Proposed charges  
MPI proposes  to increase the maximum levy rate prescribed in the Regulations to $ 18.00 .  
The Levy Order provides that any proposed increase to the levy, or change to the things on 
which the levy is spent, by the Director -General requires consultation, and must be in 
accordance (as per statutory requirements) with the principles of equity and efficiency. 
Increasing the maximum levy rate in the Levy Order  to $18.00  does not mean  the levy will 
increase to that amount , but only that it can ─ after consultation  ─ in accordance with 
statutory obligations, with industry and other affected parties.  
4.13.4  Questions for consideration  
Question 4.13: 
Do you agree that the maximum  rate f or the Biosecurity Entry Levy should be set at $18.00?  
 
4.14 CROSS -CUTTING PROPOSALS AF FECTING THE BIOSECURITY AREA  
There are also a number of ‘cross -cutting’ proposals impacting across multiple cost regimes 
that are relevant to biosecurity. These are:  
 use of Inland Revenue Department vehicle mileage rates  (Common#2);  
 cost recovery for support staff involved in specialist services (Common#3);  
 other costs  (Common#4);   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   29  alignment of veterinary professional  rates across biosecurity and food regulations  
(Common#8).  
Further information on these proposals is contained in Part 9 of this document .  
30  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  4.15 APPENDIX  1- BIOSECURITY ACTIVITI ES 
4.15.1  Policy advice, publicly funded research, and law enforcement programmes  
Policy advice includes advice on legislation and decision -making frameworks, interventions, 
and how services should be delivered operationally. It also includes ministerial services and 
various other  administrative functions. Law enforcement refers to the investigation and 
prosecution of those in breach of biosecurity laws and regulations.  
4.15.2  International standard setting and market access work  
International standard setting relates to work undertaken by MPI staff in multi -lateral  or 
international for ums to influence or determine international sanitary and phytosanitary 
standards affecting the trade of goods and services. Market access work refers to bilateral 
work with specific foreign governments rela ting to trade access .  
4.15.3  Laboratory diagnostic work  
This work includes testing of export animals to assure their freedom from particular pests or 
diseases that are unwanted in the importing country, as well as virology testing for veterinary 
practitioners, a nd testing of some export animal products.  
4.15.4  Import health standards  
Under the Biosecurity Act, M PI regulates, through import health standards,  what may be 
imported into the country and how. International sanitary an d phytosanitary and trade laws 
require any prohibitions or import health standards to be supported by scientific or technical 
evidence of a perceived biosecurity risk.  
Every year M PI prepares new risk analyses and import health standards at the request of 
importers seeking the importat ion of new products . We also  review existing import health 
standards as a result of requests from importers and foreign governments or changes in 
international or domestic circumstances.  
4.15.5  Border inspection and transitional  and containment facility standards  
MPI develops and maintains standards for the delivery of border inspection services, for  
transitional and containment facilities and for facility operators.  
4.15.6  Border inspection services  
MPI risk screens all cargo entering New Zealand and ensures that any b iosecurity risk goods 
are treated in accordance with the relevant standards. Inspection and clearance activity 
includes:  
 Cargo and container clearances  – This work includes inspection and clearances of 
containers, personal effects, and used vehicles and machinery, and offshore inspections 
(primarily of used vehicles and machinery) before they are shipped to New Zealand.  
 Vessel clearances  – MPI inspects vess els on arrival at, or on their way to, a New Zealand 
port, to ensure any biosecurity risk goods on board (including those carried by passengers 
and crew) are treated in accordance with the relevant standards, and that ballast water is 
exchanged in accordan ce with relevant standards.  
 Mail clearances  — MPI screens all letter post and international mail parcels entering 
New Zealand and intercepts and treats restricted or prohibited goods. Mail clearance 
includes detector dog and X -ray screening of mail, physic al inspection of mail containing 
suspected risk goods, treatment of risk goods, and management of treated mail.   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   31 4.15.7  Transitional and containment facility services  
These services  include approval and inspection of transitional and containment facilities and 
their operators against the relevant standards, regular audits of facilities and operators to 
ensure continued compliance with standards, and clearance s of plants and plant material.  
4.15.8  Diagnostic testing for border interceptions on imports  
This work involves t esting to identify a suspected unwanted organism or disease found on 
goods being imported, on packaging or on a container.  It primarily involves identifying 
insects detected on commercial consignments of fresh produce and timber and, occasionally,  
air pass enger baggage.  
4.15.9  Surveillance programmes  
Biosecurity surveillance is the process of systematically collecting, analysing and interpreting 
information about the presence or absence of pests, diseases and unwanted organisms.  That 
means find ing out whether they  are already present — and if they are, where exactly they  are 
— and if they  are not, being able to detect them early if they arrive.  The Ministry’s 
surveillance programmes include:  
 targeted surveillance programmes designed to look for a specific organism (or sometimes 
a group of related organisms) in specified hosts or regions;  
 pathway surveillance programmes that target high -risk sites;  
 passive surveillance, or keeping watch for unwanted pests and diseases, which involves 
investigating notifications of su spected unwanted pests and diseases, and monitoring and 
analysing trends in information relating to pests and diseases.  
4.15.10  Incursion response programmes  
These programmes  involve the investigation and control of specific pests or diseases that have 
been discov ered in New Zealand.  They include:  
 the development of standards related to pest and disease responses;  
 initial incursion investigation and response to suspected unwanted pests and diseases 
newly detected in New Zealand;  
 preparedness capability, or maintain ing and continually improving our ability to diagnose 
and respond to unwanted organisms — includes both generic capability that can be used 
to respond to any pest or disease, and capability specific to particular high -risk pests and 
diseases (such as foot and mouth disease);  
 specific incursion response — includes all specific programmes that are individually 
funded to eradicate particular organisms, plus the associated support  programmes.  
4.15.11  Pest management programmes  
Pest management includes the eradication, containment or management of pests that are 
established in New Zealand. There are a number of programmes in operation in New Zealand, 
the most significant of which have conservation purposes (pest and weed management) or 
agriculture purposes (bovine Tb  and Psa -v).  
32  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  4.16 APPENDIX 2 - BIOSECURITY FEES AND  CHARGES SCHEDULE  
 
Fees are shown as GST exclusive.  
Shaded columns and headers are  for referencing and commentary purposes . Light grey shaded content is for new proposals . Additional line spacing and column/row lines have been 
added for readability.  
 
Biosecurity (Costs) Regulations 2010  
Schedule – Fees and charges  
 Function, power, or duty for which fee or charge 
payable  Current f ee or charge  Fee or charge payable 
by Proposed fee  Comment  
 Travel costs for activity at a site  
Travel costs are payable for an activity that requires an inspector or a biosecurity adviser  to leave his or her base or, in the case of a call -out, any other place.  
 Quarantine inspectors and biosecurity advisors  
1  For an activity at a site that is 2 km radius or less 
from base   Importer  $34.86  New fee – refer to Bio#4  
2  For an activity at a site that is  more than 2 km , but 
not more than 10 km, from base  $64.00   Importer  $70.75  Amended zone – previously 
0-10 km from base  
3  For an activity at a site that is more than 10 km  
radius, but not more than 25 km radius, from base  $88.89  Importer  $109.24  Updated rate  
4  For an activity at a site that is more than 25 km 
radius, but not more than 50 km radius, from base  $144.89  Importer  $149.19  Updated rate  
 
5 
6 
 
 
 
 
7 
  For an activity at a site that is more than 50 km 
radius from base  The sum of:  
- charge per hour for time away 
from base ($ 88.89), plus  
- per km charge ($0.6133 ), plus  
 
 
 
- actual and reasonable costs 
associated with the activity  Importer  The sum of:  
- hourly rate $ 102.27 , plus  
- per km charge  as promulgated from 
time to time by the Commissioner of 
Inland Revenue under section 
DE12(3) of the Income Tax Act 
2007, plus  
- actual and reasonable costs 
associated with the activity being 
undertaken   
Updated rate  
Refer to Common#2  
 
 
 
 
Refer to  Common#4  
 
 
   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   33  Function, power, or duty for which fee or charge 
payable  Current f ee or charge  Fee or charge payable 
by Proposed fee  Comment  
 Veterinary inspectors  
 
8 
 
 
 
 
9 
 
 
 
 
10  For activity at a site   Importer  The sum of:  
- charge per hour for time spent away 
from base (at relevant 
EU/Switzerland  or non -EU rate, and 
at normal time, time and a half, or 
double time rate, as appropriate), plus  
- per km charge  as promulgated from 
time to ti me by the Commissioner of 
Inland Revenue under section 
DE12(3) of the Income Tax Act 
2007, plus  
- actual and reasonable costs 
associated with the activity being  
undertaken.  Updated rates for 
veterinarians.  
 Waiting -time costs  for inspectors and biosecurity advisors  
Waiting -time costs are payable for an inspector or a biosecurity adviser who arrives at a site, at a designated time, to undertake an  activity; and discovers that the goods that are to be the subject of the 
activity  are not available.  Waiting -time costs are payable, at the applicable hourly rate, for each inspector or biosecurity adviser involved in the  activity, and for the time each inspector or biosecurity 
adviser spends in waiting for the goods to become available.  
11 
 
 
 
12  Time waiting for goods to become available  $88.89 per hour for each 
inspector or biosecurity advisor 
involved  Person responsible for 
paying for the costs of 
the activity.  - General inspectors  and biosecurity 
advisors – hourly rate $102.27  for 
each inspector or biosecurity advisor 
involved  
- Veterinary inspectors – hourly rate 
$186.30  for each inspector involved  Updated rate  
 Call-out costs for inspectors and biosecurity advisors  
Call-out costs are payable for an inspector or a biosecurity adviser who, having left his or her place of work, has been recalled to duty fo r the purpose of carrying out an activity.  
13 
 
 
14  Left place of work and recalled to duty for the 
purpose of carrying out an act ivity – inspector or 
biosecurity advisor working at 1.5 times his or her 
hourly rate  $101.33 per hour for each 
inspector or biosecurity advisor 
involved  Person responsible for 
paying for the costs of 
the activity.  - General inspectors and biosecurity 
advisors – 1.5 hourly rate $116.16  for 
each inspector or biosecurity advisor 
involved  
- Veterinary inspectors – 1.5 hourly 
rate $252.17  for each inspector 
involved  Updated rate   
34  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries   Function, power, or duty for which fee or charge 
payable  Current f ee or charge  Fee or charge payable 
by Proposed fee  Comment  
15 
 
 
 
16  Left place of work and recalled to duty for the 
purpose of carrying out an activity – inspector or 
biosecurity advisor working at 2 times his or her 
hourly rate  $113.78 per hour for each 
inspector or biosecurity advisor 
involved  Person responsible for 
paying for the costs of 
the activity.  - General inspectors and biosecurity  
advisors – 2.0 hourly rate $130.05  for 
each inspector or biosecurity advisor 
involved  
- Veterinary inspectors – 2.0 hourly 
rate $318.04 for each inspector 
involved  Updated rate  
17 
 
 
 
18  Additional charge when recalled to duty for the 
purpose of carrying out an activity on a public 
holiday  $199.11 per day  Person responsible for 
paying for the costs of 
the activity.  - General inspectors and biosecurity 
advisors - $222.28 per day for each 
inspector or biosecurity advisor 
involved  
- Veterinary inspectors - $845.13 for 
each inspector involved  Updated rate  
 Other activity outside standard working hours  
19  Carrying out an activity outside standard working 
hours - veterinary inspector working at 1.5 times his 
or her hourly rate   Person responsible for 
paying for the costs of 
the activity.  Veterinary inspectors – 1.5 hourly rate 
$252.17  Refer to Bio#1  
20  Carrying out an activity outside standard working 
hours - veterinary inspector at 2.0 times his or her 
hourly rate   Person responsible for 
paying for the costs of 
the activity.  Veterinary inspectors – 2.0 hourly rate 
$318.04  Refer to Bio#1  
 Inspection of goods generally  
21 1 Inspection of goods (except goods imported for the 
personal use of the importer) for the purpose of 
ascertaining whether those goods  should be cleared  $88.89 per hour for each 
inspector involved  Importer  $102.27  Updated rate  
 Tests, examinations, and treatment of goods that harbour or may harbour organisms  
22 
 
23 
 
24 2 Tests, examinations, and treatments of imported 
goods, th at harbour, or may harbour, an organism, 
that are – 
(a) carried out by the Ministry; and  
(b) necessary to identify the organism, so as to 
enable an inspector to determine whether the 
goods should –  
(i) be cleared; or  
(ii) be moved from a transitional facility to a 
containmen t facility; or  $88.89 per hour for each 
inspector involved; and  
 
 
actual and reasonable costs of the 
tests, examinations, and 
treatments  Importer  - $102.27 per hour for each general 
inspector involved; and 
- $186.30 per hour for each veterinary 
inspector involved; and  
- actual and reasonable costs of the 
tests, examinations, and treatments  
 Updated rate  
 
New rate  
 
  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   35  Function, power, or duty for which fee or charge 
payable  Current f ee or charge  Fee or charge payable 
by Proposed fee  Comment  
(iii) continue to be held in a transitional or 
containment facility (as the case may be)  
 Inspection of motor cycles, mopeds, and motor  vehicles at ports approved as places of first arrival  
25 3 Inspection, and each re -inspection after treatment, of 
a consignment of a single used motor cycle or moped 
carried out at ports approved as paces of first arrival 
under section 37 of the Act for the purpose of 
ascertaining whether the consignment should be 
cleared  $14.22 per motor cycle or moped  Importer  $18.08  per motor cycle or moped  Updated rate  
26 4 Inspection, and each re -inspection after treatment, of 
a consignment of a single used motor vehicle having 
a gross laden weight not exceeding 3 500 kg (other 
than a motor cycle or moped) carried out at ports 
approved as paces of first arrival under section 37 of 
the Act for the purpose of ascertaining whether the 
consignment should be cleared  $36.00 per motor vehicle  Importer  $49.53 per motor vehicle  Updated rate  
27 5 Inspection, and each re -inspection after treatment, of 
a consignment of a single used motor vehicle having 
a gross laden weight exceeding 3 500 kg (other than 
a motor cycle or moped) carried out at ports 
approved as paces of first arrival under section 37 of 
the Act for the purpose of ascertaining whether the 
consignment should be cleared  $50.67 per motor vehicle  Importer  $60.79 per motor vehicle  Updated rate  
 Inspection of una ccompanied goods imported for personal use  
28 
29 
30 
31 
32 
33 
34 6 Inspection of unaccompanied goods imported for 
personal use of the importer for the purpose of 
ascertaining whether those goods should be cleared  $22.22 for 1 item  
$44.44  for 2 to 4 items  
$88.89  for 5 to 12 items  
$115.56  for 13 to 29 items  
$137.77  for 21 to 28 items  
$160.00 for 29 to 36 items  
$22.22 for each block or part 
block of 8 items exceeding 36 
items  Importer  - $25.57 for 1 item  
- $51.13 for 2 to 4 items  
- $102.27 for 5 to 12 items  
- $132.95  for 13 to 29 items  
- $158.52 for 21 to 28 items  
- $184.08 for 29 to 36 items  
- $25.57 for each block or part block 
of 8 items exceeding 36 items  Updated rates  
 
  
36  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries   Function, power, or duty for which fee or charge 
payable  Current f ee or charge  Fee or charge payable 
by Proposed fee  Comment  
 Inspection of goods not prescribed elsewhere in Schedule  
35 
 
36 7 Inspection, and each re-inspection after treatment of 
any goods (except accompanied goods imported for 
the personal use of the importer) that are not required 
to be inspected under the Act for the purpose of 
ascertaining whether those goods should be cleared  $88.89 per hour fo r each 
inspector involved  Importer  - $102.27 per hour for each general 
inspector involved;  
- $186.30 for each veterinary 
inspector involved  Updated rates  
 Monitoring controls on new organisms and inspection of animals, animal material, or plants  
37 
 
38 
 
 
 
 
 
39 8 Monitoring controls on new organisms in 
containment facilities  $88.89  per hour for each 
inspector involved  
$85.42  per hour for each 
veterinary inspector involved in 
inspecting an animal or animal 
material imported directly from a 
country that is a me mber of the 
European Community  Person holding an 
approval (issued under 
the Hazardous 
Substances and New 
Organisms Act 1996) to 
import the organism 
into containment, or to 
hold the organism in 
containment; or (where 
there is no approval) the 
importer or ow ner of 
the organism or the 
goods that harbour the 
organism  - $102.27 per hour for each general 
inspector involved;  
- $94.38 per hour for each  veterinary 
inspector involved in inspecting an 
animal or animal material imported 
directly from  Switzerland or  a 
country that is a member of the 
European Community ; 
- $186.30 per hour for each 
veterinary inspector involved in 
inspecting an animal or animal 
material imported directly from a 
country that is not a member of the 
European Community or from 
Switzerland;  Updated rates  
40 
 
 
 
 
 
41 
 
 
 
 
 
 
42 
 
 9 Inspection of an animal that is intended to be cleared, 
or directed to a transitional or containment facility, 
on arrival  $88.89 per hour for each 
inspector involved in inspecting 
an animal imported from a 
country that is not a member of 
the European Community  
 
 
 
 
 
 
 
 
$25.51 per animal imported 
directly from a country that is a 
member of the European Importer  - $102.27 per hour for each  general  
inspector involved in inspecting an 
animal  or animal material  imported 
from  a country that is not a member 
of the European Community or 
from  Switzerland;  
- $186.30 per hour for each 
veterinary inspector involved in 
inspecting an animal or animal 
material imported directly from a 
country that is not a member of the 
European Unio n or from 
Switzerland;  
- $28.19 per animal imported 
directly from  Switzerland or  a 
country that is a member of the Refer to Bio#5  
Updated rates  
 
 
 
 
 
 
 
 
 
 
 
No change proposed for 
assistance animals   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   37  Function, power, or duty for which fee or charge 
payable  Current f ee or charge  Fee or charge payable 
by Proposed fee  Comment  
 
43 
 
 
 
44 Community  
$35.56  per pet animal imported 
from a country that is not a 
member of the European 
Community  
No fee  applies in relation to an 
assistance animal imported from 
any country, if the animal is 
accompanying a person who 
requires animal assistance  European Community ; 
- $49.61 per pet animal imported 
from a country that is not a member 
of the European Community  or 
from Switzerland;  
- No fee ap plies in relation to an 
assistance animal imported from 
any country, if the animal is 
accompanying a person who 
requires animal assistance  
45 10 Inspection of an animal that  – 
(a) is on board a craft within New Zealand 
territory; and  
(b) is not intended to be cleared  $88.89  per hour for each 
inspector involved  Operator of craft  - $102.27 per hour for each general 
inspector involved  Updated rate  
46 
 
47 
 
 
 
 
 
48 11 Inspection and monitoring of an animal or plant held 
in a transitional or containment facility for the 
purpose of ascertaining whether the animal or plant 
should – 
(a) be cleared; or  
(b) be moved from a transitional facility to a 
containment facility; or  
(c) continue to be held in a transitional or 
containment facility, as the case may be  $88.89 per hour for each 
inspector involved  
$85.43 per hour for each 
veterinary inspector involved in 
inspecting an animal or animal 
material imported directly from a 
country that is a member of t he 
European Community  Importer  - $102.27 per hour for each general 
inspector involved ;  
- $94.38  per hour for each veterinary 
inspector involved in inspecting an 
animal or animal material imported 
directly from a country that is a 
member of the European 
Community  or from Switzerland;  
- $186.30  per hour for each 
veterinary inspector involved in 
inspecti ng an animal or animal 
material imported directly from a 
country that is not a member of the 
European Community  or from 
Switzerland  Updated rate  
 
 
Updated rate  
 
 
 
 
New rate   
38  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries   Function, power, or duty for which fee or charge 
payable  Current f ee or charge  Fee or charge payable 
by Proposed fee  Comment  
49 
 
 
 
 
 
50 
 
 
 
 
 
 
51 
 
 
 
 
52 12 Inspection of a consignment of animal material 
(other than fish meal) for the purpose of ascertaining 
whether it should be cleared  $88.89 per hour for each 
inspector involved in inspecting a 
consignment of animal material 
imported from a country that is 
not a member of the European 
Community  
 
 
 
 
 
 
 
$25.51 for inspection of 
documents for each consignment 
imported directly from a country 
that is a member of the European 
Community; and  
$51.02 for other types of 
inspection for each consignment 
imported directly from a country 
that is a member of the European 
Community   - $102.27 per hour for each  general  
inspector involved in inspecting a 
consignment of animal material 
imported from a country tha t is not 
a member of the European 
Community ; 
- $151.60 per hour for each 
veterinary inspector involved in 
inspecting an animal or animal 
material imported directly from a 
country that is not a member of the 
European Union or from 
Switzerland;  
- $28.19 for insp ection of documents 
for each consignment imported 
directly from a country that is a 
member of the European 
Community; and  
- $56.37 for other types of inspection 
for each consignment imported 
directly from a country that is a 
member of the European 
Community  Updated rates  
 Treatment, destruction, or disposal of risk goods  
53 13 Treatment, before being cleared, of risk goods 
imported –  
(a) in a person’s baggage (whether or not the 
baggage is accompanied); or  
(b) through the mail; or  
(c) among personal effects  Actual and reasonable costs of 
treatment; and any costs of 
packaging, storing, forwarding, 
and returning the goods before 
and after treatment  Importer  Actual and reasonable costs of 
treatment; and any costs of packaging, 
storing, forwarding, and returning the 
goods before and after treatment  No change to current basis 
of cost recovery  
54 14 Treatment of imported risk goods, other than risk 
goods specified in item 13  Actual and reasonable costs of 
treatment; and any costs of 
packaging, storing, forwarding, 
and returning the goods before 
and after treatment  Importer  Actual and reasonable costs of 
treatment; and any costs of packaging, 
storing, forwarding, and returning the 
goods before and after treatment  No change to current basis 
of cost recovery   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   39  Function, power, or duty for which fee or charge 
payable  Current f ee or charge  Fee or charge payable 
by Proposed fee  Comment  
55 15 Destruction, transportation, re -shipment, or other 
disposal of goods  Actual and reasonable costs of 
treatment; and any costs of 
packaging, storing, forwarding, 
and returning the goods before 
and after treatment  Importer  Actual and reasonable costs of 
treatment; and any costs of packaging, 
storing, forwarding, and returning the 
goods before and after treatment  No change to current basis 
of cost recovery  
56 16 Supervising, or advising on, destruction, 
transportation, re -shipment, or other disposal of 
goods $88.89 per hour for each 
inspector or biosecurity adviser 
involved  Importer  $102.27 per hour for each inspector or 
biosecurity adviser involved  Updated rate  
 Permits issued under import health standards  
57 
58 17 Processing an application for a permit, or amendment 
to a permit, under import health standards  $144.89  for each application 
processed  Applicant  - $191.95  unit charge ; plus  
- $102.27 per hour for each 
biosecurity advisor for processing 
beyond the standard time provided 
for in the unit charge  Refer to Bio#2  
 
 
 Transitional and containment facilities  
59 
60 18 Processing an application for approval of a 
transitional or containment facility, or a facility 
operator  $88.89 per hour for each 
inspector or biosecurity adviser 
involved  Applicant  - application fee $887.70 ; plus  
- $102.27 per hour for each 
biosecurity advisor for processing 
beyond the standard time provided 
for in the unit charge  where 
applicable  Refer to Bio#6  
61 19 Inspection and compliance auditing of a transitional 
or containment facility, to ascertain whether it should 
be approved, or continue to be approved, under 
section 39 of the Act  $88.89 per hour for each 
inspector or biosecurity adviser 
involved  Applicant o r facility 
operator (as the case 
may be)  $102.27 per hour for each inspector or 
biosecurity adviser involved  Updated rate  
62 20 Investigation and compliance auditing of a facility 
operator, or proposed operator, to ascertain whether 
the operator or proposed operator should be 
approved, or continued to be approved, under section 
40 of the Act  $88.89 per hour for each 
inspector or biosecurity adviser 
involved  Applicant or facility 
operator (as the case 
may be)  $102.27 per hour for each inspector or 
biosecurity adviser involved  Updated rate   
40  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries   Function, power, or duty for which fee or charge 
payable  Current f ee or charge  Fee or charge payable 
by Proposed fee  Comment  
63 21 Assessing results obtained from inspection and 
compliance auditing of a transitional or containment 
facility, determining whether to confirm that the 
facility can continue to be approved under section 39 
of the  Act and, if appropriate, issuing confirmation 
documentation . Includes proposed expanded scope of 
functions.  $142.23 per annum for each 
registered facility  Facility operator  $298.05  Refer to Bio#6  
Includes proposed expanded 
scope of functions  
  
 Auditing  a ruminant protein control programme  
64 22 Investigation and compliance auditing of a ruminant 
protein control programme under regulation 7A of 
the Biosecurity (Ruminant Protein) Regulations 1999  $132.99 per hour for each 
inspector or authorised person 
involved who is employed under 
the State Sector Act 1988 or who 
is an agent of, or contracted to, 
the Ministry  Operator  $186.30  Updated rate  
 Functions, powers, and duties not prescribed elsewhere in Sched ule 
65 23 Performing a function, power, or duty –  
(a) required to be undertaken under the Act or 
regulations made under the Act; and  
(b) not prescribed elsewhere in the Schedule  $88.89 per hour for each 
inspector or biosecurity adviser 
involved  Person whose actions 
result in the function 
being required  $102.27 per hour for each inspector or 
biosecurity adviser involved  Refer to Common#5  
Updated rate  
 Disbursements  
66     Actual and reasonable costs of  
disbursements.  Refer to Common#4  
 Other biosecurity advisor time  
67  Carrying out an activity relating to  equivalences or 
Chief Technical Officer directions due to an 
individual or company’s non -compliance with import 
health standards or other import regulations, or  
providing a dvice, beyond an initial 15 m inute period, 
to an importer in relat ion to the importation of goods.   Importer  $102.27  per hour for each  inspector or 
biosecurity advisor involved  
 Refer to Bio#3  
 
   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   41 Biosecurity (System Entry Levy) Order 2010  
Schedule – Fees and charges  
  Biosecurity (System Entry) Levy  
The biosecurity levy covers a proportion of the costs common to all activities 
associated with managing the biosecurity risks of imported goods at the border.  Fee or charge  Proposed fee  Comment  
68  
 Importation for which an inward carg o transaction fee is payable under regulation 
13A(2)(a) of the Customs and Excise Regulations 1996 in respect of cargo or goods 
carried on a ship or boat  $11.11 per import ation  
 $13.15  Updated rate  
69  Importation for which an inward cargo transaction fee is payable under  section 
132(2)(b) of those regulations in respect of cargo or goods carried on an aircraft  $11.11 per importation  
 $13.15  Updated rate  
70  Importation for which an import entry transaction fee is payable under regulation 
24A of those regulations.  $15.33 per importation  $17.37  Updated rate  
71  Maximum rate of levy  
The maximum rate of the levy is $16.00 (exclusive  of goods and services tax) per 
leviable importation.  $16.00 per importation  $18.00  Refer to Bio#8  
  
42  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  5 Cost recovery under Agricultural Compounds and Veterinary 
Medicines Act 1997  
5.1 OVERVIEW  
Agricultural compounds are used through many areas of the primary industries. The setting of 
appropriate standards, input into international conventions, such as the Cod ex Alimentarius 
Commission (CODEX) and Veterinary Co -operation on International Harmonisation (VICH), 
and regulation of these compounds is an important part of maintaining trade, food safety and 
biosecurity. MPI provides a range of services under the ACVM Act, including registration of 
trade name products, compliance activities, setting standards and guidance on agricultural 
compounds.  
This is the first review of fees since 2008.  
The current review of the Food Sector (the Agricultural Compounds and Veterina ry 
Medicines, Animal Welfare, Animal Products and Wine Acts) covers approximately 200 fees, 
with total revenue for ACVM 2014/15 of $1.37 million.  
5.2 ACTIVITIES UNDER THE  AGRICULTURAL COMPOUN DS AND VETERINARY 
MEDICINES (ACVM) ACT  1997  
This section sets out the  services provided by MPI under the ACVM Act  1997  to regulated 
parties and to interested industry partie s, and it details the sub -services provided.  
5.2.1 ACVM  Act functions  
MPI is charged  with d eveloping, implementing and confirming compliance with  the 
requirem ents of the Act, which consist of : 
 authoris ation of  agricultural compounds and monitor ing their importation, manufacture, 
sale and use;  
 recogni tion of  persons, classes of persons and organisations such as veterinarians;  
 approv al of operating plans such as Good Manufacturing Practice ( GMP ) approvals;  
 suspen sion of  registrations;  
 recall  of agricultural compounds;  
 prohibit ion of  agricultural compounds;  
 issue  of certificates of compliance;  
 develop ing, implement ing, evaluat ion and review  of requirements , and gui dance relating 
to agricultural compounds;  
 maint aining public registers  and lists; 
 confirm ation of compliance and investigat ion of  non-compliance.  
MPI’s  ACVM Group provides services in several areas , including : 
 requirements and guidance;  
 authorisation;  
 audit;  
 compliance and monitoring.  
More details of the ACVM Group’s activities are provided in Appendix 1, section 5.8  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   43 5.3 POLICY PROPOSALS  
ACVM#1 – Recover  costs for provisionally registering a trade name product  
ACVM#2 – Clarify that MPI can recove r costs for determining what class an imported 
product falls under when inspecting  
ACVM#3 – Recover costs for recognition functions under Part 3A of the Act  
ACVM#4 – Revise uses for which fees and charges payable for setting standards can be  used 
 
5.4 ACVM#1 – RECOVER  COSTS FOR PROVISIONALLY RE GISTERING A TRADE 
NAME PRODUCT  
5.4.1 Problem  definition  
Fees and charges regulations unclear about whether MPI can recover costs  for 
provisionally registering a trade name product of an agricultural compound  
The c urrent fees and charges regulations state ‘registering’, which has been interpreted to 
include both provisional and full registration based on the definition of ‘registered’ in the Act. 
However, we do not consider this to be sufficiently clear.  
Our inabili ty to recover costs for this f unction  could result in MPI under -covering on the cost 
of providing these services. If the current fixed approach is to continue , MPI would need to  
factor the costs of providing this function  into other  fees provided for under  the Agricultural 
Compounds and Veterinary  Medicines (Fees and Charges) Regulations 2002 and to spread the 
additional cost over all other fees when fees are next updated . However, this would be  
inequitable as other users would  be penalised with a higher rate because we were unable to 
charge applicants seeking provisional registration. This outcome would not support efficiency 
or be justifiable as the charges and fees would be higher than the cost of service delivery.  
5.4.2 Proposed f ee for provisional registration of a trade name product  
MPI proposes to e stablish a new fixed fee  of $155.00  and hourly rate assessment c harge (in 
15-minute intervals after 1 hour) of $155.00 for provisionally registering a trade name product 
of an  agricultural compound  under section 26. This new item would be inserted into Part 3 of 
the Schedule of the  Agricultural Compounds and Veterinary  Medicines (Fees and Charges) 
Regulations 2002.  
5.4.3 Questions for consideration  
Question 5.4 
Do you consider the proposed approach to be fair to those who provisionally register 
products and other users of the product registration service?  
 
5.5 ACVM#2 – CLARIFY THAT MPI CAN  RECOVE R COSTS FOR DETERMIN ING 
WHAT CLASS AN IMPORT ED PRODUCT FALLS UND ER WHEN INSPECTING  
5.5.1 Background  
MPI Biosecurity inspectors determine what class imported products fall under when 
inspecting them for clearance under s ections  5 and 6 of the Act. This activity i s charged at the 
Biosecurity Inspectors’ hourly rate, which is currently $102.27.  
  
44  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  5.5.2 Problem  definition  
Legislation is u nclear  on whether  MPI can recover  costs  for determining what class an 
imported product falls under when inspecting.  
It is not clear whether this is a function that can be included in charge 1 in Part 2 of the 
Agricultural Compounds and Veterinary Medicines (Fees and Charges) Regulations 2002.  
5.5.3 Proposed fee for determining a class for imported products  
Clarify that MPI can recover costs when determining what class an imported product falls 
under when inspecting under the Act.  
MPI proposes to amend the wording in Part 2, item 1, of the Schedule of the Agricultural 
Compounds and Veterinary Medicines (Fees and Charges) Regulations 2002 to in clude 
determining the status of a product . 
5.5.4 Questions for consideration  
Question  5.5 
1) Do you think these product class determinations should be cost -recovered as 
proposed?  
2) If not, how should they be recovered?  
 
5.6 ACVM#3 – RECOVER COSTS FOR RECOGNITION FUNC TIONS UNDER PART 
3A OF THE ACT  
5.6.1 Background  
The Agricultural Compounds and Veterinary Medicines  Amendment Act 2012 amended the 
principle Act by inserting a new Part 3A providing for recognised agencies, persons and 
classes of persons . Section s 44C, 44E, 44F and  44G of the Act provide for recognition. 
Section 44I requires applicants to submit applications and pay a prescribed application fee.  
5.6.2 Problem  definition  
MPI has n ot yet implemented cost recovery for recognition functions under Part 3A of the 
Act 
Fees and charges under Part 3A of the Act have not yet been implemented. The costs of 
providing these services are being met by the Crown, but are private or industry goods  in 
nature. The current review is the first available opportunity to promulgate these fees or 
charges.  
5.6.3 Proposed fee and hourly rate assessment charges for Part 3A recognition functions  
MPI proposes to e stablish a new fixed fee  of $155.00  and hourly rate assessment c harge (in 
15-minute intervals after 1 hour) of  $155.00  for: 
 applications  for recognition under section 44I;  
 recognition of certain persons without application under section 44F;  
 applications to renew recognition  under section 44R;  
 applications to substitute recognition  under section 44S.  
We also propose to establish an annual fee payable by each recognised agency, recognised 
person or recognised class of person under section 44T.   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   45 5.6.4 Questions for consideration  
Question  5.6 
Would you prefer a different method of cost recovery for recognition functions under Part 
3A of the ACVM Act? If so, what?  
 
5.7 ACVM#4 – REVISE USES FOR WHIC H FEES AND CHARGES P AYABLE FOR 
SETTING STANDARDS CA N BE USED  
5.7.1 Background  
Part 1 of the Schedule of the Agricultural Compounds and Veterinary Medicines (Fees and 
Charges) Regulations 2002 provides for annual fees payable by certain persons for:  
 
(a) setting standards to identify and evaluate risks and benefits under  section 21  of the 
Act; and,  
(b) participating  in national and international forums, having regard to New Zealand's 
international obligations, assurances, and reputation in identifying risks and benefits 
under  section 21  of the Act.  
 
MPI considers  these standard setting services as industry/club  goods. The range of standard 
setting activities is detailed in section 5.8, Appendix 1.  
5.7.2 Problem  definition  
Uncertainty about whether legislation provides for recovery of costs for these services  
The regulations prescribe setting standards to identify and evaluate r isks and benefits under  
section  21 of the Act. There is uncertainty about whether the current defi nition covers the 
costs of providing the activities described above.  The intention when the current regulations 
were made was for the costs of these activities to be recoverable.  
5.7.3 Proposal to make  the reference to ‘standard setting ’ more general  
MPI proposes that the reference to standard setting in Part 1 (a) of the Schedule of the 
Agricultural Compounds and Veterinary Medicines (Fees and Charges) Regulations 2002 
should be amended  to clarify that the services described include (as outlined above ) the 
services and provision of related advice in the following policy areas:  
 development and review of standards for the regulatory control of agricultural compounds 
(included generic work  relating  to general operational standards development under the 
Act);  
 technical contribution to national and international forums on standards for agricultural 
compounds12;  
 technical policy advice.  
The intention is that the costs for undertaking standard -setting activities would be 
recoverable . 
                                                
12 Examples of multilateral work are CCPR (Codex Committee on Pesticide Residues),  VICH, OECD (harmonisation of 
pesticides requirements),  CCRVDF (Code x Committee on residues of veterinary drugs in food) and the Codex antimicrobial 
task force. An example of the bi -lateral work is the work that the ACVM Group does to support  the Mutual Recognition 
Agreement with the European Union (EU) on Good Manufacturi ng Practice for selected veterinary medicine products.   
46  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  The Agricultural Compound s and Veterinary Medicines (Fees and Charges) Regulations 2002 
currently also provide that the amount payable is a ‘fee or charge’. MPI proposes that this be 
changed to a levy to reflect the fact that the services are ‘industry/club ’ goods.  
5.7.4 Questions for consideration  
Question 5.7 
Do you agree with the proposal to make the reference to ‘standard setting’ in the ACVM 
(Fees and Charges) Regulations more general?  
 
5.8 APPENDIX 1  – MPI ACTIVITIES UNDER  THE AGRICULTURAL COM POUNDS 
AND VETERINARY MEDIC INES ACT  
5.8.1 Requirement s and guidance function  
The setting of requirements and guidance consists of the following services and related  policy  
advice:  
 development and review of requirements and guidance for the regulatory control of 
agricultural compounds (includ ing generic requirements and guidance -setting work  
relating to general operational requirements and guidance development under the  Act);  
 technical contribution to nation al and international forums on requirements and guidance 
for agricultural compounds;   
 technical policy advice.  
The key services undertaken under each of these service areas are as follows:  
 provision of public information in relation to requirements and gui dance and related 
information for regulated parties;  
 representation of the New Zealand position at the CODEX, Organisation for Economic 
Co-Operation and Development ( OECD ), VICH and other international  forums for setting  
standard s; 
 representation at relevant trans-Tasman forums;  
 technical support and advice for the development, review and maintenance of the Act and 
regulations made under it;  
 technical support and advice for other parts of MPI;  
 technical support and advice on market a ccess issues;  
 development and review of requirements and guidance for agricultural compounds and 
recognised agencies and persons, including managing regulatory,  compliance and 
performance issues;  
 support for and co -ordination of the Agricultural Compounds and Veterinary Medicines 
Advisory Council (AVMAC);  
 technical contribution to international forums such as  trans-Tasman harmonisation, the 
New Zealand and European Union mutual recognition arrangements, OECD Pesticides 
Forum, VICH meetings, CODEX meetings a nd bilateral relationships;  
 consider ation of  residue and trade implications in relation to applications for registration 
and for exemption under special circumstances ;  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   47  development and maintenance of business systems necessary for the delivery of the 
activities above . 
5.8.2 Appraisal services  
Under the Act, MPI  provides the  following appraisal services to regulated parties:  
 consider ation of  applications for registration and variations to registrations of agricultural 
compounds and other related approvals suc h as those related to manufacture, sale and use;  
 process ing of  applications for class determination;  
 process ing Generally Recognised as Safe requests;  
 reassessment of registrations;  
 recognition of agencies, persons and classes of persons to undertake some services 
relating to Act functions;  
 maintain ing public registers of agricultural compounds and other relevant approvals;  
 providing clearance of agricultural compounds at the border;  
 consider ation of  applications for the exemptions from the requirement to r egister certain 
products13; 
 consider ation of  application for exemptions to register products in special 
circumstances14; 
 consider ation of  applications for the approval of operating plans (including the approval 
and ongoing audit of GMP premises);  
 suspen sion and cancel lation of  approvals in certain circumstances ; 
 issuing and withdraw ing certificates of compliance.  
Within these areas, MPI provides the following  key services : 
 process ing enquiries relating to regulatory control under the Act;  
 process ing applications for registration and variations of registrations of trade name 
products and other approvals;  
 provid ing for clearance of agricultural compounds at the border;  
 recogni tion of  agencies and persons to undertake activities related to the Act,  such as data 
assessors, traders, manufacturers, facilities and systems;  
 develop ing and maintain ing a public register for registered trade name products and for 
other approvals ;  
 provi ding a service to enable the public to inspect registers.  
5.8.3 Compliance and monitoring  
MPI provides t he following compliance and monitoring services in accordance with the Act : 
 border services for controlling the importation of agricultural compounds;  
 monitoring activities related to the manufacture, sale and use of agricultural compo unds;  
                                                
13Product groups with known risk factors are assessed and exempted by class. Risks associated with their use are managed 
through generic conditions of exemption in regulations.  
14Special circumstances ma y include drug shortages, and agricultural compound use to control the outbreak of disease.   
48  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries   provision and operation of compliance programmes for monitoring compliance with 
legislation and or conditions;  
 appointment of ACVM Act Officers ; 
 investigation and enforcement of the provisions of the Act.  
Within this area, MPI provides the following services for regulated parties : 
 monitoring importation of agricultural compounds;   
 auditing and monitoring ACVM Officers and regulated parties and activities;  
 conducting monitoring and audit of manufacturers, distributors, traders , wholesalers , and 
users o f agricultural compounds;  
 monitoring and audit ing persons approved to provide authorisation for agricultural 
compounds;  
 resolving complaints related to compliance;  
 managing recalls of agricultural compound;  
 applying appropriate sanctions in the event of no n-compliance with the Act ; 
 investigation and prosecuti on of  illegal activities associated with the use of agricultural 
compounds.  
5.8.4 Standard  setting activities  
MPI carries out  a range of  activities related to  setting of standard s under the Act and 
subsidiary regulations and notices.   
The setting of  standards involves the provision of services and related advice in  the following  
policy areas:  
 development and review of standards for the regulatory control of agricultural compounds 
(includ ing generic  work relating  to general operational standards development under the 
Act);   
 technical contribution to national and international forums on standards for agricultural 
compounds ;  
 technical policy advice.  
The key services undertaken by MPI under each of these service areas are as follows:  
 providing public information in relation to standards, guidelines and related information 
for regulated parties;  
 representing the New Zealand position at CODEX, OECD, VICH and other international 
standard setting forums;  
 representing New Zealand at relevant trans -Tasman forums;  
 technical support and advice for the development, review and maintenance of the Act and 
regulations made under it;  
 technical support and advice for other parts of MPI;  
 technical supp ort and advice on market access issues;  
 development and review of standards for agricultural compounds and recognised agencies 
and persons, including managing regulatory, compliance and performance issues;   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   49  support for and co -ordination of the Agricultural Compounds and Veterinary Medicines 
Advisory Council (AVMAC);  
 technical contribution to international forums such as trans -Tasman harmonisation, the 
New Zealand and European Union, mutual recognition arrangements, OECD P esticides 
Forum, VICH meetings, CODEX  meetings and bilateral relationships;  
 consider ation of  residue and trade implications in relation to applications for registration 
and for exemption under special circumstances;  
 maintenance of business systems for the delivery of the activitie s above.  
  
50  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  5.9 APPENDIX 2 – EXISTING AND PROPOSE D FEES UNDER AGRICUL TURAL COMPOUNDS AND VETERINARY MEDICINES  ACT 
1997  
Fees are shown as GST exclusive.  
Shaded columns and headers are  for referencing and commentary purposes . Light grey shaded content is for new proposals . Additional line spacing and column/row lines have been 
added for readability.  
 
Agricultural Compounds and Veterinary Medicines (Fees and Charges) Regulations 2002  
Part 1 – Fees and charges payable for setting standards  
 Function, power, or duty for which fee or charge payable  Fee or charge  Fee or charge payable by  Proposed fee  Comment  
 
1 
 
2 For –  
(a) setting standards to identify and evaluate risks and 
benefits under section 21 of the Act; and  
(b) participating in national and international forums, 
having regard to New Zealand’s international 
obligations, assurances, and reputation in identifying 
risks and benefits under section 21 of the Act   
$485.00  
 
$485.00  Payable annually by each – 
(a) registrant:  
(b) person who holds an 
exemption under 
section 8C of the Act:  
(c) person who has 
obtained approval of 
an operating plan:  
(d) recognised person   
$512.00  
 
$512.00  Refer to ACVM#4  
 
 
Amend the reference to 
standard -setting to 
clarify.  
Change categorisation 
to levy to reflect the 
basis of charging.  
 
 
 
   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   51 Part 2 – Fees and charges payable for compliance monitoring  
 Function, power, or duty for which fee or charge payable  Fee or charge  Fee or charge payable by  Proposed fee  Comment  
3 
 
4 For an application for an inspector to give authority or 
clearance under section 5 or 6 of the Act  $88.89  per hour  
plus  
actual cost of disbursements  Payable by the importer  - $102.27 per hour, plus  
 
- actual cost of disbursements  ACVM#2  
Amend wording to 
include dete rmining the 
status of a product.  
5 
6 
 
 
7 For monitoring compliance with conditions imposed 
(whether on the registrant, importer, manufacturer, seller, 
purchaser, or user) under the Act or regulations made under 
the Act  $132.98 per hour , plus  
 
 
 
actual cost of disbursements  Payable by the person to 
whom the conditions apply  - $155.00, plus  
- $155.00 per hour, charged in 15 -
minute increments, after the first 
hour, plus  
- actual cost of disbursements  Common# 1 
Common#4  
8 
9 
 
 
10 For inspection for the purpose of enforcing provisions of the 
Act or regulations made under the Act  $132.98 per hour , plus  
 
 
 
actual cost of disbursements  Payable by the person being 
inspected  - $155.00, plus  
- $155.00 per hour, charged in 15 -
minute increments, after the first 
hour, plus  
- actual cost of disbursements  Common# 1 
Common#4  
11 
12 
 
 
13 For the recall of an agricultural compound under section 35G 
of the Act  $132.98 per hour , plus  
 
 
 
actual cost of disbursements  Payable by the person 
holding the agricultural 
compound  - $155.00, plus  
- $155.00 per hour, charged in 15 -
minute increments, after the first 
hour, plus  
- actual cost of disbursements  Common# 1 
Common#4  
 
   
52  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  Part 3 – Fees and charges payable for applications, accreditations, and registers  
 Function, power, or duty for which fee or charge payable  Fee or charge  Fee or charge payable by Proposed fee  Comment  
14 
15 
 
 
16 For responding to enquiries about form and content of 
applications under section 10 of the Act  $132.98 per hour , plus  
 
 
 
actual cost of disbursements  Payable by the enquirer  - $155.00, plus  
- $155.00 per hour, charged in 15-
minute increments, after the first 
hour, plus  
- actual cost of disbursements  Common# 1 
Common#4  
17 
18 
 
 
19 For considering applications for waiver of notice under 
section 15 of the Act  $132.98 per hour , plus  
 
 
 
actual cost of disbursements  Payable by the  applicant  - $155.00, plus  
- $155.00 per hour, charged in 15 -
minute increments, after the first 
hour, plus  
- actual cost of disbursements  Common# 1 
Common#4  
20 
21 
 
 
22 For assessing whether an application to register a trade name 
product complies with section 10  of the Act  $132.98 per hour , plus  
 
 
 
actual cost of disbursements  Payable by the applicant  - $155.00, plus  
- $155.00 per hour, charged in 15 -
minute increments, after the first 
hour, plus  
- actual cost of disbursements  Common# 1 
Common#4  
23 
24 
 
 
25 For considering whether to  provisionally register a trade 
name product of an agricultural compound under section 26.    Payable by the applicant  - $155.00, plus  
- $155.00 per hour, charged in 15 -
minute increments, after the first 
hour, plus  
- actual cost of disbursements  ACVM#1  
Common#4  
 
26 
27 
 
 
28 For considering an application to register a trade name 
product or to vary 1 or more conditions on a registered trade 
name product  $132.98 per hour , plus 
 
 
 
actual cost of disbursements  Payable by the applicant  - $155.00, plus  
- $155.00 per hour, charged in 15 -
minute increments, after the first 
hour, plus  
- actual cost of disbursements  Common# 1 
Common#4  
29 
30 
 
 
31 For considering an application for approval of, amendment 
to, or revocation of an operating plan under section 28 of the 
Act $132.98 per hour , plus 
 
 
 
actual cost of disbursements  Payable by the applicant  - $155.00, plus  
- $155.00 per hour, charged in 15 -
minute increments, after the first 
hour, plus  
- actual cost of disbursements  Common# 1 
Common#4  
32 
33 
 
 
34 For considering applications for recognition under section 
44I  Payable by the applicant  - $155.00, plus  
- $155.00 per hour, charged in 15 -
minute increments, after the first 
hour, plus  
- actual cost of disbursements  ACVM#3  
Common#4  
  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   53  Function, power, or duty for which fee or charge payable  Fee or charge  Fee or charge payable by Proposed fee  Comment  
35 
36 
 
 
37 For considering applications for recognition of certain 
persons without application under section 44F   Payable by the applicant  - $155.00, plus  
- $155.00 per hour, charged in 15 -
minute increments, after the first 
hour, plus  
- actual cost of disbursements  ACVM#3  
Common#4  
 
38 
39 
 
 
40 For considering applications to renew recognition under 
section 44R   Payable by the applicant  - $155.00, plus  
- $155.00 per hour, charged in 15 -
minute increments, after the first 
hour, plus  
- actual cost of disbursements  ACVM#3  
Common#4  
 
41 
42 
 
 
43 For considering applications to substitut e recognition under 
section 44S   Payable by the applicant  - $155.00, plus  
- $155.00 per hour, charged in 15 -
minute increments, after the first 
hour, plus  
- actual cost of disbursements  ACVM#3  
Common#4  
 
44 
45 
 
 
46 For ongoing recognition   Payable by the applicant  - $155.00, plus  
- $155.00 per hour, charged in 15 -
minute increments, after the first 
hour, plus  
- actual cost of disbursements  ACVM#3  
Common#4  
 
47 
48 
 
 
49 For recognising a person under section 62 of the Act  $132.98 per hour , plus 
 
 
 
actual cost of disbursements  Payable by the recognised 
person  - $155.00, plus  
- $155.00 per hour, charged in 15 -
minute increments, after the first 
hour, plus  
- actual cost of disbursements  Common# 1 
Common#4  
50 For registering a trade name product in the register of trade 
name products or for varying 1 or more conditions on a 
registered trade name product  $432.00  Payable on application by 
the applicant  $512.00  Updated rate  
51 
52 
 
 
53 For inspecting the register of trade name products  $132.98 per hour , plus 
 
 
 
actual cost of disbursements  Payable at completion of 
the inspection by the person 
inspecting the register  - $155.00, plus  
- $155.00 per hour, charged in 15 -
minute increments, after the first 
hour, plus  
- actual cost of disbursements  Com mon# 1 
Common#4   
54  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries   Function, power, or duty for which fee or charge payable  Fee or charge  Fee or charge payable by Proposed fee  Comment  
54 
55 
 
 
56 For considering whether to approve under section 8C of the 
Act the importation, manufacture, sale, or use of an 
agricultural compound without registration  $132.98 per hour , plus 
 
 
 
actual cost of disbursements  Payable by the person 
seeking the approval  - $155.00, plus  
- $155.00 per hour, charged in 15 -
minute increments, after the first 
hour, plus  
- actual cost of disbursements  Common# 1 
Common#4  
57 
58 
 
 
59 For suspension under section 30A of the Act of the 
registration of a trade name product registered under section 
21 or 27 of the Act  $132.98 per hour , plus 
 
 
 
actual cost of disbursements  Payable by the registrant  - $155.00, plus  
- $155.00 per hour, charged in 15 -
minute increments, after the first 
hour, plus  
- actual cost of disbursements  Common# 1 
Common#4  
60 
61 
 
 
62 For considering whether to issue a certificate of compliance 
under section 35A of the Act  $132.98 per hour , plus 
 
 
 
actual cost of disbursements  Payable by the applicant  - $155.00, plus  
- $155.00 per hour, charged in  15-
minute increments, after the first 
hour, plus  
- actual cost of disbursements  Common# 1 
Common#4  
63 
64 
 
 
65 Performance of a function, power or duty that is:  
 required to be undertaken under the Act, including 
subsidiary regulations and notices;  
 not prescribed elsewhere in the relevant cost recovery 
regulations.   Payable by the person 
whose actions resulted in 
the specific function, power 
or duty being required.  - $155.00, plus  
- $155.00 per hour, charged in 15 -
minute increments, after the first 
hour, plus 
- actual cost of disbursements  Common #5  
Common#4  
 
  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   55 6 Animal Products Act 1999 cost recovery  
6.1 OVERVIEW  
The processing of animal material into products for use, trade and export is a growing 
industry. Our trading partners need assurances New Zealand’s exports of live animals, 
germplasm and other animal material are fit for use, and we need to ensure that imp orts meet 
relevant standards. MPI provides a range of services under the Animal Products Act, 
including standard setting . 
This is the first comprehensive review of fees since 2008, though some fees were updated in 
2011.  
The current review of the Food Secto r (the Agricultural Compounds and Veterinary 
Medicines, Animal Welfare, Animal Products and Wine Acts) covers approximately 200 fees , 
with total fees for services related to Animal Products in 2014/15 of around $10 million .  
More significant proposed  chang es include a move  to full recovery for live animal and 
germplasm exports , which have historically  been under -recovered by MPI.  
The proposals would result in increased cost  recovery of $7.5 million by MPI from the food 
sector, from $55.3 million to $62.8 million. This takes into account savings from the merger 
of the New Zealand Food Safety Authority  and the Ministries of Fisheries and Agriculture 
and Forestry  of $23.6 million, of which $2.8 million is attributable to industry and has been 
used to offset additional cost increases for industry.  
6.2 ACTIVITIES UNDER THE  ANIMAL PRODUCTS ACT 1999  
In administering the Animal Products Act 1999, MPI carries out activities  in the following 
key areas:  
 setting of New Zealand export standards;  
 facilitating exports (including official assurances);  
 providing approvals and registrations;  
 event and emergency response;  
 managing compliance, which covers monitoring and audit, invest igations and 
enforcement;  
 policy advice (including technical input).  
 
The main activities in each of these areas are described in more detail in section 6.37, 
Appe ndix 1.  
6.3 MPI VERIFICATION SER VICES ACTIVITIES  
6.3.1 Overview  
MPI Verification Services is responsible  for activities under the following Acts:  
 Animal Products Act 1999 ; 
 Animal Welfare Act 1999 ; 
 Biosecurity Act 1993 ; 
 Hazardous Substances and New Organisms Act 1996 ;  
 Food Act s 1981  and 2014.  
MPI V erification Services is accountable for providing clearance, verification and official 
assurance services to over 3,800  businesses operating under the Animal Products Act 1999, 
Animal Welfare Act 1999, Biosecurity Act 1993, Hazardous Substances  and New Organisms  
56  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  Act 1996 and Food Act 1981 , to confirm  that New Zealand and overseas market access 
requirements are met. Most  of that service is provided to business exporting animals, animal 
products and animal materials.  
The Ministry  employ s more than 27 0 staff  for the provision of these services  and generate s 
direct and indirect costs of over $37 million a year . Of the staff providing verification and 
certification, 200 are registered veterinarians and 30 hold university qualifications in science 
or agriculture. MPI participates in the New Zealand Veterinary Association veterinary salary 
bench marking surveys, t o ensure total MPI veterinary remuneration remains relative to 
market.  
Staff work throughout New Zealand providing service to registered exporters, importers, 
primary and secondary processing business , and biosecurity containment facilities , covering a 
wide range of product types , including eggs, game, hides and skins, honey, live animals, 
meat, poultry, pork  and processed seafood .  
MPI Verification Services is accredited to ISO17020 and is a recognised agenc y under the 
Animal Products Act 1999.  
6.3.2 Services provided by MPI V erification Services  
MPI Verification Services provides a range of food safety and biosecurity verification and 
certification services to enable market access strategies and support standards setting , 
including : 
 verification and certificati on services to processing companies (for example, meat, 
seafood, game and dairy) ;  
 performing imported foods clearance procedures (most of this work occurs in Auckland 
but all regions  are involved  to some degree ); 
 verifying containment and transitional fac ilities under the Biosecurity Act 1993 .  
Details of MPI’s Verification Services structure are provided in section 6.38, Appendix  2. 
The export meat sector accounts for 80  percent of the agency’s  activities. This  sector  includes 
slaughterhouses, meat and fish pack  houses, cold storage facilities and other specialised 
premises processing animal products.  
The agency  also provides certification with official assurances that enable products to enter 
overseas markets. Improved market access conditions are negotiated on the back of the 
strength of Verification Services credibility.  
The performance of the agency and its operators is subject to both internal (MPI S ystems 
Audit Team) and external (overseas regulatory authorities) audits, and access to overseas 
markets is depend ent on satisfactory audit outcomes.  
Establishment and circuit verifications  
Frontline staff work either in physical establishments  or in a circuit . In some cases 
establishment staff perform some circuit verifications.  Establishment staff are full -time 
veterinarians, which is mandated by market access requirements.  
Staff working in circuits are a combi nation of veterinarians and non -veterinarians. Unlike the 
establishment  staff, circuit staff are not located full -time in a single premise . They carry out 
their work at  a number of different premises at frequencies largely determined by the 
performance of the operator in meeting regulatory requirements. In addition , specific visits 
are mandated by some markets, known as  veterinarian market access visits.   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   57 6.3.3 Cost recovery approach for Verification Services  
The fees and charges that correspond to Verification Se rvices are prescribed in Part 7 of the 
Animal Products (Fees, Charges, and Levies) Regulations 2007.  Operators pay depending on 
whether they fall into the circuit or establishment charging regime s. 
 Circuit charges refer to charges payable in respect of any  place or premises where the 
verification functions are performed by Authority verifiers who are not permanently or 
semi-permanently based at the place or premises . 
 Establishment charges refer to charges payable in respect of any place or premises where 
the verification functions are performed by Authority verifiers who are permanently or 
semi-permanently based at the place or premises . 
MPI’s Verification Services charges comprise:  
 A basic charge  (also known as a programme charge), which represents MPI’s  indirect 
and overhead costs, although some circuit sectors are charged a licence fee in lieu of a 
basic charge; and  
 Hourly rates  that represent MPI’s variable costs.  MPI may also charge at higher ‘penal’  
and ‘overtime’  rates where MPI staff are requested to work outside the usual hours or 
situations.  
 
Establishment hourly charges  
The basic hourly charge ( programme charge) is calculated annually based on MPI verifier 
FTE (2 ,080 hour s a year available  full-time) staffing numbers at an establishment. These 
charges are billed as a bulk amount per invoice period.  
The hourly charges are the frontline rate for actual hours on site and contain a component of 
frontline overhead. The rates for a supervising and meat veterinarian vary but both contain the 
same amoun t of overhead.  
Overtime and penal time rates are calculated from the frontline hourly charge rate minus the 
overh ead component.  
Circuit hourly charges  
The frontline circuit rate for both a veterinarian and  a travelling technical supervisor are made 
up of a basic hourly charge ( programme) rate , currently $20.97 , along with an hourly ra te 
charge, currently $93.04.  
The industry sectors associated with the processing of fish and operators of cool stores are 
currently charged a reduced hourly frontline rate and do not pay the basic hourly  programme  
rate in accordance with historical NZFSA cost recovery policy settings . They do , however , 
pay an annual charge pro rata monthly invoice. These charges are currently:  
 stores , $1,100 a year;  
 primary processing of fish , $549 a year;  
 primary processing of bivalve molluscan shellfish , $1,547 a year.  
 
Overtime and penal time rate s apply and a re calculated from the frontline rate minus the basic 
hourly charge.  Proposals for Verification Services are discussed in Part 6A.  
6.4 LIVE ANIMAL EXPORT SERVICES  
MPI’s services for the live animal and germplasm sector include the following:  
 export standards and systems — developing, implementing, monitoring and reviewing 
export standards and systems;   
58  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries   market access maintenance — maintaining  access to existing overseas markets by means 
of negotiations of market access conditions and specifications according to changing 
overseas authorities’ requirements;  
 new market access — developing new market access protocols and negotiating 
requirements for exporting live animals and germplasm to a particular country or market;  
 official assurances — providing verification and inspection services and issuing official 
assurances to governments of importing countries;  
 negotiating equivalences  — negotiating equivalences  and dispensations  to importing 
countr ies’ requirements;  
 recognitions and approvals — running official assurance programmes and administering 
the systems for recognitions and approvals of recognised persons and agencies involved in 
official assurances to foreign governments , work that also includes approval of germplasm 
centres under the MPI Official Assurance Programme . 
6.5 DAIRY INDUSTRY SERVI CES 
MPI provides  a range of services to the dairy industry, including  
 compliance and performance monitoring;  
 development and maintenance of New Zealand and export standards;  
 development and maintenance of market access;  
 processing of Export Declaration forms;  
 auditing exp orters;  
 maintenance of electronic certification;  
 verification services;  
 monitoring dairy residues.  
Further details of MPI’s services and activities are provided in section  6.39, Appendix 3.  
6.6 POLICY PROPOSALS  
6A - Live animal and germplasm exports  
APA#1 – Change the method of charging for negotiating and maintaining market access for 
the live animal and germplasm sectors  
APA#2 – Incorporate the current waivers into the regulations  
APA#3  – Charge for support staff who assist with issuing export certificates  
APA# 4 – Align one-hour minimum charge  
APA#5 – Align  hourly rates for the live animal and germplasm sectors  
6B - Policy proposals – Certification  Services  
APA# 6 – Charge  for changing the recognised agency on a Risk Management Programme  
APA# 7 – Recover costs  for halal-related services  
APA# 8 – Recover costs  for re -certification as a supplier for wild animals or game estates  
APA# 9 – Recover costs  for re -listing of further pet  food processors  
APA# 10 – Charge for additional time spent processing Official Assurances  (Non -Dairy)  
APA# 11 – Charge for minor amendments to a Risk Management Programme (Non -Dairy)  
APA# 12 – Recover costs for inspection and audit under the Animal Products Act 1999  
APA# 13 – Recover  costs  for the approval of a maintenance compound   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   59 6C - Policy proposals – Levies on animal products  
APA#14 – Charge for homekill and recreational catch service providers  
APA#15 – Establish a minimum charge for levies  
APA#16 – Require information to inform levies  
APA#17 – Increase annual charge for the Meat Industry Initiative Fund  
6D - Policy proposals – Verification Services  
APA#18 – Change the way programme charges are calculated and applied  
APA#19 – Remove annual charges  
APA#20 – Charge for establishing a full -time verification services presence  
APA#21 – Charge for non -verification functions  
APA#22 – Remove differentiation between veterinarian and non -veterinarian circuit verifiers  
APA#23 – Introduce new penal rates  
APA#2 4 – Revis e definition of penal rates  
6E - Policy proposals – Dairy industry  
APA#25 – Enhance charging approach for New Zealand standards, performance monitoring, 
export standards, market access and residue monitoring  
APA#26 – Introduce a new cost recovery method for i nfant formula exports  
APA#27 – Establish an identical Verification Services charging regime for dairy verification 
inspection and audit  
APA# 28 – Charge for minor amendments to a Risk Management Programme (Dairy)  
APA# 29 – Charge for additional time spent processing Official Assurances  (Dairy)  
APA#30 – Add waiver provisions to dairy industry fees and charges regulations  
 
Part 6A – Live animal and germplasm exports  
These proposals cover proposed changes to the cost recovery methods in Part 8 of the Animal 
Products (Fees, Charges, and Levies) Regulations 2007 . Proposed changes to the current rates 
are set out in the Appendices to this section.  
6.7 APA#1 – CHANGE THE METHOD OF CHARGING FOR NEGOTIA TING AND 
MAINTAINING MARKET A CCESS FOR THE LIVE A NIMAL AND GERMPLASM 
SECTORS  
6.7.1 Background  
MPI currently charges live animal or germplasm exporters using  an hourly rate fo r services 
associated with negotiating new market access  and maint aining market access under  Part 8 of 
the Animal Products (Fees, Charges, and Levies) Regulations 2007 . 
Using an hourly rate charge for the live animals sector was adopted  to encourage more 
efficient use of MPI’s services  by exporters. There are  currently  just under 400 export 
certificates in the live animal and germplasm sector . Maintenance of these certificates is a n 
onerous  task. The hourly rate charge for the live animals sector is intende d to encourage the 
sector  to maintain  only those protocols that are in regular use.   
60  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  Negotiating new market access and maintenance are regarded as  industry/club goods.  MPI’s 
policy for other sectors receiving similar  services is to recover the cost of these  services 
through  programme charges  and levies imposed on all operators in the s ector proportionate to 
output.  
MPI’s total expenditure f or providing regulatory and assurance functions to the  live animal 
and germplasm export sectors was $1.090 million in 2013/14.  
MPI’s direct hourly rate charges  for negotiating new market access  and maintenance 
generated revenue of $8,147  for 2013/14.  Unit fees generated revenue of $0.527 million for 
this period, covering all of the other regulatory and assurance services.  
6.7.2 Problem definition  
New market access and maintenance services for the live animal and germplasm sectors are 
being charged differently  from the way other exporting sectors  are charged for these same 
services . 
6.7.3 Proposed fee for negotiating and maintaining mark et access for the live animal and 
germplasm sectors  
MPI proposes to recover the costs of negotiating and maintaining market access as part of unit 
fees rather than hourly rate charges.   
The costs of negotiating and maintaining market access would be  incorporated into the unit 
fees in Part 8 of the Animal Products (Fees, Charges, and Levies) Regulations 2007 . Hourly 
rate 3 would be revoked under this approach.  
This would make the cost recovery approach for negotiating new market access and 
maintenance  consistent with th e treatment of  other export sectors . It would also reduce the 
administrative costs associated with time recording and invoicing systems for hourly rate 
charging.   
This option may,  however, be less transparent than the present approach and its adoption may 
create a risk of cross -subsidisation between export sectors and operators.  It could also 
undermine efficiency as it would not encourage  exporters to consider the costs and benefits of 
requesting MPI  assistance  for negotiating new market access and maintenance , potentially 
leading to costs progressively increasing over time because of demand -driven activity.  
Prioritisation of market  access and maintenance could  be a problem and MPI would need to 
work closely with all sectors to develop an appropriate response.  
6.7.4 Questions for consideration  
Question 6.7 
Do you prefer the current  hourly rate charging approach to negotiating and 
maintaining market access or would you prefer that the fees be incorporated into the 
relevant unit charges?  
 
6.8 APA#2 – INCORPORATE THE CURR ENT WAIVERS INTO THE  REGULATIONS  
6.8.1 Background   
MPI has issued seven in dividual waivers for unit fees for dog semen, queen bee attendants, 
fish eggs and larvae, non -commercial rodents for research and scientific purposes, non -
commercial rodent embryos for  research  and scientific purposes , compost worms, b irds other 
than wild -caught finches and wild -caught rosellas , and some consignments of livestock  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   61 exports. These waivers were issued in anticipation of their being incorporated into the 
regulations at the next review.  
6.8.2 Problem definition  
The waivers will be revoked when Part 8 of the Animal Product (Fees, Charges, and Levies) 
Regulations 2007 are amended.   
Options considered  include:  
 discontinuing the waivers;  
 re-issuing the waivers ; 
 amend ing the current regulations.  
6.8.3 Proposed maximum number of animals for which a fee is payable per live animal export 
consignment  
The proposal is to a mend Part 8 of the Animal Product (Fees, Charges, and Levies) 
Regulations 2007 to : 
 cap the per animal charge on livestock export consignments to a maximum of 5,000 
animals ; 
 change the cats and  dogs unit fee per semen straw to per semen consignment;  
 amend the ‘bee packages (excluding queen and bumble bees) (per kilogram)’ category to 
bee packages (excluding bumble bees  and including a queen bee if applicable) (per 
kilogram) ’; 
 amend the ‘queen be es and bumbles bees (other than packages) (per bee)’  category to 
‘queen bee (including a small number of attendant bees) or bumble bees (per queen or 
bumble bee) ’; 
 amend the ‘o ther animals and animals germplasm not specified (per animal, egg or straw) ’ 
category to ‘o ther animals and animals germplasm not spe cified (per consignment )’; 
 cap the per bird (other than wild -caught finches and wild -caught rosellas ) charge on 
consignments to a maximum of 30  birds. 
6.8.4 Questions for consideration  
Question 6.8 
Do you agree with incorporating these waivers into the regulations?  
 
6.9 APA#3  – CHARGE FOR SUPPORT S TAFF WHO ASSIST WITH ISSUING 
EXPORT CERTIFICATES  
6.9.1 Background  
As part of the process for issuing live animal and germplasm export certificates, MPI support 
staff prepare the paper export certificates that are issued by recognised persons. This is more 
cost-effective than having this work undertaken by recognised pers ons, and enables the latter 
to focus on technical matters instead of administration.  
6.9.2 Problem definition   
MPI can recover  costs only  for recognised persons that are involved in export certification 
and not support  staff  
Part 8 of the Animal Product (Fees,  Charges, and Levies) Regulations 2007 does not currently 
allow MPI to recover the costs of non -recognised persons involved in specialist functions and  
62  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  activities necessary for the export of live animals or germplasm. Consequently, MPI is under -
recovering the cost of these services, which does not support efficiency or equitability.  
6.9.3 Propos al to charge for support staff that assist with issuing export certificates  
MPI proposes to amend the wording of Part 8 of the Animal Product (Fees, Charges, and 
Levies) Regulations 2007 hourly rate 1 by deleting the words ‘recognised persons’. This 
would allow MPI to recover for time spent by all staff directly involved in undertaking 
functions and activities necessary for the export of live animals or germplasm.  
6.9.4 Question s for consideration  
Question 6.9 
Do you agree with the proposed method of charging for support staff that assist in 
issuing export certificates?  
 
6.10 APA# 4 – ALIGN ONE -HOUR MINIMUM CHARGE  
6.10.1  Background  
The current hourly rate charges in Part 8 of the Animal Product (Fees, Charges, and Levies) 
Regulations 2007  provide for MPI to charge in 15 -minute increments.  
6.10.2  Problem  definition  
Current hourly rates do not have a minimum  charge  
Charging for less than one hour of time is administratively inefficient. The costs of generating 
an invoice and processing this are disproportionately high compared to the revenue that would 
be recovered.  
6.10.3  Proposed one-hour minimum charge, with addi tional time after one hour chargeable in 
15-minute blocks  
MPI proposes that the hourly rate charges in Part 8 of the Animal Product (Fees, Charges, and 
Levies) Regulations 2007  have a one -hour minimum charge, with additional time after one 
hour chargeable in 15 -minute blocks.  
This proposal would align the charging approach for live animal export services with the 
charging approach taken in other cost -recovery areas under the Animal Products Act.  
MPI would still be able to issue cost recovery waivers in app ropriate cases or classes of cases.  
6.10.4  Questions for consideration  
Question 6.10 
What impact would a one -hour minimum charge for on -demand activities for the 
export of live animals or germplasm have on you or your business?  
 
6.11 APA#5 – ALIGN  HOURLY RATES FOR THE  LIVE ANIMAL AND GERM PLASM 
SECTORS  
6.11.1  Background  
Part 8 of the Animal Product (Fees, Charges, and Levies) Regulations 2007 include hourly 
charges for:   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   63  undertaking specialist functions and activities necessary for the export of live anima ls or 
germplasm;  
 services on behalf of an exporter to negotiate with the importing country alternative 
measures for meeting access requirements for overseas markets;  
 services on behalf of an exporter to negotiate new access requirements for overseas 
marke ts (except for exporters of cats and dogs).  
6.11.2  Problem  definition  
Different rates not efficient  
MPI has reviewed the current rates in Part 8 of the Animal Product (Fees, Charges, and 
Levies) Regulations 2007 . The costs recovery calculations for the different  services work out 
to similar rates. Having different rates for the same sector adds complexity and is not 
administratively efficient.  
MPI has considered two options:  
 Option 1: maintain status quo (two separate hourly rates);  
 Option 2: combine the hourly rates to make them uniform .  
6.11.3  Proposed updated hourly rates  
MPI proposes aligning all hourly rate charges  (1) and (2)  in Part 8 of the Animal Product 
(Fees, Charges, and Levies) Regulations 2007 to $186.30 . 
6.11.4  Questions for consideration  
Question 6.11 
Do you agree with the use of uniform rates for hourly charging of on -demand 
activities for the export of live animals or germplasm?   
64  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  Part 6B – Approvals and Certification  
6.12 APA# 6 – CHARGE  FOR CHANGING THE RECO GNISED AGENCY ON A RISK 
MANAGEMENT PROGRAMME  
6.12.1  Background  
MPI processes a pplications to change a recognised agency on a risk management programme  
under the Animal Products Act 1999 .  
6.12.2  Problem  definition  
Cost recovery has not yet been  implemented for MPI’s time spent processing a pplications to 
change a recognised agency on a risk management programme  under the Animal Products 
Act 1999.  
6.12.3  Proposed fees for changing a recognised agency  on a risk manag ement programme  
MPI proposes to e stablish new fixed fee  of $77.50 (based on half an hour)  and an hourly rate 
assessment c harge (in 15 -minute intervals after first half hour) in Part 1, Schedule 1, of the 
Animal Products (Fees, Charges and Levies) Regulatio ns 2007 for applications to change a 
recognised agency on a risk management programme  under the Animal Products Act 1999.  
Adoption of this proposal would be consistent with the treatment of other similar services and 
provide for closer matching of costs an d revenues for this service.  
6.12.4  Questions for consideration  
Question 6.12 
Do you agree with the proposed basis of charging for changing the recognised agency on 
a risk management plan?  
 
6.13 APA# 7 – RECOVER COSTS  FOR HALAL -RELATED SERVICES   
6.13.1  Background  
MPI provides a nu mber of services under the Animal Products  (Overseas Market Access 
Requirements for Halal Assurances) Notice 2013 . These services are a private good. Key 
functions provided include:  
 clause 10 (1)  –listing of approved halal premises;  
 clause 10 (4) – listing of approved halal organi sations;  
 clause 12 (1) (b) – audit and inspection of approved halal organisations, halal assessment 
and approval personnel and issuing officers;  
 clause 12 (1) (c) and (d) – approving, renewing or revoking an issuing office r’s approval;  
 clause 13 – issue of halal official assurances or halal attestations on a sanitary official 
assurance for product to be exported to any one or more of the markets;  
 clause 15 (4) – listing of halal assessment and approval personnel and issuing  officers;  
 clause 21 (3) – listing of competent halal slaughter persons . 
MPI also incurs a number of ‘industry good’ costs in relation to maintaining halal standards, 
compliance and systems audit and the supporting systems.   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   65 6.13.2  Problem  definition  
Cost recovery is yet to be implemented for the private good functions and services provided 
under the Animal Products (Overseas Market Access Requirements for Halal Assurances) 
Notice 2013. These costs should be recovered on the basis of an equitable appro ach to all 
sectors and encouraging users of MPI’s halal services to consider MPI’s costs when 
requesting services.  
Options  
There are three main options:  
 Option 1: maintain the status quo;  
 Option 2: implement hourly rate charging for private good services;  
 Option 3: implement hourly rate charging for private good services and impose a levy on 
halal output, approved halal premises or approved halal organi sations.  
For Options 2 and 3, hourly rate charging would be set with a fixed fee (based on one hour) 
and hourly rate assessment charge (in 15 -minute intervals) for time after the first hour. These 
rates would be consistent with other hourly and part -hour rates.  
Analysis  
Option 1 is not considered to be equitable, is inconsistent with the treatment of other se ctors, 
and does not support efficiency.  
Option 2 would improve equity, is consistent with the treatment of other sectors and would 
encourage users of MPI’s halal services to consider MPI’s costs and their demand for 
services. Under this option, halal servi ce users would not specifically be required to pay a 
share of industry good costs associated with the regime. Instead, these costs would be met 
through the levy on meat Schedule 2 of the Animal Products (Fees, Charges and Levies) 
Regulations 2007.  
Option 3  would resolve this issue by imposing a targeted levy. A levy on approved halal 
premises or approved halal organisations would not be equitable as costs would not be 
imposed in proportion to benefit in terms of output or sales volume. Ideally, a levy on ou tput 
or sales could be used, but obtaining and tracking this data would be difficult and impose 
additional collection and compliance costs that were disproportionately high relative to the 
costs that would be recovered.  
MPI’s preference is Option 2.  
6.13.3  Propos ed fees for halal-related services  
MPI proposes to implement a fixed fee of $155, based on one hour of time, plus hourly rate 
charges in 15 -minute increments after the first hour, in Part 1, Schedule 1, of the Animal 
Products (Fees, Charges and Levies) Reg ulations 2007 for the following services under the 
Animal Products (Overseas Market Access Requirements for Halal Assurances) Notice 2013.  
MPI also proposes that  the cost recovery revenue raised under  Schedule 2 of the Animal 
Products (Fees, Charges and Le vies) Regulations 2007 would cover halal official assurances 
or halal attestations . 
6.13.4  Questions for consideration  
Question 6.13 
What is your preferred method of cost  recovery for halal services?  
  
66  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  6.14 APA# 8 – RECOVER COSTS  FOR RE -CERTIFICATION AS A S UPPLIER FOR 
WILD ANIMALS OR GAME  ESTATES  
6.14.1  Background  
MPI processes  applications for re -certification as either a certified supplier (wild animals) or a 
certified game estate supplier under the Animal Products (Specifications for Products 
Intended for Human Consumption) Notice 20 13. This treatment is inconsistent with othe r 
sectors.  
6.14.2  Problem  definition  
Cost recovery is yet to be implemented for processing applications for re -certification as 
either a certified supplier (wild animals) or a certified game estate supplier under Animal 
Products (Specifications for Products Inten ded for Human Consumption) Notice 20 13 
6.14.3  Proposed fees for re -certification as a supplier for wild animals or game estates  
MPI proposes to establish  a new fixed fee (based on one hour) of $155 and hourly rate 
assessment charge (in 15 -minute intervals after t he first hour)  at $155 in Part 1, Schedule 1, of 
the Animal Products (Fees, Charges and Levies) Regulations 2007. The fee would cover  
processing  applications for re -certification as either a certified supplier (wild animals) or a 
certified game estate supp lier under Animal Products (Specifications for Products Intended 
for Human Consumption) Notice 2013.  
6.14.4  Questions for consideration  
Question 6.14 
What is your preferre d method of cost recovery for re -certification as a supplier for wild 
animals or game estates?  
 
6.15 APA# 9 – RECOVER COSTS  FOR RE -LISTING OF FURTHER PET  FOOD 
PROCESSORS  
6.15.1  Background   
Clause 69E of the Animal Products (Specifications for Product Intended for Animal 
Consumption) Notice 20 14 provides for the listing and re -listing of further pet food 
processors.   
6.15.2  Problem  definition  
Costs are not recoverable  for re -listing of further pet food processors  
Cost recovery for re -listing is not specifically provided for in the Animal Products (Fees, 
Charges and Levies) Regulations 2007. This is not equitable compared with cost recovery in 
other sectors.  
6.15.3  Proposed fees for re-listing pet food processors  
MPI proposes to establish  a new fixed fee (based on one hour) of $1 55 and hourly rate 
assessment charge (in 15 -minute intervals after the first hour)  of $155 for processing  
applications to re-list as a further pet food processor under c lause 69E of the Animal Products 
(Specifications for Product Intended for Animal Consum ption) Notice 20 14.  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   67 6.15.4  Questions for consideration  
Question 6.15 
What is your preferred method of cost recovery for applications to re -list as a further pet 
food proc essor?  
 
6.16 APA# 10 – CHARGE FOR ADDITIONAL  TIME SPENT PROCESSIN G OFFICIAL 
ASSURANCES  (NON -DAIRY)  
6.16.1  Background  
MPI currently recovers the costs associated with issuing official assurance s in accordance 
with Part 1, Schedule 1, of the Animal Products (Fees, Charges and Levies) Regulations 2007 
(the Regulations) using:  
 a fixed fee for official assurances issued under s ection 61;  
 a fixed fee and hourly rate charging after three  hours (up to a maximum of $1 ,000) for 
reissue of official assurance under s ection 64(2) if replacement assurance is demanded by 
the importing country . 
Charges  for some official assurances work performed by Verification Services staff based 
full-time at establishments are charged  in accord ance with Part 7 , Schedule 1, of the 
Regulations . No separate fee is charged for an export certificate issued concurrently with a 
billable Verification Services visit to the consigning premises.  
For live animals and germplasm, MPI charges live animal expor ters at the hourly rate 
specified in Hourly rate 1, Part 8 , Schedule 1, of the Regulations for performance of specialist 
functions and activities necessary for the export of live animals or germplasm . 
The costs of the Animal Products Electronic Export Cert ification System (AP E -Cert) are 
recovered under the usage charging formula prescribed in Regulations . 
 
At present a single fixed charge is applied to cover the official assurance process, calculated 
on the following basis:  
 
                 
                                             
                                        
                             
 
The current minimum fee  for the reissue of official assurance under s ection 64(2)  is based on  
the estimated direct and indir ect work required for a simple replacement request  that involv es 
no case -specific negotiation or consultation with the importing country . It takes, on average, 
at least  three hours to investigate, verify, and correct a problem that caused a replacement 
assurance to be demanded by an importing country . The rate is charged at the hourly rate 
specified in Part 2 of the Regulations . 
6.16.2  Problem  definition  
Fee for processing  official assuran ces does not vary with complexity of application  
MPI’s experience is that the time needed to process official assurances varies. S ome requests 
can be processed in a very short time (for example, when the market access requirements are 
straightforward and the documentation provided is complete), while other requests are 
complex a nd may require more time. Examples of more complicated requests include:   
68  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries   when market access requirements are complex, such as for live animals;  
 when the data and documentation provided are incomplete;  
 when it takes a significant amount of time to review an d confirm the accuracy of the 
submitted information.  
This variability should be reflected for equity and efficiency reasons in the charging 
methodology.  
Current approach is inequitable  
Applying a single charge to a service that requires varying amounts of  time does not support 
equity. Exporters that prepare complete and correct documentation and export to 
straightforward markets end up cross -subsidising other exporters  who provide incomplete 
data or export to complex markets.  
Current approach does not supp ort efficiency  
Applying a single charge to a service that requires varying amounts of time does not support 
efficient use of MPI’s resources and does not incentivise applicants to ensure their submitted 
information is complete and comprehensive at the time  of application. Not charging exporters 
for the true costs of following up on incomplete or incorrect data, or exporting to complex 
markets does not encourage exporters to make efficient choices that minimise the need for 
MPI’s services.  
6.16.3  Options  considered  
MPI has considered two options15: 
Option 1: maintain the s tatus quo  
 a fixed fee for issue of official assurance s; 
 a fixed fee and hourly rate charging approach for reissue.  
Option 2 : fixed and hourly rate charging  
 A fixed fee per certificate issued.  
 Hourly rate charging would start after the initial 15 minutes, and be charged in 15 -minute  
intervals thereafter . The hourly rate would be charged at:  
a. the assessment rate specified in Part 2 of the Animal Products (Fees, Charges and 
Levies) Regulations 2007 ; or  
b. for live animal and germplasm exports, Hourly rate 1, Part 8 , Schedule 1, of the 
Animal Products (Fees, Charges and Levies) Regulations 2007 . 
 Maintain the current fixed fee and hourly rate charging approach for reissue of official 
assurances under s ection 64(2) if replacement assurance is demanded by  the importing 
country.  
 Disbursements  would be  charged at actual  and reasonable  cost. 
6.16.4  Analysis of options  
Table 5 provides an analysis of two charging options.  
                                                
15 Costs include any accrued deficits or surpluses from the previous  four years but exclude  any costs allocated to the reissue charge .  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   69 Table 5: Charging options for Official Assurances  
Option  Analysis  
Option 1  This approach does not support equity and does not encourage efficient use of MPI’s  
resources, but provides greater certainty about certification costs for industry and MPI, and 
is administratively simpler for MPI.  
Option 2  
 This approach would improve equity between exporters and would encourage efficient use 
of MPI’s resources. It al so should enable the per certificate fee to be maintained at a lower 
level given that any more complex certificates are cost recovered via actual time spent on 
them.  
This option provides greater operational flexibility than Option 1. MPI could develop business 
rules for when an hourly charge would be charged, in addition to a fixed fee.  
Exporters would initially have less certainty about costs, but certainty would increase once 
their export schedule was better known and a track record of interaction was  established.  
6.16.5  Proposed fee for official assurances – Option 2  
MPI proposes to:  
1) Introduce a fixed fee ($32) and  hourly rate charging (after the initial 15 minutes , in 15 -
minute intervals),  for issue of official assurance s, with hourly rates charged at:  
a. the rate specified in Part 2 of the Animal Products (Fees, Charges and Levies) 
Regulations 2007  (proposed to increase to $155); or   
b. for live animal and germplasm exports, Hourly rate 1, Part 8 , Schedule 1, of the 
Animal Products (Fees, Charges and Levies) Reg ulations 2007  (proposed to increase 
to $186.30).  
2) Maintain  the current fixed fee and hourly rate charging approach for re -issue  of official 
assurances, with hourly rates charged at:  
a. the rate specified in Part 2 of the Animal Products (Fees, Charges and Levi es) 
Regulations 2007  (proposed to increase to $155); or   
b. for live animal and germplasm exports, hourly rate 1, Part 8 , Schedule 1, of the 
Animal Products (Fees, Charges and Levies) Regulations 2007 (proposed to increase to 
$186.30).  
3) Charge disbursements at actual and reasonable costs.  
6.16.6  Questions for consideration  
Question 6.16 
1) What is your preferred method of cost recovery for the issue of official assurances for 
non-dairy products?  
2) What is your preferred method of cost recovery for the reissue of official assuranc es for 
non-dairy products?  
 
6.17 APA# 11 – CHARGE FOR MINOR AME NDMENTS TO A RISK MA NAGEMENT 
PROGRAMME (NON -DAIRY)  
6.17.1  Background  
At present, MPI charges applications to amend a risk management programme under  section 
26 of  the Animal Products Act 1999 . Charges are a fixed fee  (based on one hour)  and an 
hourly rate assessment c harge (in 15 -minute intervals) for any time spent over the first hour.   
70  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  6.17.2  Problem definition  
Charging a full hour for a minor amendment to a risk management programme  under the 
Anim al Products Act 1999  is excessive, inequitable, does not support efficiency and is not 
justifiable.  
6.17.3  Proposed charge for minor amendments to a risk management programme  
MPI proposes to change the fixed fee  and hourly rate assessment c harge in Item 3, Part 1, 
Schedule 1, of the Animal Products (Fees, Charges and Levies) Regulations 2007 to a fixed 
fee (based on half an hour) of $77.5, plus an hourly assessment charge (pro rata in 15 -minute 
intervals  after the first half an hour) of $155 for applications to update a risk management 
programme under section 26 of  the Animal Products Act 1999 .  
This proposal will support equity, efficiency and justifiability.  
6.17.4  Questions for consideration  
Question 6.17 
What is your preferred method of cost recovery for minor updates to non-dairy risk 
management programmes?  
 
6.18 APA# 12 – RECOVER COSTS FOR IN SPECTION AND AUDIT U NDER THE 
ANIMAL PRODUCTS ACT 1999  
6.18.1  Background   
MPI’s Animal Product Off icers are empowered under the Animal Products Act 1999 to 
inspect and audit. These functions are considered a private good as:  
 The benefits can be attributed to a specific  beneficiary, or exacerbators16 (and are 
therefore excludable).  
 Performance of the fu nction for an individual will limit MPI’s ability to provide the 
function to another individual17.  
Inspection relates to site -specific or operator -specific inspection and audit for compliance 
with the Act, regulations and notices, rather than verification or systems audit.  
The Animal Products (Fees, Charges and Levies) Regulations 2007 do not currently provide 
for recovery of costs in exercising these functions.  
6.18.2  Problem  definition  
The Animal Products (Fees, Charges and Levies) Regulations 2007 do not enable  MPI to 
recover its costs in exercising these functions.  
6.18.3  Proposed cost recovery for inspection and audit  
MPI proposes to establish a charge of $155 per hour for cost recovery of inspection and audit 
under the Animal Products Act 1999.  
                                                
16 In plain English, this means “those individuals, or businesses, that create the risk ”. 
17The performance of such a function is often categorised as “rivalous” .  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   71 6.18.4  Questions for conside ration  
Question 6.18 
What is your preferred method of cost recovery for  compliance -related  inspection and 
audit services?  
 
6.19 APA# 13 – RECOVER  COSTS  FOR THE APPROVAL OF A MAINTENANCE 
COMPOUND  
6.19.1  Background   
At present, MPI charges applications to approve maintenance compounds under the Animal 
Products (Dairy Industry Fees and Charges Regulations) 2007.  
6.19.2  Problem  definition  
There is no provision under the Animal Products (Fe es, Charges and Levies regulations) 2007 
to cost recover approval of non -dairy maintenance compounds under the Animal Products 
Act. This leads to inconsistency of undertaking approvals between similar processes.  
6.19.3  Proposed charges for the approval of a maint enance compound  
MPI proposes to implement a fixed fee  of $77.50, based on a half -hour charge, plus an hourly 
assessment rate of $155, charged in 15 -minute increments  after the first half hour, in Part 1, 
Schedule 1, of the Animal Products (Fees, Charges an d Levies) Regulations 2007, for 
approval of maintenance compounds.  
This proposal will support equity, efficiency and justifiability.  
6.19.4  Questions for consideration  
Question 6.19 
What is your preferred method of cost recovery for the approval of non -dairy 
maintenance compounds ?  
72  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  Part 6C  – Levies, fees and charges on Animal Products  
6.20 APA#14 – CHARGE FOR HOMEKILL AND RECREATIONAL CAT CH SERVICE 
PROVIDERS  
6.20.1  Background  
A 2013 audit of homekill and recreational catch service providers listed under section 76 of 
the Animal Products Act 1999 showed widespread non -compliance with record -keeping 
requirements and poor knowledge of Animal Products Act requi rements for homekill and 
recreational catch services. Non -compliance creates a food safety risk that could have flow -on 
implications for human health and market access. These potential risks, if realised, would 
adversely affect compliant homekill and recre ational catch service providers, as well as the 
broader animal products sector.  
MPI intends to implement increased auditing of homekill and recreational catch service 
providers for compliance with record -keeping requirements under section 73(2)(b) of the 
Animal Products Act 1999.  
6.20.2  Problem  definition  
Costs to fund audit of homekill and recreational catch service provider compliance not 
recoverable  
Auditing of homekill and recreational catch service providers is not provided for by Crown 
appropriation, and is therefore cost recoverable.  
MPI’s view is that an audit programme is an industry good and should, therefore, be 
recovered as a levy. The primary exacerbators16 (homekill and recreational catch service 
providers) are an identifiable group and the benefits of the audit programme accrue to all 
homekill and recreational catch service providers.  
6.20.3  Proposed charge for homekill and recreational catch service provider compliance  
MPI proposes to establish an annual fixed fee of $100 in Schedule 2 of the Animal Products 
(Fees, Charges and Levies) Regulations 2007 for listed, or re -listed, homekill and recreational 
catch service providers under section 76 of the A nimal Products Act 1999. The fee would be 
payable on application for listing or re -listing.  
This proposal would provide funding to meet the costs of auditing homekill and recreational 
catch service providers for compliance with the Act.  
6.20.4  Questions for consi deration  
Question 6.20 
1) Do you agree with the proposed approach to cost recovery for the audit of homekill and 
recreation catch service providers?  
2) If not, what is your preferred method of cost recovery for this service?  
 
6.21 APA#15 – ESTABLISH A MINIMUM CHARGE FOR LEVIES  
6.21.1  Background  
MPI collects annual levies in Schedule 2 of the Animal Products (Fees, Charges, and Levies) 
Regulations 1999.   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   73 6.21.2  Problem  definition  
Levy on operators with small throughput is inefficient  
MPI has identified that imposing a levy based on throughput on very small operators would 
raise a very small amount of revenue that would be insufficient to meet the cost of the 
services provided. MPI is conce rned that the transaction and administrative costs of collecting 
this revenue for MPI and operators is disproportionate to the amount of revenue raised and, 
therefore, inefficient.  
Two options to address this issue have been identified:  
 Option 1 ─ impose a  minimum charge for operators that process less than a minimum 
level;  
 Option 2 ─ exempt small operators who fall below a minimum level of charges and 
recover the revenue from operators whose liability exceeds the minimum level.  
MPI’s preference is Option 1 , on the basis of administrative efficiency and more equitable 
treatment of all operators. Option 1 is considered more equitable as small processors impose 
costs on, and receive benefits from, MPI’s standards and performance monitoring services. 
These bene fits exceed their small share of product throughput, such as through requests for 
guidance on standards and through the development of policies to address their unique 
challenges. The average costs for standards development and guidance and performance 
monitoring for large processors are lower than for smaller processors, as large processors 
produce much  greater volume of product throughput.  
Option 2 is not considered equitable as larger operators would be required to meet costs 
brought about by smaller pro cessors. This does not encourage smaller operators to make 
efficient use of MPI’s services.  
6.21.3  Proposed minimum charge for levies  
MPI proposes that there should be a minimum charge for levies.  
Processors that process less than the minimum level would be liab le to pay the minimum 
charge. Processors that process over the minimum level would continue to be charged at the 
relevant levy rate.  
6.21.4  Questions for consideration  
Question 6.21 
1) Do you agree with the concept of a minimum charge for levies?  
2) What do you consider to be a suitable level for any minimum charge for levies?  
 
6.22 APA#16 – REQUIRE INFORMATION TO INFORM LEVIES  
6.22.1  Background  
Schedule 2 of the Animal Products (Fees, Charges, and Levies) Regulations 2007 imposes 
levies on a range of sectors to fund standards development.  
MPI uses information from processors ( Table 6) about their commodity processing to 
calculate the levies.  
  
74  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  Table 6: Information requirements for MPI commodity levies under the APA  
Commodity  Information to be provided to MPI  
Fish and bivalve molluscan shellfish  Estimate of tonnes to be processed for the next year which is 
reconciled at the end of each year; and/or provide actual data 
on tonnes processed for the previous month.  
Lambs, bobby calves, goats  
Sheep  
Pigs 
Cattle, horses  
Deer  Actual head processed for previous month, in individual 
commodity categories listed.  
Ostriches, emus  
Poultry  Actual birds processed for the previous month, in individual 
commodity categories listed.  
6.22.2  Problem  definition  
The requirement to provide information is not regulated  
MPI currently collects information from processors, who provide it on a voluntary basis. 
There is concern that some processors do not provide data in a timely fashion, which can 
undermine the integrity of  the data set used to calculate levies, and potentially result in 
inaccurate levies being calculated. This in turn impairs the equity and efficiency of data 
collection and levying, and does not accord with the principles of justifiability and 
transparency.  
Options  
There are two main options:  
 Option 1: maintain the status quo;  
 Option 2: require processors to provide the information.  
MPI’s preferred option is Option 2 , as it will result in more accurate, justifiable and 
transparent levies and more equitable and efficient cost recovery.  
6.22.3  Proposed information requirements  
MPI proposes to require information from animal commodity processors as laid out in  Table 
6. The change would be implemented through either regulation or notice.  
This change would support more accurate calculation of levies, and is more justifiable, 
transparent, equitable and efficient.  
6.22.4  Questions for consideration  
Question 6.22 
1) Do you agree that processors should be required to provide commodity processing 
information to the Ministry on a timely basis?  
2) If not, what is your preferred approach for collection of this i nformation by the 
Ministry?  
  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   75 6.23 APA#17 – INCREASE ANNUAL CHAR GE FOR THE MEAT INDU STRY 
INITIATIVE FUND  
6.23.1  Background  
Standards and risk assessment measures under the Animal Products Act require a scientific 
basis, especially when MPI is required to negotiate acc ess to overseas markets based on food 
safety measures in place in New Zealand. Levies of one cent per lamb equivalent for each 
lamb, bobby calf, sheep or cattle beast slaughtered and dressed are put towards the cost of this 
research, insofar as it relates to products from these animals.  
In practice, this research is managed through the Meat Industry Initiative Fund. Decisions 
about priorities for research funding are made following discussions between MPI and 
industry representatives.  
6.23.2  Problem  definition  
Insufficient funding for important meat -related research projects  
The Meat Industry Association (MIA) has identified research in certain areas that it considers 
would benefit the industry should additional research funding become available. In particular, 
its members wish to enter into a seven -year partnership research agreement through the Meat 
Industry Initiative Fund that may see the industry contribution matched by government funds. 
The projects would include work on increasing the quality and shelf -life o f chilled meat, 
addressing food safety issues relating to adoption of more efficient processing techniques, and 
research into ways to prevent bacterial contamination.  
6.23.3  Proposed increase to research levy  
Increase research contribution by 1.5 cents per lamb e quivalent  
The MIA has proposed that the research contribution should be increased from one cent per 
lamb equivalent to up to 2.5 cents per lamb equivalent. It has made this proposal before 
seeing the proposed schedule of fees set out in Appendix 5 (see sec tion 6.41, Schedule 2 – 
levies for the existing and proposed levy amounts.)  
6.23.4  Questions for consideration  
Question  6.23 
1) Do you agree with the proposal to increase the contribution to research?  
2) Do you support a contribution to research of 2.5 cents per lamb equivalent, or would 
you prefer a different rate?  
  
76  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  Part 6D  –Verification Services  
6.24 APA#18 – CHANGE THE WAY PROGR AMME CHARGES ARE CAL CULATED 
AND APPLIED  
6.24.1  Background  
Verification Services is internationally recognised as providing a high standard of 
verification. Maintaining this high standar d assists in promoting New  Zealand’s good 
reputation with trading partners.  
Part 7 of the Animal Products (Fees, Charges, and Levies) Regulations 2007  provides for MPI 
to charge a basic charge in addition to an hourly charge. The basic charge is often call ed a 
‘programme charge’ because it is based on MPI’s indirect costs of providing verification 
services. The hourly rate is calculated by attributing Verification Services’ indirect costs to 
establishment and circuit activity areas and then dividing the att ributed amount for each area 
by the number of billable hours for each area.  
Fish processors  and operators of cool stores are currently charged a reduced frontline hourly 
rate and do not pay the basic hourly rate , in accordance with historical NZFSA cost re covery 
policy settings. They do , however , pay annual licence fees by way of a pro rata monthly 
invoice.  
6.24.2  Problem  definition  
MPI has reviewed the historical approach to calculating and recovering the indirect costs of 
providing verification services followin g the merger of the predecessor agencies. The current 
approach does not recognise that Verification Services  management , operational and technical  
overhead and corporate overhead costs support the overall business and verification system 
delivery and integ rity, rather than  individual sectors . To this end, underlying indirect costs are 
the same for both circuit and establishment services, and staff require the same level of 
support, training and input, irrespective of which type of activity model they suppor t. 
Options  
MPI has considered two options  for allocating overhead costs:  
 Option 1: maintain the status quo – separate programme charges for establishment and 
circuit ; 
 Option 2: introduce a single combined  programme charge  for establishment and circuit 
verification activity.  
Analysis of options  
In Option 1, costs are attributed to establishment and circuit activity based on a cost allocation 
model. Analysis has show that the cost attribution is inequitable as costs are not proportionate 
to the amount of time spent at establishments and circuits. The cost attribution method does 
not encourage efficient use of MPI’s services as it does not reflect marginal cost pricing18 or 
the strong correlation between costs and the level of use.  
Option 2 would establish a  single combined  programme charge  rate for establishment and 
circuit verification activity , which would then be billed at an hourly rate. This approach would 
result in a more equitable and efficient share of indirect costs. The cost share would be based 
on billable time at an establishment or circuit operator, rather than historical costs attribution.  
                                                
18 The cost of providing an additional unit of service.   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   77 The single combined programme charge for establishment and circuit verification recognises 
that Verification Services is now part of MPI, and operating under a new structure and cost 
recovery approach. It also positions Verification Services for potential changes in circuit and 
establishment resourcing, particularly around market access. MPI continues to negotiate  (with 
the European Union and other markets) for  the removal of the requirement for a full -time 
verifier presence at establishments. The new cost recovery approach will, in the short term, 
more appropriately allocate underlying business operating costs;  and in the long term will 
ensure that MPI is well positioned should there be a shift to more hours spent on a circuit 
basis , rather than full time establishment presence.  
The combined approach  would focus discussion on the level of Verification Services costs on 
how Verification Services delivers its business, rather than how costs relate to the different 
sectors.  Such a d istinction  is arbitrary and does not recognise that Verification Services  
management  operational and technical  overhead and corporate overhead costs support the 
overall  Verification Services  business and the verification system  integrity , rather than 
individual specific sectors . Many of the sectors verified by MPI are also inter-dependent  in 
terms of system integrity , reflecting the inter -related nature of the industry  ─ for example , 
meat processors transact with pet  food, rendering, hides, skins, cool  stores and transport 
operators.  
Focusing on the level of Verification Services indirect costs and how Verification Services 
delivers its business , rather than how costs relate to the diff erent sectors, is more transparent 
and will enable more informed efficiency discussions . The combined approach is also 
consistent with the way that the hourly rate is calculated for approval, accreditations, 
registrations and recognition functions.  
6.24.3  Proposed change to the way the programme charge is calculated  
MPI proposes to amend Part 7 of the Animal Products (Fees, Charges, and Levies) 
Regulations 2007  to establish a single basic charge rate for circuit and establishment.  
Each operator would be cha rged at a basic charge rate based on the number of billable hours 
MPI spends at the establishment. This approach would result in a fairer and more equitable 
attribution of costs and support more efficient use of MPI’s resources by all users. This would 
also assist MPI to maintain a high standard of verification to maintain New Zealand’s good 
reputation as a safe exporter of food, and reflect the integrated nature of the sector.  
6.24.4  Questions for consideration  
Question 6.24 
1) Do you agree with  the concept of a single  charg ing rate  for establishment and circuit 
verification activity?  
2) If not, what is your preferred approach?  
 
6.25 APA#19 – REMOVE ANNUAL CHARGE S FOR CERTAIN SECTOR S 
6.25.1  Background   
Clause 2 C in Schedule 1, Part 7, of the Animal Products (Fees, Charges and Levies) 
Regulations 2007 charges the industry sectors associated with processing fish and operators of 
cool stores and other storage premises a reduced hourly frontli ne rate and waives the basic 
hourly programme charge rate. These sectors instead pay an annual charge through a pro rata 
monthly invoice:  
 cool stores  or other storage premises : $1,100 a year;   
78  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries   primary processing of fish  other than bivalve molluscan shellfish : $549  a year;  
 primary processing of bivalve molluscan shellfish: $1 ,547 a year .  
6.25.2  Problem  definition  
Annual charge s are inequitable  
Applying an annual charge to a subset of sectors is inconsistent and inequitable. Annual 
charges also result in inequitable outcomes within a sector as all operators are charged the 
same annual charge, yet the size of the operators, and therefore the benefit they receive, may 
vary significantly. It is likely that larger operators are paying a disproportionately smal l share, 
while smaller operators pay a larger share.  
6.25.3  Proposed removal of the annual charge  
Removing the annual charge for certain circuit sectors  
The annual charge for the c old stores , dry store s, shellfish  and w et fish sectors would be 
removed from Part 7  of the Animal Products (Fees, Charges, and Levies) Regulations 2007 . 
These sectors would instead be invoiced at the basic charge rate.  
This change  will improve equity for different operators within each of the sectors currently 
paying an annual charge and  promote consistent treatment between sectors.  
6.25.4  Questions for consideration  
Question 6.25 
1) Do you agree with the proposed adoption of a basic charge instead of specific annual 
charges for cool  stores or other storage premises, fish and bilvalve molluscan 
shellfish?  
2) If you do not agree, what is your preferred fee structure?  
 
6.26 APA#20 – CHARGE FOR ESTABLISH ING A FULL -TIME VERIFICATION 
SERVICES PRESENCE  
6.26.1  Background  
Part 7 of the Animal Products (Fees, Charges, and Levies) Regulations 2007  enables MPI to 
recover its costs in disestablishing a full -time presence at an establishment. The costs that can 
be recovered, up to a maximum of $55,000, are:  
 the actual cost of tr ansfer or relocation;  
 the actual cost of retraining;  
 the actual cost of the matters specified in paragraphs (a) and (b), if both are applicable; or  
 the lesser of — 
- the actual  cost of redundancy;  
- an amount  calculated  using  a formula  (in the regulations).  
Part 7 does not prescribe the approach that MPI must follow in recovering its costs in 
establishing a permanent Verification Services presence at locations.  
6.26.2  Problem  definition  
Part 7  does not contain an express provision enabling  MPI to recover its costs in establishing 
a permanent Verification Services presence at locations.  
The current approach is inconsistent with that taken for disestablishing a full -time presence.   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   79 6.26.3  Proposed charges for establishing a full -time verification ser vices presence  
MPI is proposing to amend Part 7 of the Animal Products (Fees, Charges, and Levies) 
Regulations 2007 to provide for recovery of the actual and reasonable costs associated with 
establishing a full -time Verification Services presence at an est ablishment.  
MPI proposes that the costs include, but not be limited to, the following:  
 capital items, including:  
- computer terminals, monitors and printers;  
- office furniture and storage;  
- phones;  
- technical equipment.  
 operating expenses, including:  
- recruitment;  
- costs associated with transfer or relocation;  
- induction and training, including salary;  
- new health and safety equipment;  
- new folders, stationery and lockable cupboards;  
- inspection stamps, and reject and hold tags.  
The proposal will support tr ansparency and is consistent with the approach for establishing a 
full-time presence at new and restarting airports prescribed under the Airports Act 2014.  
6.26.4  Questions for consideration  
Question 6.26 
1) Do you agree with the proposed method of cost recovery for establishment of fulltime 
verification services presence at an establishment?  
2) If you do not agree, what is your preferred method of cost recovery?  
 
6.27 APA#21 – CHARGE FOR NON -VERIFICATION FUNCTIO NS 
6.27.1  Background  
Verification Services is recognised and accredited as a source of technical expertise on food 
safety. Operators are increasingly requesting non -verification advice  about food processing 
and related activitie s. 
6.27.2  Problem  definition  
MPI Verification Services cannot recover costs for non -verification functions  
The current regulations do not provide for Verification Services charging for the provision of 
services that are not strictly verification functions under the Animal Products Act.  
The absence of the ability to recover for non -core verification and certification services 
inhibits the ability of Verification Services to provide advisory, or added value, services to 
new and existing stakeholders where the time commitment is significant and would reduce the 
total level of billable hours available.   
80  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  6.27.3  Proposed charges for non -verification functions  
MPI proposes that Part 7 of the Animal Products (Fees, Charges, and Levies) Regulations 
2007 be amended to allow MPI Ve rification Services to recover the costs of non-verification 
delivery functions and services it provides to operators. Costs would be recovered at the 
hourly rates set for circuits on a case by case basis in agreement with the stakeholder.  
6.27.4  Questions for co nsideration  
Question 6.27 
1) Do you agree with the proposed approach for cost recovery of non -verification 
services provided by Verification Services?  
2) Should this be funded through levies instead?  
 
6.28 APA#22 – REMOVE DIFFERENTIATI ON BETWEEN VETERINAR IAN AND NON -
VETERINARIAN CIRCUIT  VERIFIERS  
6.28.1  Background  
Circuit v erification activities are  carried out by both veterinary technical supervisors and 
travelling technical s uperv isors (non -veterinarian). Veterinarian and non -veterinarian verifiers 
are trained almost identically by MPI and complete identical tasks , except for certain 
specialist tasks required to be undertaken by a veterinarian . The major difference between the 
two types of verifier is that some markets accept  only animal or plant product that has been 
verified , and received an official assurance,  as safe for consumption by a government 
veterinarian . 
Verification Services’ regional teams  are made up of  a mix of veter inarian and non -
veterinarian verifiers. The current cost recovery regulations differentiate between veterinarian 
and non -veterinarian verifiers  but the  charging rates are for the two types of verifier are 
identical.  
6.28.2  Problem  definition  
Differentiating betwe en veterinarian and non -veterinarian verifiers is administratively 
complex, inefficient and does not support flexibility . 
Differentiat ing between veterinarian and non -veterinarian verifiers adds administrative 
complex ity and inefficien cy as it requires MPI to operate  two parallel invoicing systems.  For 
users of the service, there do not appear to be any equity or efficiency benefits  from 
differentiating between v eterinarian and non -veterinarian verifiers , as the charges for both are 
ident ical. 
6.28.3  Proposed uniform charging basis for veterinarian and non -veterinarian circuit verifiers  
MPI proposes to remove the differentiation in the c ircuit  charging regime between 
veterinarian and non -veterinarian verifiers  in Part 7, Schedule 1 of the Animal Products (Fees, 
Charges, and Levies) Regulation 2007. The regulations would instead contain a single 
charging rate for circuit verifiers. This change would reduce administrative complexity for 
MPI without affecting equity or efficiency.  
6.28.4  Questions for consi deration  
Question 6.28 
Do you agree with the proposal to remove the distinction between veterinarian and 
non-veterinarian circuit verifiers?   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   81  
6.29 APA#23 – INTRODUCE NEW PENAL RATES  
6.29.1  Background  
MPI's collective agreemen t for Verification Services staff includes a new penal rate of twice 
the regular hourly rate (T2.0 or penal rate 2.0). The additional rate was introduced as a fair 
and sensible means of compensating staff who are required to start work very early in the da y 
or work very late. This rate replaces an allowance and is paid pro rata on actual time worked 
before or after a set time.  
6.29.2  Problem  definition  
Prescribed p enal rates are inconsistent with MPI’s collective agreement with verifier s. 
Part 7, Schedule 1, Note 3 of the Animal Products (Fees, Charges, and Levies) Regulations 
2007 does not contain a penal rate (twice the regular hourly rate) to align with MPI's 
collective agreement for Verification Services. This is causing MPI to incur costs that it 
cannot recover.  
6.29.3  Proposed penal rates  
MPI proposes to create a new penal rate (twice the regular hourly rate) in Part 7, Schedule 1, 
Note 3 of the Animal Products (Fees, Charges, and Levies) Regulations 2007 and insert new 
penal rate (currently SV Penal T2 $118.99  per hour and MV penal T2 $110.35 per hour) in 
relevant penal rates for veterinary verifier and supervising veterinary verifier.  
6.29.4  Questions for consideration  
Question 6.29 
What impact will the introduction of additional penal rates have on your business?  
 
6.30 APA#2 4 – REVIS E DEFINITION OF PENAL R ATES  
6.30.1  Background  
The definition of penal time in Part 7, Schedule 1, N ote 3 of the Animal Products (Fees, 
Charges, and Levies) Regulations 2007 currently refers to hours worked by a verifier for 
which the verifier is entitled, by his or her contract of employment, to penal rates, being hours 
(other than overtime) worked with in a 40 -hour week on a Saturday, Sunday or statutory 
holiday s. 
6.30.2  Problem  definition  
Prescribed definition of penal rate is inconsistent with practice  
The definition of penal rate is inconsistent with how it is being applied to both the collective 
and individ ual employment agreements for Verification Services staff.  
6.30.3  Revise the definition of penal rate  
MPI proposes to amend the definition of penal time in Part 7, Schedule 1, Note 3 of the 
Animal Products (Fees, Charges, and Levies) Regulations 2007 to refer to Monday to Sunday 
instead of the current Saturday, Sunday or statutory holiday s.   
82  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  6.30.4  Questions for consideration  
Question 6.30 
Do you agree with the proposal to redefine the applicability of penal rates?   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   83 Part 6 E – Dairy industry fees and charges  
6.31 APA#25 – ENHANCE CHARGING APP ROACH FOR NEW ZEALAND 
STANDARDS, PERFORMAN CE MONITORING, EXPOR T STANDARDS, 
MARKET ACCESS AND RE SIDUE MONITORING  
6.31.1  Background  
New Zealand and export standards  and performance monitoring  
MPI charges for the development and maintenance of New Zealand standards and export 
standards , as well as performance monitoring19, through : 
 a quarterly specified fee to lar ge dairy processing businesses;  
 a small annual flat fee to each registered manufacturing premises receiving  less than 
316,000 k ilograms  of raw mil k solids.  
While not stated in the regulations, the quarterly specified fee to large dairy processing 
businesses (for provision of New Zealand and export standards and performance monitoring) 
is based on a business’s share of total raw milk solids received,  using the data that was 
available at the time the regulations were set. Market shares for raw milk solids serve as a 
proxy for the individual benefits derived, and costs incurred, from New Zealand and export 
standards and performance monitoring.  
The small annual flat fee to registered manufacturing premises is based on attributing a small 
share  of costs to the smaller manufacturing premises (higher than their share of total milk 
solids received at the time regulations were set) and dividing by the number of these premises . 
Market access programme  and the National Chemical Contaminants Programme 
(NCCP)  
MPI charges for market access activities and the NCCP through : 
 a quarterly specifi ed fee to Fonterra;  
 a small annual flat fee to  all other exporters.  
While not stated in the re gulations , the shares  paid by Fonterra for each service were based on 
former Ministry for Agriculture and Forestry estimate s of the benefits to Fonterra from 
market access functions  and the NCCP respectively . The small annual flat fee s for each 
service  are then calculated ba sed on dividing the remaining share of costs amongst other dairy 
exporters.  
6.31.2  Problem  definition  
Prescribing levies in regulations can be inequitable , inefficient  and lack transparency  
Prescribed levies20 that are specific to individual bu sinesses become less transparent and 
equitable between cost recovery reviews, as actual market shares change. With changes in 
market shares, the levies no longer reflect, as closely as practicable , the benefits received from 
                                                
19 Performance monitoring refers to systems  performance monitoring and management and excludes approvals and 
verification inspection and audit fees (see section 6.39, Appendix 3 for more info rmation).  
20 In the current dairy regulations, the charges for domestic and export standards, performance monitoring, dairy residue 
monitoring and market access standards are referred to as fees. In the new dairy regulations, the charges will be referred to  
levies. There will be no difference in economic terms given the levies proposed are still specific total charges (as opposed to 
a per unit levy). The change to levies is in accordance with the 2008 Office of the Auditor General guidelines on Charging 
Fees for Public Sector Goods and Services. According to the guidelines, charges should be imposed through a levy when 
charges will apply to a certain group such as industry participants for carrying out a particular function.   
84  Consultation Paper on Proposed Revisions to the Cos t Recovery Regime  Ministry for Primary Industries  services delivered . For both standards development and performance monitoring, there are 
several large processors that should be paying a higher amount than the small processors’ levy 
based on their current share of raw milk solids received.  
In addition, if there are any c hanges to the list of businesses that operate as large processors 
between cost recovery reviews, MPI is required to seek an ad hoc  change to the regulations to 
incorporate these , which is administratively inefficient.  
Domestic producers and consumers are not contributing to the costs of the NCCP  
The dairy residue programme, or NCCP, is currently charged to Fonterra, as the primary 
exporter, and to other smaller exporters. However, the programme has benefits for both export 
and domestic market participants  that use New Zealand milk. The costs of the programme 
should, therefore, be met by all dairy processors that use New Zealand milk, rather than just 
dairy exporters. The cost of the levies could then potentially flow through to all beneficiaries, 
as proces sors pass on their costs.  
Export standards mixed  in with charges for New Zealand  standards  
Export standards and New Zealand standards are currently being charged as a single expense 
to dairy processors. This has efficiency benefits, but there is an equity trade -off as charges are 
not necessarily targeted to businesses that benefit from the different services. Domestic -only 
processors are being charged for export standards, whereas dairy exporters who import their 
milk ingredients or  dairy products do not fa ce any costs for export standards. MPI is seeking 
to find a better balance between efficiency and equity for the cost recovery of export 
standards.  
Need for reliable data to inform levies  
There is a need to have reliable data source s to inform the calcula tion of levies  to large dairy 
processors  and exporters . Until now , charges have been based on public ly available 
information  that is incomplete and not always up -to-date.  
6.31.3  Proposed separation of levy for New Zealand standards development from levy for 
expo rt standards  
MPI proposes that the service of developing and maintaining New Zealand standards be 
levied separately from the service of developing and maintaining export standards.  
Rationale for the proposal  
Levies for these services should be targeted at the businesses that directly benefit from them. 
Both domestic processors and exporters benefit from New Zealand standards, which form the 
base requirements for all dairy products produced in New Zealand. Cost s for New Zealand 
standards should, therefore, continue to be recovered from processors. However, levies for 
export standards should be paid by exporters, who are the primary beneficiaries of export 
standards development. Market access activities benefit exporters and charges are paid by 
exporters, so no change of approach is required for this area.  
6.31.4  Proposed levy on all processors for the National Chemical Contaminants Programme  
MPI proposes that the dairy residue monitoring service (or NCCP) be charged to all dairy 
processors instead of dairy product exporters.  
Rationale for the proposal  
Levies for this service should be targeted at the businesses that directly benefit from it. 
Domestic dairy processors, domestic consumers, exporters and overseas consumers benefit 
strongly from the testing of raw milk,  colostrum and dairy products. They also benefit from 
the assurance that the regulatory framework is being applied correctly. By l evying all dairy  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   85 processors, the costs for the NCCP will likely flow through to exporters and domestic 
customers, as processors pass costs downstream.  
A small proportion of costs and activities of the NCCP are specifically focused on export 
product require ments, namely an independent verification programme and testing for 
radionuclides. However, there are spill -over benefits to domestic producers inasmuch as the 
levels of radionuclides in milk are a marker for the entire dairy industry.  
6.31.5  Proposed annual lev y, on a time -benefit basis, for small processors that collect raw milk 
solids to recover the cost of New Zealand standards, performance monitoring and dairy 
residue monitoring  
The Ministry proposes to change which small processors are levied, and how small  processors 
are levied. This proposal builds on the proposals  6.31.3  and 6.31.4 . 
Which  ‘small processors’  would be levied  
The Ministry proposes to change the small processors it levies  (currently charged through  fees 
for unnamed processors in the regulations)  from businesses with manufacturing risk 
management programmes, base d on the number of manufacturing premises they have, to 
businesses with a farm dairy risk management programme ─ that is, businesses that collect 
raw milk solids and colostrum.  
The new definition of small processors would be ‘persons  with a farm dairy ris k management 
programme that are:  
 not collection agents (that is, they do not buy milk solids from a dairy farmer); or  
 collection agents that collected less than, or equal to, 491,000 kilograms21 of raw milk 
solids directly (not through another collection a gent)  in the previous financial year’.  
The definition of a  ‘collection agent ’ is:  
 a dairy processor whose business includes buying milk solids from a dairy farmer; or  
 a person whose business includes buying milk solids from a dairy farmer for supply 
directly or indirectly to a dairy processor.  
The threshold of 491,000 kilograms separates those who would pay less than, or equal to, the 
small processors’ levy from those (large processors) who would pay more, based on their 
share of total raw milk solids col lection (see section 6.31.6 ). The threshold w ould be updated 
in future cost recovery reviews.  
MPI w ould include a provision in the regulations (under sections 118(3)(e) and 119) imposing 
a requirement on collection agen ts to keep levies for MPI’s cost recovery purposes in a 
separate trust account to avoid any confusion between the levy for MPI’s cost recovery and 
the price of raw milk charged by collection agents to processing businesses.  
How small processors would be le vied 
MPI proposes to move to an annual levy based on a n estimate of the average hours of service 
provided to  small processors . The levy amount  would be comparable to what small processors 
are currently paying through annual fees (fees for unnamed processor s in the regulations).  
MPI also proposes that th e annual levy would be combined to cover New Zealand standard 
setting, performance monitoring and residue monitoring.  
The minimum levy would be based on six hours of time at the standard MPI food sector 
hourly rate, covering one hour of New Zealand standard setting, one hour of performance 
                                                
21 Determined by dividing the small  processors’ levy amount by the total amount to collect from processors and multiplying it 
by the total milk solids collection in 2013/14.   
86  Consultation Paper on Proposed Revisions to the Cos t Recovery Regime  Ministry for Primary Industries  monitoring and four hours of dairy residue monitoring. Based on operational experience,  six 
hours of service per small processor is considered a conservative estimate . If each of these 
small dairy processors receive d six hours of service  for New Zealand standards development , 
residue monitoring  and performance monitoring, that would equate  in total to roughly seven  
weeks’ full -time equivalent work for one MPI staff member , or 1.3 percent  of total cost 
recovery for New Zealand standards, performance monitoring and residue monitoring.  
Based on the proposed standard MPI food safety  hourly rate of $155, each small processor 
would pay $930 a year in total for New Zealand standards development, performance 
monitoring and residue monitoring services. For a new registration, a farm dairy RMP holder 
would be charged a share of the annual levy based on the quarter of the year in which the 
registration is approved.  
Table 7 shows the estimated total costs to be recovered from small processors. There are an  
estimated 48 small processors (as defined above, 58 ‘persons’ with farm dairy risk 
management programmes, m inus 10 who collected more than 491,000 kg of milk solids in the 
previous financial year).  
Table 7: Estimated  recovery from small processors in 2015/16 . 
 New Zealand 
Standards  Performance 
Monitoring  Residue 
monitoring  Total  
MPI flat levy 
proposed $  155 
(1 hour)  155 
(1 hour)  620 
(4 hours)  930 
(6 hours)   
Total to be 
recovered from (48) 
small processors $  7,440  7,440  29,760  44,640  
 
Rationale for the proposal  
Under the APA, the criteria that must be taken into account when determining the most 
appropriate method of cost recovery, as far as is reasonably practicable, are equity, 
transparency, efficiency and justifiability (section 113(2)  of the APA ). The  proposal meets 
these criteria:  
 Equity  ─ Small processors impose costs on , and receive benefits from, MPI’s standards, 
performance monitoring and dairy residue monitoring services that exceed their small 
share of  raw milk solids. These benefits include requests for guidance on standards and 
the development of policies to addres s their unique challenges. In contrast, large 
processors offer economies of scale for the amount of guidance MPI provides them.  By 
levying farm dairy risk management programme holders, the levy would target all raw 
milk solids for processing and hence all who benefit from New Zealand standards 
development, residue monitoring and compliance monitoring, not just those processors 
who operate under a manufacturing risk management programme. Farmers or collection 
agents should be able to pass costs onto their pr ocessing customers. Levying individual 
businesses, rather than RMPs, recognises that the acquisition of additional RMPs does not 
generally increase guidance costs to the business because the information is transferable 
within the business.  
 Efficiency  ─ Having one levy will reduce administration costs.  
 Transparency  ─The levy is linked to a n estimate of the average hours of service 
provision to small processors. Although there will be one levy, MPI will still consult on 
the total amount to recover for New Zealand standards, performance monitoring and 
residue monitoring respectively.   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   87  Justifiability ─ The levy for each small processor would be set in the regulations and 
updated with cost recovery reviews. The proposed levy is reasonable for the provision of 
New Zealand standards, performance monitoring and dairy residue monitoring services to 
small processors . 
Other optio ns considered  
Two additional methods of calculating a levy  have been considered , based on : 
 Share of total costs  proportionate to actual share of milk solids – MPI believes a rough 
estimate of actual hours of service is more justifiable because small operators impose a 
disproportionately higher service cost.  
 Imposing the levy on manufacturing risk management progra mme holders  – MPI 
believes that this approach is less equitable than the proposed approach.  
6.31.6  Proposed lev ies to large processors in the regulations for New Zealand standards, 
performance monitoring and residue monitoring  
The Ministry proposes to formalise t he definition for a ‘large processor’ in the regulations and 
change the way large processors are levied. MPI proposes that the regulations would set out a 
formula to determine the amount for each large processor to pay, rather than having a 
specified sum t o be paid in the regulations. This proposal builds on the proposals  6.31.3 , 
6.31.4 , and 6.31.5 . 
Proposed definition of ‘large processor’  
Large processor s would be defined as ‘persons  with a farm dairy risk management 
programme th at are collection agents , and  who collected more than 491,000 k ilograms  of 
milk solids from dairy farmers directly ( that is, not through another collection agent) in the 
previous financial year22. The milk solid threshold of 491,000 k ilograms  for large processors 
captures tho se processors that would pay more than the minimum levy based on their share of 
total raw milk solids collection. The threshold w ould be updated as part of each future cost 
recovery review .  
MPI has chosen to define large processors using the ‘collection agent’ (see section 6.31.5 ) 
conce pt from the Commodity (Milk Solids) Levy Order 2009. This is to ensure that MPI can 
use the data that DairyNZ collects for the milk solids levy for cost recovery purposes, rather 
than directly requesting the amount of milk solids ‘received’ by each processor . 
This definition above will recognise the effect of other legislation affecting the industry, such 
as the Dairy Industry Restructuring Act 2001 (DIRA).  Fonterra would  be able to pass on cost 
recovery charges to other processing businesses that it collects milk on behalf of. In this case , 
Fonterra is collecting the milk but not receiving the milk in terms of delivery.  
MPI would  include a provision in the regulations (under sections 118(3)(e) and 119) imposing 
a requirement to keep levies for MPI’s cost recovery purposes in a separate trust account . This 
separate trust account would  avoid any confusion between the levy f or MPI’s cost recovery 
and the price of raw milk solids charged by Fonterra or other collection agents to other 
processing businesses23. 
                                                
22 In the case of businesses that have subsidiaries, MPI is proposing that their raw milk solids collection would be a ttributed 
to their parent company where appropriate.  
23 It will be up to processing businesses to determine if they are paying a fair share of the collection agent’s cost recovery 
levies.   
88  Consultation Paper on Proposed Revisions to the Cos t Recovery Regime  Ministry for Primary Industries  Updating who is a large processor  
There are ten businesses with farm dairy risk management programmes that collected mor e 
than 491,000 kilograms of raw milk solids in 2013/14, namely: Fonterra, Open Country 
Dairy, Westland, Synlait, Miraka, Tatua, Gardians, Fresha Valley, Green Valley Dairies and 
Dairy Goat.  
Proposed d ata sources  
MPI proposes to insert into the regulations  that DairyNZ must supply MPI with its  data on 
businesses’ milk solids collection for the previous financial year (by month) as soon as the 
data is available , for cost recovery purposes (under section 118  (3)(d) of the Animal Products 
Act).  
MPI would also  put into the regulations or in a notice (under section  159 of the Animal 
Products Act)  that the Director -General MPI may require collectors of raw milk solids to 
provide MPI with their milk solids collection data  for the previous MPI financial year . MPI 
also proposes to a put a requirement into the regulations  or in a notice that non -cow dairy 
processors meeting the large processor threshold must provide their raw milk solids collection 
data for the previous MPI financial year directly to MPI.  
Proposed for mula for calculating levies  
MPI is proposing a single  formula to calculate what large processors will be required to pay 
for New Zealand standards, performance monitoring and residue monitoring. As per current 
cost recovery charges, the annual levy would be paid in equal quarterly instalments.  
The proposed f ormula for the regulations for New Zealand standards, performance 
monitoring and residue monitoring is as follows:  
C          vy        g            “ X
: 
               
                                 
            
Where,  
            = amount of levy to be paid by a large processor.  
 C          = amount to recover for year from large processors, which equates to the total cost to 
recover for the year,  to cover the cost of New Zealand standards, performance  monitoring and 
residue monitoring minus  the amount expected to be collected from minimum levies from 
small processors for these services . 
The va lue for the component in the formula ‘Amount to recover for year from large 
proces sors for New Zealand standard s, performance monitoring  and dairy residue monitoring’ 
would be set in the regulations as $3,420,089.  To change the value for the component, there 
would be need to be an amendment to the regulations.  
                 = each large processor’s milk total solids collection for the previous year . 
             total milk  solids collected for the previous year from all large processors . 
Large  processors would pay the ‘small processors’ levy in the case that the formula produces 
a levy lower than  the ‘small proce ssors’ levy . 
Proposed process for notifying payments to be made by large processors  
After the end of each MPI financial year (July to June), the Director -General MPI would 
determine each large processor’s milk solids collection for the previous year and total milk  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   89 solids collected for the previous year from large processors . MPI would then invoice each 
processor for its levy, indicating its milk solids collection for the previous year and the to tal 
milk solids collected from large processors in the previous year. Individual businesses’ 
amounts payable would remain confidential between MPI and the business.  This process 
would likely occur in August as this is when the data would become available f rom DairyNZ.  
Proposed approach to accommodate new large processors and exiting processors  
The regulations would accommodate new large processors, changes in the names or business 
structures of existing large processors and processors exiting the market as  follows:  
 Businesses that cross the threshold (because they have increased production volume) from 
small to large processors during the financial year in question would pay the levy for 
small processors until the next annual determination by the Director -General of  each large 
processor’s milk solids collection for the previous year and total milk solids collected for 
the previous year from large processors.  
 Levies on new processors that cross the threshold as a result of mergers or acquisitions 
would be ass essed on the basis of the  combined  market share of any predecessor 
business es. 
 Large processors that do not have full -year milk solids data for the previous year would 
have their full -year milk solids collection estimated by interpolating their monthly data, 
with adjustments to other businesses’ market share data if necessary.  
 If a large processor exited the market during the year,  its obligation to pay charges would 
apply only up to and including the quarter that it exits the market .  
In normal circumst ances, under -recoveries or over -recoveries resulting from changes in the 
industry  structure  would be dealt with through annual adjustments  within MPI.  
Rationale for the proposal  
The proposal meets the criteria under the APA  as follows :  
 Equity  ─ Annual lin king of levies paid by individual large processors to their raw milk 
market shares would mean that funding is sourced from the beneficiaries at a level 
commensurate with the benefit  derived  from the service.  Collection agents should be able 
to pass on cost s to the processors they supply.  
 Transparency  ─ Costs would be allocated closely to service provision for the recovery 
period in which the service is provided as processors will be levied on the basis of their 
previous year’s market shares. Although there would be a single  levy, MPI would still 
consult o n the individual amount to recover for the provision of New Zealand standards, 
performance monitoring and residue monitoring . 
 Efficiency  ─ Annual updates to which businesses pay for the levies would mean there 
is less chance of under -recovery of costs shou ld a large processor leave the market. 
Having a single levy will reduce administration costs. Using data from DairyNZ will 
avoid large processors having to provide their milk solids data to more than one party, 
to ensure data consistency.  
 Justifiability ─  The total cost recovery amount  to be recovered from large processors 
would be set in the regulations and updated with cost recovery reviews. The proposed 
costs to be collected are reasonable for the provision New Zealand standards, 
performance monitoring a nd dairy residue monitoring service s to large processors . 
 
Calculations  
Based on the information available at this time, MPI has estimated the  total number of large 
processors (Table 8), and  the total amount to be recovered from larger processors  (Table 9).  
90  Consultation Paper on Proposed Revisions to the Cos t Recovery Regime  Ministry for Primary Industries  Table 8: Milk solids threshold for large processors  
 New Zealand standards, performance 
monitoring and residue monitoring  
Total amount to recover per annum $  3,464,729  
Minimum annual levy to small 
processors $  930 
Milk solids collection forecast for 
2014/15 (previous year for 201 3/14) 
(kg) 1,827,389,274  
Estimated milk solid threshold for 
large processors for 2015/16 (kg)  491,000  
Total estimated number of large 
processors  10 
 
Table 9: Estimated recovery from large processors  
 New Zealand 
standards  Performance 
monitoring  Dairy residue 
monitoring  Total  
Total amount to be 
recovered $  729,424 686,968 2,048,336 3,464,728 
Total amount to be 
recovered from 
small processors $  7,440  7,440  29,760  44,640  
Total to be 
recovered from 
large processors $  721,984  2,040,896  657,208  3,420,089  
 
Other options considered  
Three additional methods of calculating a levy  have been considered , based on : 
 A formula linked to expected shares of milk solid collected  – This would require 
greater reconciliation at the end of each financial year and would, therefore, be less 
efficient and provide a less certain outcome for processors.  
 An annual levy rate for milk  solids collected  ─ The levy would be a set rate per 
kilogram of raw milk solids collected, based on forecast milk solids production . With this 
approach there  is the potential for MPI to be under -resourced if actual milk solids 
production is less than fore cast. In addition, if MPI  invoiced on the basis of quarterly 
production , there would be uneven payments throughout the year , given variances in milk 
production.  
 A formula linked to raw milk solids received  ─ Levies would be charged to businesses 
with a man ufacturing risk management programme that received greater than or equal to 
491,000 kilograms  of raw milk solids in the previous financial year . This approach is 
considered less efficient than the MPI proposal because MPI would not be able to use data 
from  DairyNZ, and would need to request data from processors directly.  
6.31.7  Proposed levy on small exporters, on a time -benefit basis, for market access and export 
standards development  
The Ministry proposes to define ‘small exporters’, and to change how small exp orters are 
levied.   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   91 Proposed definition of small exporters  
MPI proposes to define small exporters as registered exporters that  exported less than or equal 
to 636,000 kilograms of dairy products in the previous financial year. The export threshold24 
of 636,00 0 kilograms (Table 11) separates those who would pay less than or equal to the 
small exporters’ levy from those who would pay more (large exporters), b ased on their share 
of total dairy export mass . 
How small exporters would be levied   
MPI proposes to move to an annual levy based on a n estimate of the average hours of service 
received by small  exporters , similar to what small exporters are currently payi ng in fees for 
market access and then adding on costs for export standards.  
Each small exporter would pay $310 a year in total for market access and export standards 
development services. The levy is based on the standard MPI food sector hourly rate of $1 55, 
with one hour for market access and one hour for export standards. For a new registration, an 
exporter that exports dairy products will be charged a share of the annual levy based on the 
quarter of the year in which the registration is approved . 
Table 10 shows the total estimated  amount to be  recover ed from small exporters. There are an 
estimated 61 9 small  exporters ─ that is, registered exporters who exported less than or equal 
to 636 ,000 kilograms of dairy products in the previous financial year (643 registered exporters 
that export dairy products minus 24 exporters that exported more than 636,000 kilogra ms of 
dairy products in the previous financial year).  
Table 10: Estimated r ecovery from small exporters  
 Market access and export  standards  
Total number of small exporters  619 
MPI flat levy proposed $  310 
Total to be recovered from small exporters $  191,890  
 
Rationale for the proposal  
This proposal  follows the same rationale as that for the proposal for small processors in 
section 6.31.5 . 
Other options considered  
Two other option s were considered , based on:  
 Share of export volume , or value , above actual share  – MPI would continue to base the 
levy on a set percentage of total costs, such as 1%, which would then be averaged across 
small exporters.  MPI believes that an estimate of average hours of service is more 
justifiable than assigning a proportion of total cost to small exporters that is unrelated to 
the actual percentage of export volumes, or values, they account for.  
 Actual share of  export  value or  volume ─ Small exporters receive benefits and impose 
higher costs than would be cost recovered based on their small share of exports, so the 
levy would not be equitable.  It would also result in very small lev ies to some exporters 
that would be inefficient to administer.  
                                                
24 The threshold for exporters was determined by dividing the small ex porters’ levy amount by the total amount to collect 
from exporters and multiplying it by the total export mass of dairy products in 2013/14.  
  
92  Consultation Paper on Proposed Revisions to the Cos t Recovery Regime  Ministry for Primary Industries  6.31.8  Proposed levy formula for large exporters in the regulations for market access and 
export standards development  
The Ministry proposes to define large exporters and change the way large exporters are levied 
─ that is, the  regulations would set out a formula to determine the amount for each large 
exporter to pay based on export mass (in kilograms).  
Proposed definition of ‘large exporter’  
Large exporters would be defined as registered exporters and other persons25 who export ed 
more than 636 ,000 kilograms of dairy products in the previous financial year26. The export 
mass threshold for large exporters captures those registered exporters who would pay more 
than the small exporters’ levy based on their share of the total export m ass of dairy exports.  
In the Ministry’s view, export mass is the best proxy of benefit that exporters get from the 
market access programme and export standards development.  
Proposed data source  
It is possible for MPI to obtain export mass data by business  from  the New Zealand  Customs 
Service for the purposes of cost recovery , provided it does not  subsequently disclose the data . 
There are some practical probl ems with using export mass data:  
 Some dairy products, such as milk and ice cream, are measured in li tres rat her than 
kilograms. These litre quantities  will need to be converted to kilograms. MPI would use a 
basic conversion factor for milk and ice crea m to convert it into kilograms.  
 Data on export mass comes from the New Zealand Customs Service under tar iff codes. 
MPI proposes to use a ‘core’ set of tariff codes to calculate export mass data for dairy 
products (see below). These codes do not cover dairy products that are exempt from Parts 
2 to 4 of the Animal Products Act such as confectionery.  The codes also do not include 
categories where non -dairy products are likely to form a large proportion of exports under 
them.  
The export mass data from the New Zealand Customs Service would come from the following 
core set of tariff codes:  
 all codes under 04.01 Mil k and cream, not concentrated nor containing added sugar or 
other sweetening matter ; 
 all codes under 04.02 Milk and cream, concentrated or containing added sugar or other 
sweetening matter ; 
 all codes under 04.03 Buttermilk, curdled milk and cream, yogurt, kephir and other 
fermented or acidified milk and cream, whether or not concentrated or containing added 
sugar or other sweetening matter or flavoured or containing added fruit, nuts or cocoa ; 
 all codes under 04.04 Whey, whether or not concentrated or containing added sugar or 
other sweetening matter; products consisting of natural milk constituents, whether or not 
containing added sugar or other sweetening matter, not elsewhere specified or included ; 
 all codes under 04.05 Butter and other fats and oils  derived from milk , and  dairy spreads ; 
 all codes under 04.06 Cheese and curd ; 
 35.01 Casein, caseinates and other casein derivatives , and  casein glues ; 
 35.02.20.00 00C: Milk albumin, including concentrates of two or more whey proteins ; 
 21.05 Ice cream and other edible ice, whether or not containing cocoa ; 
                                                
25 This is to take account of businesses that export animal products that are not registered exporters. They are ab le to export 
by employing the services of a registered exporter . 
26 In the case of businesses that have subsidiaries, MPI is proposing that their export volumes would be attributed to their 
parent company where appropriate.   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   93  19.01.10.09.00C and 1901.90.09.28B: cove ring infant formula, follow -on formula and 
supplementary food for young children and adult nutritional powders ; 
 1702.11.00 00F: containing by weight 99 percent  or mo re lactose, expressed as anhydrous 
lactos e, calculated on the dry matter;  
 1702.19.00 00B: containing by weight 99 percent  or more lactose, expressed as anhydrous 
lactose, calculated on the dry matter and Other . 
 21.06.10.09.00J: Protein concentrates and tex tured protein substances – Other (non -
vegetable protein) . 
Proposed formula for calculating levies  
The proposed formula for market access and export standards services for large exporters  
is as follows : 
C          vy        g           “Y
 , 
              
                                 
            
Where,  
           = amount of levy to be paid by a large exporter.  
  C          = amount to recover for year from large exporters, which equates to the total cost to  
recover by MPI for the year for market access and export standards services minus  the 
amount expected to be collected from minimum charges for these services  (Table 12). 
                = each large exporter’s dairy export mass for the previous year . 
             total dairy export mass for the previous year from all large exporters [from New 
Zealand Custom s Service data]  e.g. 2,969 million kg in 2013/14.  
The va lue for the component in the formula ‘Amount to recover for year from large exporters 
for export and market access standards’ would be set in the regulations as $1,258,824 . To 
change the value for thi s component, there would be need to be an amendment to the 
regulations.  
Large exporters would pay the ‘small exporters’ levy in the case that the formula produces a 
levy amount lower than the small exporters levy.  
Proposed process for notifying payments to be made by large exporters  
After the end of each MPI financial year (July to June), the Director -General MPI would 
determine each large exporter ’s export mass of dairy products for the previous year and the 
total dairy export mass for all large exporter s for the previous year. MPI would then invoice 
each exporter its levy, indicating its dairy export mass for the previous year and the total dairy 
export mass from large exporter s in the previous year. Individual businesses’ amounts 
payable would therefore  remain confidential between MPI and the business.  This process 
would occur in September as this is when the data would become available from the New 
Zealand Customs Service.  
Calculations  
Based on the information availabl e at this time, MPI has calculated the threshold for large 
exporters (Table 11), and the total amount to be recovered from large exporters ( Table 12).  
94  Consultation Paper on Proposed Revisions to the Cos t Recovery Regime  Ministry for Primary Industries  Table 11: Export mass threshold for large exporters  
 Market access and 
export standards  
Total amount to recover ($)  1,450,714 
Minimum charge( $) 310 
Estimated total export mass for 2013/14 
from Statistics New Zealand,
 (million kg)  2,978 
Export mass threshold for large 
processors (kg)  636,000  
Total estimated number of large 
exporters  24 
 
Table 12: Total amount to be recovered from  large exporters  
 Market access 
standards  Export standards  Total  
Total amount to be 
recovered  ($) 947,672  503,041  1,450, 714 
Total amount to be 
recovered from small 
exporters ($) 95,945  95,945  191,890  
Total to be recovered from 
large exporters ($) 851,727  407,096  1,258,824  
 
Other options considered  
MPI considered the other broad cost recovery options discussed under New Zealand 
standards, performance monitoring, and residue monitoring , section  6.31.5 . 
A formula based on market shares for the previous MPI financial year is considered more 
efficient, equitable, justifiable and transparent than the alternative recovery options for the 
same r easons as presented for New Zealand standards, performance monitoring and residue 
monitoring. In addition, adopting an approach that is consistent with New Zealand standard 
setting, performance monitoring and residue monitoring will help to create some eco nomies 
of scale in administration costs for MPI  and, potentially , for dairy processors and exporters. In 
our view, there is no compelling reason to vary the underlying approach between the two 
charging regimes.  
MPI co nsidered two alternative approaches, as  briefly discussed below:  
 Raw milk solids collection of export -orientated processors  – Levy large export 
processors  that collect more than a certain threshold of raw milk solids to be processed 
primarily for the export market  in the previous financial year . An approach based on 
collected milk solids is less equitable because the levy will, in part, be based on  raw milk 
solids destined for the domestic market. Furthermore, the associated costs to the 
processors may be passed onto domestic producers and consumers , who  do not directly 
benefit from market access or export standard s. Our view is that the proposal to levy large 
exporters on dairy export mass is more equitable than levying large export -orientated 
processors based on raw milk solids collection,  and there is little difference in efficiency .  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   95  Export value  – The approach would use a similar formula to that given above for export 
mass, but would substitute ‘dairy export value’ for ‘dairy export mass’ . Many other 
factors come into export returns by va lue, such as the type of product exported and the 
level of value -adding. The benefit of market access and export standards is more related to 
the quantity of product exported than to the financial returns made from exports . With 
export values there would b e no need to make conversions into one unit of measurement , 
as the data for each tariff code would be in dollars, although it would still be necessary to 
obtain data from the New Zealand Customs  Service . In our view, the proposal to levy 
large exporters on  the basis of export mass is more equitable than levying them on the 
basis of export value and there is little difference in efficiency  
6.31.9  Impacts of the proposals  
Overall  impacts  
In total, cost recovery for New Zealand standards development, market access and export 
standards development, dairy residue monitoring and performance monitoring is proposed to 
increase by  26 percent over charges for 2014/15 .  
Overall, this increase in costs would be borne by large and small processors. Costs to 
processors would i ncrease by 87  percent  given the proposal to shift the cost burden for dairy 
residue monitoring from dairy exporters to dairy processors and given increases in service 
provision for dairy residue monitoring and performance monitoring. However, dairy 
process ors should be in a position to pass a share of their costs onto their domestic and export 
customers.  
Overall direct  costs to exporters would decrease by 29  percent  as the cost burden for dairy 
residue monitoring is proposed to be shifted from them to dairy  processors and there is a 
small decrease in the costs for export standards development.  
Small processors  
The levies proposed for small processors are significantly higher than current charges. The 
additional cost is primarily due to their new contribution  to dairy residue monitoring, which is 
the most costly of the four major MPI se rvices charged to the industry.  
The estimated increase in total costs to small processors is in the order of $4 42 a year , which 
is significant in terms of percentage growth ( 91 percent  increase).  
As a result of the proposal, there would also be some changes in who pays the small 
processors levy. Some farm dairy risk management programme  operators are farmers and 
collection agents rather than manufacturers. However, these farmers should be able to pass a 
share of their costs onto the manufacturers they supply. By targeting farm dairy risk 
management programme  operators, costs should be borne by manufacturers operating under a 
Food Safety Programme or a risk management programme  and ultimately their customers.  
As there are fewer farm dairy risk management programme  operators than manufacturing risk 
management premises , the total recovered from small processors would increase only by 14  
percent  overall.  
Small exporters  
These parties  would pay less directly  as their levy for dairy residue monitoring is shifted to 
dairy processors, although costs are likely to flow through to them from dairy processors. The 
estimated decrease in total costs to small exporters is in the order of $ 358 a year, which is 
significant in terms of a percentage change to the cost (a decrease of about 54 percent ).   
96  Consultation Paper on Proposed Revisions to the Cos t Recovery Regime  Ministry for Primary Industries  Large processors  
Large processors w ould be required to pay more, as their overall contributions to residue 
monitoring, performance monitoring and New Zealand standards are brought in line with their 
current market shares, as they begin to contribute to dairy residue monitoring and given 
increas es in service provision for residue monitoring and performance monitoring.  
Large exporters  
Some large exporters w ould be required to pay more as their overall contributions to market 
access and export standards are brought into line with their market share s, although some 
other large exporters will pay less as total costs to exporters decrease.  
6.31.10  Questions for consideration  
Question 6.31 
1) Do you support the proposal for  annual levies to small processors and exporters  to be 
set on a fixed fee basis ?  
2) If not, what is your preferred approach for cost recovery from small processors and 
exporters and what  are the  reasons  for this preference ? 
3) Do you support MPI’s proposal to u se formulae to set levies for large dairy processors 
and large dairy exporters?  
4) If not, what is your preferred approach for cost recovery from large dairy processors 
and exporters, and what are your reasons for this preference ? 
5) Do you support the levies t o large processors and exporters being invoiced to them to 
help keep their share of milk solids collection and export mass confidential?  
6) Do you support the use of ‘core’ tariff codes to determine which products will be 
subject to the proposed  levies on  dairy product exports?  
 
6.32 APA#26 – INTRODUCE A NEW COST  RECOVERY METHOD FOR INFANT 
FORMULA EXPORTS  
6.32.1  Background  
In June 2013 the Minister for Food Safety announced an infant formula work programme to 
strengthen New Zealand’s food assurance systems to match the rapid growth in infant formula 
exports. In December 2013, the Government inquiry into the Whey Protein Concentrate 
Contamination Incident recommended that this work programme be prioritised, and that 
requirements on exporters of infant formula be strengthe ned to support traceability of export 
products.  
As part of the infant formula work programme, MPI is developing new requirements for 
infant formula products and formulated supplementary foods for young children (hereafter 
referred to generically as ‘infant  formula’) intended for export. The requirements include:  
 Export declarations must be made to MPI in the MPI E -cert system for all export 
consignments of infant formula to any market. Exports that already require official 
assurances are exempt from this re quirement.  
 Eligibility documentation must be available in MPI’s E -cert system for all exports of 
infant formula to any market (except to Australia). Currently, eligibility documentation is 
required only for markets that require official assurances from MPI . 
 Exporters and risk management programme operators handling infant formula can be 
subject to audit by MPI to ensure they are meeting their obligations.   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   97 These requirements are to be set out in a notice made under section 60 of the Animal Products 
Act (here after called ‘the notice’). Final decisions on the introduction of the notice have yet to 
be made at the time this consultation document was published. However, as cost recovery is 
integral to the implementation of the new provisions, it is important that consultation on cost 
recovery for these provisions is included in this consultation paper.  
The objective of introducing the new requirements for infant formula exporters is to improve 
MPI’s ability to monitor exports of this sensitive product, provide for more efficient product 
identification and withdrawal, and improve exporter compliance with duties and obligations.27 
Exporters w ill need to  have access to MPI’s E -cert system in order to apply for official 
assurances and submit export declaration forms for approval by MPI’s Dairy Certification 
Unit.  
6.32.2  Problem  definition  
The new requirements outlined above will create new activities and costs for industry, 
verifiers and MPI. The new activities are:  
 verification by Recognised Agencies of infant formula manuf acturers’ and stores’ 
compliance with the notice;  
 use of E -cert by exporters to submit export declaration forms;  
 processing of export declaration forms by MPI staff;  
 auditing by MPI of infant formula exporters.  
Verification  
Verification by Recognised Agenc ies of infant formula manufacturers’ and stores’ 
compliance with the notice can be included as part of performance based verification (PBV) 
and recovered directly by Recognised Agencies from operators.  
E-cert and export declarations  
Additional mechanisms a re needed to enable recovery of costs associated with use of E -cert 
for submission of export declaration forms, their processing by MPI staff, and auditing of 
infant formula exporters by MPI.  
Audits  
Our intention is that decisions on implementation of the audit provisions of the proposed 
notice would be made following review of the implementation of the o ther provisions of the 
notice. As such, a cost recovery mechanism for infant formula exporters is not proposed at 
this time. Cost recovery proposals for au dits of infant formula exporters would be contained 
in future reviews of the Animal Products (D airy Industry F ees and Charges ) Regulations . 
Apportion ing costs for verification and E -cert and export declarations  
It is the Ministry’s view that the costs of these activities should be recovered from RMP 
operators and exporters handling infant formula.   
It is appropriate that the costs of these proposals are borne by individual exporters that are 
exporting infant formula products , and formulated su pplementary foods for young children , to 
markets that do not require official assurances. Currently, such exporters are ‘risk 
exacerbators’, in so far as their export activities are associated with increased risk for New 
Zealand’s reputation as a result of  a lack of close monitoring . This is  contrast to products 
destined to markets that require official assurances of infant formula. The export declaration 
requirement is intended to reduce the risks presented by these export activities and so it is 
appropria te that costs of reducing that risk are borne by those that create it. The benefits from 
                                                
27 Primarily under section 51 of the Animal Products Act 1999.   
98  Consultation Paper on Proposed Revisions to the Cos t Recovery Regime  Ministry for Primary Industries  being able to export infant formula products and a strong reputation for New Zealand’s dairy 
products also primarily accrue to exporters , meaning that  it is a private good.  
6.32.3  Proposed recovery of  the costs of maintaining MPI’s electronic certification systems (E -
cert)  
The costs of maintaining and managing MPI’s E -cert system are met by users of those 
systems. The notice would require all infant formula exporters to have a ccess to, and to use E -
cert when exporting infant formula products or formulated supplementary foods for young 
children.  
There is an existing formula and charging mechanism in the Animal Products (Dairy Industry 
Fees and Charges) Regulations 2007 (Part 1A ) that we intend to employ to recover these 
costs. The values in the formula are specified in the Animal Products Notice: Electronic 
Certification System Costs – Dairy Industry, issued on 7 October 2014.  
We estimate that, at the current rate, the cost of E -cert maintenance will be less than $50 per 
year for almost all infant formula exporters.  Users would be invoiced monthly. However, 
consistent with MPI’s current administrative arrangements, invoices for less than $50 would 
be withheld until they reach $50 , or until the end of the financial year, whichever comes first.  
6.32.4  Proposed recovery of  the costs of MPI staff time to process export declarations  
The notice would require infant formula exporters to submit an export declaration form in E -
cert (a ‘health certificate’) for every consignment exported to a market that does not require 
official assurances from MPI for that product. The export declaration  forms must be approved 
in E-cert by an authorised user before the consignment is shipped.  
The notice contains provisions for exporters to apply to the Director -General for ‘auto -
approval rights’ for export declarations if they meet certain criteria, whic h means that a MPI 
staff member would not have to process the export declarations. Exporters with auto -approval 
rights would therefore not be subject to a fee to recover costs for MPI staff time to process 
export declarations. These exporters would still b e subject to fees for maintaining MPI’s E -
cert system (as detailed above).  
For those exporters that do not have ‘auto approval rights’ for export declarations, the MPI 
Dairy Certification Unit would likely have responsibility for assessing and approving e xport 
declaration forms. The costs of resourcing the assessment and approval of the forms would 
have to be recovered from users.  
We have identified two potential cost recovery mechanisms:  
 Option 1: formula -based fee for users per declaration (MPI’s propo sal); or  
 Option 2: fixed fee for users per declaration.  
Option 1: Formula -based fee for users  
A formula would be inserted into the regulations, with the fee set each year by notice in 
accord with the  formula in the regulations.  
The formula in the first y ear would be:  
                                         v        
                       
                              
 
  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   99 The formula in subsequent years would be:  
                       v     y                 v        
   v     y                   
                              
 
Where:  
Approval costs  are the costs of staff time processing and approving export declarations in a 
given year including overhead costs.  
Total number of export declarations raised  is the number of export declarations raised i n E-
cert by all infant formula exporters in a given year.  
At the start of the first year, the estimated values for approval costs  and total number of 
export declarations raised  would be fixed by Notice made under s117(4A) and 167(1)(ma) of 
the Animal Produ cts Act. In subsequent years, the previous year’s values for approval costs  
and total number of export declarations raised  would be fixed at the start of the year by the 
same type of Notice.  
The charge would be invoiced monthly, to align with invoicing for  the use of E -cert. 
Setting the notice(s)  
The process for issuing the notices to set the relevant fees under the regulation would need to 
comply with the requirements in the following sections of the Animal Products Act:  
 Section 113 requires consultation a nd consideration of cost recovery principles.  
 Section 115 requires the notices to be set prior to the financial year unless industry 
substantially agrees to values set.  
 Sections 117, 167 (1) (ma) and 167 (3) – enable issuing of notices.  
 Sections 163 and 164 provide for consultation . 
 
Option 2: Fixed fee for users  
Option 2 is to introduce a new fee in the regulations for an export declaration that takes a 
similar approach to the fee for an official assurance in the Animal Products (Dairy Industry 
Fees and Charges) Regulations 2007.  Like the current official assurances fee, the export 
declaration fee would include a component to cover MPI staff cost and overhead costs.  The 
fixed fee component for an export declaration is estimated at around $1 6 to $26 per ex port 
declaration form submitted, in contrast to the current f ixed fee for official assurance of $36.  
There are a number of reasons why the cost would be less than  for an official assurance:  
 MPI staff would not need to check compliance with overseas market access requirements, 
so the time spent on each export declaration would be substantially less than for an 
official assurance.  
 The export declaration may not need to be printed, because it may be accessible to 
verifiers online.  
 Even if it did need to be pri nted, it would not require secure paper.  
The fixed fee would be invoiced monthly to align with invoicing for the use of E -cert. 
Analysis  of options  
MPI considers that Option 1 is more efficient and transparent than Option 2. The formula 
would allow MPI to adjust charges to reflect current costs and so ensure costs are allocated as 
closely as practicable to service provision for the recovery period in which the service is  
100  Consultation Paper on Proposed Revisions to the Cos t Recovery Regime  Ministry for Primary Industries  provided. Option 2 would be more consistent with the charging mechanism for official 
assurances.  
6.32.5  Questions for consideration  
Question 6.32 
1) Do you support the proposed method of calculating charges for uses of MPI’s Dairy E -
cert system?  
2) If not, what i s your preferred option for cost recovery of export declarations, and what 
are the reasons for this preference?  
 
6.33 APA#27 – ESTABLISH AN IDENTIC AL VERIFICATION SERV ICES CHARGING 
REGIME FOR DAIRY VER IFICATION INSPECTION  AND AUDIT  
6.33.1  Background  
Part 1 of the Schedule in the Animal Products (Dairy Industry Fees and Charges)  Regulations  
2007 provides for MPI to charge an hourly rate for dairy verification inspection and audit. 
Verification Services provides verification for dairy cold stores and some highly tech nical 
processing plants. The current hourly charging approach is considered adequate for these 
services.  
The Report on New Zealand’s Dairy Food Safety Regulatory System found that there is 
unanimous support for continued contestable verification by third  parties, not by the regulator.  
Verification for dairy is contestable, with the majority of service being provided by Assure 
Quality, a state -owned enterprise. While MPI has no intention of expanding the scope of its 
activities in the dairy sector at prese nt, an increased Verification Services presence in this 
market cannot be discounted.  
6.33.2  Problem  definition  
The current regulations would not support MPI Verification Services to recover costs 
effectively if it expanded its operations in the dairy sector  
Verif ication Services is already providing verification to the dairy sector, acting as verifier of 
last resort, and it is necessary that there is alignment with circuit business cost recovery. The 
current single hourly rate charge for verification in Part 1 of the Schedule in the Animal 
Products (Dairy Industry Fees and Charges)  Regulations  is relatively simple compared with 
the charging regimes for circuit and establishment cost recovery in Part 7, Schedule 1 of the 
Animal Products (Fees, Charges, and Levies) R egulations 2007.  
In the future, should a decision be made to expand the scope of Verification Service’s 
activities in the dairy verification market, the current cost recovery approach would need to be 
adjusted to encourage efficient use of MPI’s resources and ensure equity and consistency 
between New Zealand’s primary sectors.  
While no policy or business decision has been made to expand the scope of Verification 
Services’ activities into the dairy sector, it would be prudent to provide for such a move in th e 
event that it is required in the future.  
6.33.3  Proposed charges for dairy verification and audit  
MPI intends to replicate the proposed Verification Services cost recovery regime in Part 7, 
Schedule 1 of the Animal Products (Fees, Charges, and Levies) Regulatio ns 2007. The regime 
would be replicated in the Animal Products (Dairy Industry Fees and Charges)  Regulations  
2007. This would enable MPI to recover costs equitably and efficiently if a policy and  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   101 business decision was made for Verification Services to expa nd the scope of its activity in the 
dairy verification market.  
6.33.4  Questions for consideration  
Question 6.33 
1) Do you agree with the proposal to replicate the non-dairy  cost recovery provisions in 
the in the dairy cost recovery provisions ? 
2) If not, how would you approach cost recovery for this service?  
 
6.34 APA# 28 – CHARGE FOR MINOR AME NDMENTS TO A RISK MA NAGEMENT 
PROGRAMME (DAIRY)  
6.34.1  Background  
MPI processes a pplications for, evaluation of, and approval or variation of risk management 
programmes and quota compliance programmes.  
The Animal Products (Dairy Industry Fees and Charges)  Regulations  2007 prescribe cost 
recovery for this service using a fixed fee  (based on one hour)  and an hourly rate assessment 
charge (in 15 -minute intervals) for any time spent over the first hour.  
6.34.2  Problem  definition  
MPI’s view is that charging a full hour for a minor amendment to a risk management 
programme  under the Animal Products Act 1999  over-recovers the costs incurred, and is 
therefore inequitable, does not support efficiency, and is not justifiable.  
The options to manage this issue are:  
 Maintain the status quo.  
 Establish a separate cost recovery item for minor amendments to risk management 
programmes.  
6.34.3  Proposed charge for minor amendments to a risk management programme  
MPI proposes to implement a fixed fee of $77.50, based on one half -hour of time, plus hourly 
rate charges at $155 per hour, charged in 15 -minute increments, after the first half hour for 
minor amendments to risk management programmes.  
This proposal will support equity, efficiency and justifiability.  
6.34.4  Questions for consideration  
Question 6.34 
1) Do you agree with the proposed method of cost recovery for minor amendments to risk 
management programmes?  
2) If not, what is your preferred option for cost recovery of export declarations, and what 
are the reasons for this preference ? 
  
102  Consultation Paper on Proposed Revisions to the Cos t Recovery Regime  Ministry for Primary Industries  6.35 APA# 29 – CHARGE FOR ADDITIONAL TIME SPEN T PROCESSING OFFICIA L 
ASSURANCES  (DAIRY)  
6.35.1  Background  
The wording of this proposal replicates section 6.16 (APA#1 0). The inclusion of this proposa l 
here is to give notice that MPI proposes to apply the same approach to the processing of 
official assurances for the dairy sector.  
6.35.2  Problem  definition  
Refer to section 6.16. 
6.35.3  Options  
Refer to section 6.16. 
6.35.4  Analysis of options  
Refer to section 6.16. 
6.35.5  Proposed fee for official assurances – Option 2  
As detailed in section 6.16, MPI proposes to:  
1) Introduce a fixed fee ($32) and  hourly rate charging (after the initial 15 minutes , in 15 - 
minute intervals thereafter)  for issue of official assurance s, with hourly rates charged at:  
a. the rate specified in Part 2 of the Animal Products (Fees, Charges and Levies) 
Regulations 2007  (proposed to increase to $155); or   
b. for live animal and germplasm e xports, Hourly rate 1, Part 8 , Schedule 1 of the 
Animal Products (Fees, Charges and Levies) Regulations 2007  (proposed to increase 
to $186.30).  
2) Maintain  the current fixed fee and hourly rate charging approach for re -issue  of official 
assurances, with hourl y rates charged at:  
a. the rate specified in Part 2 of the Animal Products (Fees, Charges and Levies) 
Regulations 2007  (proposed to increase to $155); or   
b. for live animal and germplasm exports, hourly rate 1, Part 8 , Schedule 1 of the Animal 
Products (Fees, C harges and Levies) Regulations 2007  (proposed to increase to 
$186.30).  
3) Charge disbursements at actual and reasonable costs.  
6.35.6  Questions for consideration  
Question 6.35 
1) What is your preferred method of cost recovery for the issue of official as surances for 
dairy products?  
2) What is your preferred method of cost recovery for the reissue of official assurance 
documents for dairy products?  
 
6.36 APA#30 – ADD WAIVER PROVISION S TO DAIRY INDUSTRY FEES AND 
CHARGES REGULATIONS  
6.36.1  Background  
The Animal Products (Dairy Industry Fees and Charges) Regulations do not currently contain 
any provision for the Director -General to wa ive fees and charges. Other regulatory  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   103 frameworks in the food, animal welfare and biosecurity sectors include waiver provisions on a 
case-by-case basis . 
6.36.2  Problem definition  
The absence of waiver provisions from the Animal Products (Dairy Industry Fees and 
Charges) Regulations restricts the ability of the Ministry to take a more flexible approach to 
cost recovery where it is administratively uneconomical or impractical to charge users for 
services provided.   
6.36.3  Proposed waiver provisions   
The Ministry has not i dentified any legal impediment to the inclusion of a waiver provision 
for dairy industry fees and charges.  
The Ministry therefore proposes to replicate the current waiver provisions in the Animal 
Products (Fees, Charges and Levies) Regulations 2007 in the updated Animal Products (Dairy 
Industry Fees and Charges) Regulations. The wording of the provisions would therefore be 
the same as or similar to:  
Director -General may grant exemption or waiver  
The Director -General may grant an exemption from, or waive or refund, any fee, 
charge, or levy specified in these regulations, in whole or in part, in any appropriate 
case or class of cases.  
6.36.4  Questions for consideration  
Question 6.36 
Do you support the inclusion of waiver provisions in the Animal Products (Dairy Industry 
Fees and Charges) Regulations?  
  
104  Consultation Paper on Proposed Revisions to the Cos t Recovery Regime  Ministry for Primary Industries  6.37 APPENDIX 1  – MPI ACTIVITIES UNDER  THE ANIMAL PRODUCTS ACT 
6.37.1  New Zealand standards, specifications and guidance  
MPI activities in the area of setting standards include:  
 setting New Zealand safety and suitability standards  for food, pet food and other animal 
products for animal consumption;  
 setting maximum residue limit s;  
 developing and implementing operational standards and guidance for industry ;  
 clarifying and interpreting standards or sp ecifications ; 
 setting evaluation and verification requirements  (and providing training and updates to 
recognised persons);  
 contributing to the development of international standards ;  
 establishing import requirements ; 
 reviewing the effectiveness of standar ds. 
6.37.2  Export standa rds and m arket access  
MPI activities in facilitating exports include:  
 provision of technical policy advice to government policy makers;  
 contributing to the development of international standards;  
 negotiating technical market access conditi ons and specifications;  
 providing certification and other assurance activities to meet international authority 
requirements;  
 setting evaluation and verification requirements;  
 provision of verification services (where these must be performed by government 
employees);  
 administering the export eligibility system (E -Cert);  
 overall review of industry export programmes.  
6.37.3  Approvals and registrations  
MPI services in this area include:  
 providing  the services to regulated parties  under the Act : 
- registration of risk management programmes (production systems and processes);  
- approval and recognition of agencies and persons, including third party verifiers (such 
as warrants for MPI, VA, and PHU  staff);  
- registration of exporters . 
 providing the administrative systems and p rocesses for approvals, including evaluation 
and review;  
 maintenance of associated public registers;  
 suspension and removal of approvals and registrations.  
6.37.4  Monitoring and audit  
MPI monitoring and audit work in this area includes:  
 regularly collection and a ssessment of information to check compliance with regulatory 
requirements;  
 general (national) monitoring programmes such as monitoring of the shellfish commercial 
harvest;  
 random sampling and testing of products across all sectors;  
 imported food monitorin g programme;   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   105  industry level monitoring programmes such as the National Chemical Contaminants 
Programme (dairy), and poultry residue monitoring;  
 monitoring and assessing recognised agencies and persons;  
 scheduled auditing of industry or business systems and  processes;  
 intervening when non -compliance is detected;  
 dealing with inquiries and providing information to industry on compliance;  
 trends analysis for compliance and non -compliance.  
6.37.5  Operational response  and i nvestigations  
Our work in this area includes:  
 responding to and investigating consumer complaints and reports of non -compliance;  
 investigation of signals and information that indicate potential problems.  
6.37.6  Enforcement  
MPI’s main activities in the area of enforcement include:  
 applying corrective actions in cases of non -compliance by containment or prevention of 
recurrence;  
 imposing regulatory sanctions;  
 initiating and/or managing product recalls and emergency responses;  
 implementing standards relating to responses for the rang e of events that arise;  
 providing systems and processes for emergency response;  
 co-ordinating recalls of food (domestic and international) and other relevant products 
from the New Zealand market;  
 preparing and taking prosecutions;  
 ensuring  a nationally consistent response.  
 
6.37.7  Policy advice (including technical input)  
Our policy advice work includes:  
 provision of technical policy advice to government policy makers;  
 engagement, on behalf of New Zealand, with the Codex Alimentarius Commission  and 
other multi -lateral forums.   
106  Consultation Paper on Proposed Revisions to the Cos t Recovery Regime  Ministry for Primary Industries  6.38 APPENDIX 2  – MPI VERIFICATION SER VICES STRUCTURE  
MPI Verification Services plays a key role in the meat industry owing to the requirement by 
the EU and China for full -time veterinary supervision. Other markets like the United States 
also have requirements for government veterinarian presence with varying frequencies.  
The MPI Verification  Services directorate is led by a Director, supported by:  
 an Operational Specialist Coordinator who provides coordination of MPIVS operational 
matters;  
 an Agency Technical Manager who provides the overall leadership and direction in 
technical matters;  
 six regional technical managers, each of whom is supported by a regional business 
coordinator and a regional technical specialist.  
Teams operate in the following geographical areas (supported by the Wellington Head Office -
based technical team):  
 Upper North Island;  
 Waikato and the Bay of Plenty;  
 Manawatu, Taranaki and Wanganui;  
 Hawkes Bay/Wellington;  
 Canterbury and the West Coast; and  
 Southland and Otago.  
 
6.39 APPENDIX 3  – SERVICES TO THE DAIR Y INDUSTRY  
6.39.1  The development and maintenance of New Zealand standards  
MPI develops and maintains New Zealand standards by:  
 setting New Zealand safety and suitability standards;  
 developing and implementing operational standards and guidance for industry;  
 clarifying and interpreting standards and specifications;  
 setting verification requirements;  
 reviewing the effectiveness of standards.  
6.39.2  Performance  Monitoring  
Monitoring f or dairy industry performance encompasses:  
 undertaking system performance audits to ensure the regulatory model is working  as 
intended ;  
 monitoring and  assessing recognised agencies’ and accredited persons’ performance (in 
conjunction with the accreditation body) by assessing a percentage of performance -based 
verification reports;  
 providing technical clarification, technical assessments and regulatory c ompliance dispute 
resolution, and managing critical non -compliance;  
 monitoring, reporting on and managing routine procedural failures in dairy processing 
premises and export non -conformances;  
 contributing to industry forums and working groups such as the  Dairy Product Safety 
Advisory Council, and liaising with overseas regulators on systems performance .  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   107 MPI will investigat e cost recovery for responses and incidents that fall outside the scope of 
current cost recovery provisions as part of its overarching  review of cost recovery.  
6.39.3  The development and maintenance of market access  and export standards  
MPI develops and maintains market access and export standards  by: 
 negotiating technical market access and specifications for existing markets;  
 developing, mainta ining and evaluating export food standards and systems;  
 reviewing industry export programmes;  
 setting verification requirements for industry . 
6.39.4  The dairy residue monitoring programme (National Chemical Contaminants Programme)  
Independent service providers s ample raw milk , colostrum and dairy products to confirm that 
residue or contaminant levels do not exceed acceptable limits for New Zealand or for export 
markets  and report the results to MPI . The monitoring includes random monitoring and 
targeted surveilla nce of raw milk, dairy material and dairy products on farm, in bulk milk 
tanks, in milk tankers and at dairy premises as well as surveys (when there is little or no 
historical data).  
The key outputs of this service are:  
 an assurance that not less than 99  percent  of raw milk conforms to N ew Zealand  and 
international standards at the farm gate;  
 confirmation that the regulatory framework delivers dairy products that are safe and 
accurately represented;  
 confirmation of the accuracy of attestations provided t o other competent authorities;  
 confirmation that Registered Manufacturing Programme  sampling and testing plans and 
procedures are appropriate, reliable and capable of identifying non -conformances;  
 investigation of unfavourable findings to ensure that cont rols remain effective and that 
emerging hazards are identified and appropriate regulatory measures are applied.  
The National Chemical Contaminants Programme includes the independent verification 
programme, which verifies the accuracy of commercial testing  of exported products for food 
safety, wholesomeness and standards of identity.  
  
108  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  6.40 APPENDIX 4  – EXISTING AND PROPOSE D DAIRY FEES UNDER ANI MAL PRODUCTS ACT 199 9 
 
Fees are shown as GST exclusive.  
Shaded columns and headers are  for referencing and commentary purposes . Light grey shaded content is for new proposals . Additional line spacing and column/row lines have been 
added  for readability.  
 
Animal Products (Dairy Industry Fees and Charges) Regulations 2007  
Part 1 – Fixed fees  
 
 Service area  Type of fee  Fee  When fee payable and by whom  Proposed Fee , charge  or levy  Comment  
 Standards setting  
1 Development and 
maintenance of standards  Quarterly fee  $351,447  
 Payable by Fonterra Co -operative 
Group Limited on 1 July, 1 October, 1 
January and 1 April  
  APA#25  
Proposed new 
methodology – see 
below.  2  Quarterly fee  $3,814  Payable by Westland Co -operative 
Dairy Company Limited on 1 July, 1 
October, 1 January and 1 April  
3  Quarterly fee  $1,223  Payable by Tatua Co -operative Dairy 
Company Limited on 1 July, 1 
October, 1 January and 1 April  
4  Quarterly fee  $215.11  Payable by Dairy Goat Co -operative 
(N.Z.) Limited on 1 July, 1 October, 1 
January and 1 April  
5  Quarterly fee  $1,511  Payable by Open Country Cheese 
Limited on 1 July, 1 October, 1 
January and 1 April  
6  Annual fee  $382.22  for each 
registered 
manufacturing 
premises receiving 
less than 316 000 kg 
of raw milk solids  Payable by the registrant on 1 July 
each year   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   109  Service area  Type of fee  Fee  When fee payable and by whom  Proposed Fee , charge  or levy  Comment  
7 Development and 
maintenance of market 
access standards and 
programme  Quarterly fee  115,378  Payable by Fonterra Co-operative 
Group Limited on 1 July, 1 October, 1 
January and 1 April  
   APA#25  
Proposed new 
methodology – see 
below.  8  Annual fee when first 
registered  $306.67  for each 
exporter first 
registered in July, 
August or 
September  Payable by the applicant on  application 
for registration in the year commencing 
1 July in the year of registration and 
ending on 30 June the following year  
9   $230.22  for each 
exporter first 
registered in 
October, November 
or December  Payable by the applicant on application 
for registration in the year commencing 
1 July in the year of registration and 
ending on 30 June the following year  
10   $153.78  for each 
exporter first 
registered in 
January, February or 
March  Payable by the applicant on application 
for registration in the  year commencing 
1 July in the year of registration and 
ending on 30 June the following year  
11   $76.44  for each 
exporter first 
registered in April, 
May or June  Payable by the applicant on application 
for registration in the year commencing 
1 July in t he year of registration and 
ending on 30 June the following year  
12  Annual fee  $306.67  for each 
exporter  Payable by the registrant on 1 July 
each year  
 Approvals  
13 
 
14 
 
 
 
15 Application for, evaluation 
of, and approval or variation 
of risk management 
programmes and quota 
compliance programmes  Application for 
approval fee  $122.00  per 
application ; plus 
$122.00  per hour in 
excess of 1 hour 
processing 
application  $122.00  payable by the applicant on 
application for approval and any 
remainder paya ble within 1 month of 
the granting or refusal to grant 
approval  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
 
 
 
- actual and reasonable costs  Updated rates  
 
 
 
 
 
Common#4   
110  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries   Service area  Type of fee  Fee  When fee payable and by whom  Proposed Fee , charge  or levy  Comment  
16 
17 
 
 
 
 
18 Application for, evaluation 
of, and approval or variation 
of laboratories  Application for 
approval fee  $122.00  per 
application plus 
$122.00  per hour in 
excess of 1 hour 
processing 
application  $122.00  payable by the applicant on 
application for approval and any 
remainder payable within 1 mont h of 
the granting or refusal to grant 
approval  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
 
 
 
- actual and reasonable costs  Updated rates  
 
 
 
 
 
Common#4  
19 
20 
 
 
 
 
21 Evaluation of, and approval 
or variation of codes of 
practice  Application for 
approval fee  $119.11  per 
application plus 
$119.11  per hour in 
excess of 1 hour 
processing 
application  $119.11  payable by the applicant on 
application for approval and any 
remainder payable within 1 month of 
the granting or refusal to grant 
approval  - $155.00, plus  
- $155 per hour after the first hour, in 15 -
minute increments, plus  
 
 
 
- actual and reasonable costs  Updat ed rates  
 
 
 
 
 
Common#4  
22 
23 
 
 
 
 
24 Application for, evaluation 
of, and recognition, 
variation, or renewal of 
agency or person as 
recognised agency or 
recognised person under Part 
8 of the Animal Products Act 
1999  Application for 
approval fee  $122.00  per 
application plus 
$122.00  per hour in 
excess of 1 hour 
processing 
application  $122.00  payable by the applicant on 
application for approval and any 
remainder payable within 1 month of 
the granting or refusal to grant 
approval  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
 
 
 
- actual and reasonable costs  Updated rates  
 
 
 
 
 
Common#4  
25 
26 
 
27 Application for approval of a  
maintenance compound(s)  Application for 
approval fee   Payable by the applicant on application 
for approval  - $77.50, plus  
- $155 per hour  after the first  half hour, in 
15-minute increments, plus  
- actual and reasonable costs  APA#13  
 
 
Common#4  
 Market access functions  
28 
29 
 
 
 
 
30 Application for market 
access functions  Application fee  $164.00  per 
application plus 
$164.00  per hour in 
excess of 1 hour 
considering 
application  $164.00  payable by the applicant on 
application and any remainder payable 
within 1 month of provision of notice  - $155.00, plus  
- $155 per hour after the first hour, in 15 -
minute increments, plus  
 
 
 
- actual and reasonable costs  Updated rate  
 
 
 
 
 
Common#4  
  
 
  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   111  Service area  Type of fee  Fee  When fee payable and by whom  Proposed Fee , charge  or levy  Comment  
 Compliance and monitoring  
31 Dairy residue monitoring 
programme  Quarterly fee  $287,249  Payable by Fonterra Co -operative 
Group Limited on 1 July, 1 October, 1 
January and 1 April   
 
APA#25  
Proposed new 
methodology – see 
below.   32  Annual fee when first 
registered  $361.78  for each 
exporter first 
registered in July, 
August, or 
September  Payable by the applicant on application  
for registration for the year 
commencing 1 July in the year of 
registration and ending on 30 June the 
following year  
33   $271.11  for each 
exporter first 
registered in 
October, November, 
or December  Payable by the applicant on application 
for registrat ion for the year 
commencing 1 July in the year of 
registration and ending on 30 June the 
following year  
34   $181.33  for each 
exporter first 
registered in 
January, February, 
or March  Payable by the applicant on application 
for registration for the year 
commencing 1 July in the year of 
registration and ending on 30 June the 
following year  
35   $90.67  for each 
exporter first 
registered in April, 
May or June  Payable by the applicant on application 
for registration for the year 
commencing 1 July in the year of 
registration and ending on 30 June the 
following year  
36  Annual fee  $361.78  for each 
exporter  Payable by the registrant on 1 July  
37 Performance monitoring  Quarterly fee  $90,036  Payable by Fonterra Co -operative 
Group Limited on 1 July, 1 October, 1 
January and 1 April   
APA#25  
Proposed new 
methodology – see 
below.   38  Quarterly fee  $2,687  Payable by Westland Co -operative 
Dairy Company Limited on 1 July, 1 
October, 1 January and 1 April  
39  Quarterly fee  $826.67  Payable by Tatua  Co-operative Dairy 
Company Limited on 1 July, 1 
October, 1 January and 1 April   
112  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries   Service area  Type of fee  Fee  When fee payable and by whom  Proposed Fee , charge  or levy  Comment  
40  Quarterly fee  $103.11  Payable by Dairy Goat Co -operative 
(N.Z.) Limited on 1 July, 1 October, 1 
January and 1 April  
41  Quarterly fee  $1,034  Payable by Open Country Cheese 
Limited on 1 July, 1 October, 1 
January and 1 April  
42  Annual fee  $105.78 for each 
registered 
manufacturing 
premises receiving 
less than 316 000 kg 
of raw milk solids  Payable by the applicant on 1 July each 
year 
43 Development and 
maintenance  of New Zealand 
standards, dairy residue 
monitoring and performance 
monitoring  Annual levy    $930 per year to be  paid by small processors 
on 1 July each year.  
Small processors are persons with a farm 
dairy risk management programme that are 
not collection agents or are collection agents  
that collected less than or equal to 49 1,000 
kg of raw milk solids directly (not through a 
collection agent) in the previous financial 
year. 
A collection agent is:  
- a dairy processor whose business includes 
buying milk solid s from a dairy farmer; or  
- a person whose business includes buying 
milk solids from a dairy farmer for supply 
directly or  indirectly to a dairy processor.  APA#25  
Proposed new 
approach for small 
processors (< 491,000 
kg raw milk solids per 
annum)  
44 Development and 
maintenance of New Zealand 
standards, dairy residue 
monitoring and performance 
monitoring  Annual levy    Combined levy for large processor:  
Lprocessor  = [(TC MPI Annual  x  MS processor  last) /  
 MS total last ] 
Where : 
Lprocessor  = levy payable by processor X:  
TC MPI, Annual   = $3,420,089;  
MS processor  last  = each large processor’s milk 
solids collection for the previous year ; and  
MS total last  = total milk solids collected for the 
previous  year from all large processors.  APA#25   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   113  Service area  Type of fee  Fee  When fee payable and by whom  Proposed Fee , charge  or levy  Comment  
To be paid  by large processors in quarterly 
instalments on 30 September, 31 December, 
31 March and 30 June .  
Large processors are defined as persons that 
have a farm dairy risk management 
programme and are collection agents who 
collect ed more than 49 1,000 kilograms of 
milk solids from dairy farmers directly ( not 
through another collection agent)  in the 
previous financial year.  
A collection agent is:  
- a dairy processor whose business includes 
buying milk solids from a dairy farmer; or  
- a person whose business includes buying 
milk solids from a dairy farmer for supply 
directly or  indirectly to a dairy processor.  
45 Development and 
maintenance of export and 
market access standards and 
programme  Annual levy    $310  per year, t o be paid by small exporters 
on 1 July each year.  
Small exporters are defined as registered 
exporters that  export ed less than or equal to 
636,000 kg of dairy products in the previous 
financial year.  APA#25  
Proposed new 
approach for small 
exporters (< 636 000 
kg export mass per 
annum)  
46 Development and 
maintenance of market 
access standards and 
programme  Annual levy    Combined levy for large ex porter:  
LY exporter  = [(ETC MPI Annual   x  EM Y last) / 
EM Total last ] 
Where:  
LY exporter  = levy payable by exporter Y;  
ETC MPI Annual  = $1,258,824  
EM Y last           ’      y                 
the previous year  
EM Total last   =  total dairy export mass for 
the previous year from all large exporters 
(from New Zealand Customs  Service data ).  
To be paid by large exporters in quarterly 
instalments on 30 September, 31 December, 
31 March and 30 June .  
Large exporters are defined as registered APA#25  
Proposed new 
approach for large 
exporters (> 636 000 
kg export mass per 
annum)   
114  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries   Service area  Type of fee  Fee  When fee payable and by whom  Proposed Fee , charge  or levy  Comment  
exporters or other businesses that exported  
more than 636,000 kg of dairy products in the 
previous financial ye ar. 
47 
48 
 
49 Verification inspection and 
audits  Inspection and audit 
fee $164.00  per hour  Payable by occupier of the premises 
subject to verification inspection and 
audits  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by occupier of the premises subject 
to verification inspection and audits  Common#4  
50 
 
51 
 
 
52 Application for product 
disposition  Application fee  $164.00  per 
application , plus 
$164.00  per hour in 
excess of 1 hour 
considering 
application  $164.00  payable by the applicant on 
application and any remainder payable 
within 1 month of granting or refusal to 
grant approval  - $155.00, plus  
 
- $155  per hour  after the first hour, in 15 -
minute increments, plus  
 
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month of 
granting or refusal to grant approval .  
 
 
 
 
Common#4  
 Official assurances  
53 
54 
 
55 Issue of official assurance 
under section 61  Issue fee  $122 per hour or 
part hour  Applicant  - $32.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month of 
granting or refusal to grant approval . APA#29  
 
 
Common#4  
56 
57 
 
58 Reissue of official assurance 
under section 64(2) if 
replacement assurance 
demanded by importing 
country  Issue fee  $366 per 
replacement 
certificate , plus  
assessment charge 
on hourly basis 
specified in Part 2 
for any hours 
exceeding 3 hours to 
a maximum of $ 889 Applicant  - $465.00 per replacement certificate, plus  
- $155 per hour  after the first three  hours, in 
15-minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . APA#29  
 
 
Common#4  
  
  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   115  Service area  Type of fee  Fee  When fee payable and by whom  Proposed Fee , charge  or levy  Comment  
 Exporter registration  
59 
 
60 
 
 
61 Application for registration 
or renewal of registration  Application fee  $122.00  per 
application , plus  
$122.00  per hour in 
excess of 1 hour 
processing 
application  $122.00  payable by the applicant and 
any remainder payable within 1 month 
of granting or refusal to grant approval  - $155.00, plus  
 
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
 
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month of 
granting or refusal to grant approval .  
 
 
 
 
Common#4  
 Exporter declaration  
62 
 
 
 
 
 
 
 
 
 
 
 
 
63 Issue of Exporter Declaration  
for infant formula export  Issue fee   Applicant.  
 The formula in the first year would be:  
Fee 1 = (TAC 1 / TED 1 ) 
Where:  
Fee 1 = Fee per declaration in first year;  
TAC 1 = Estimated total approval costs; and  
TED 1 = Estimated total number of export 
declarations  
The formula in subsequent years would be:  
Fee P = (TAC P / TED P ) 
Where:  
Fee P = Fee per declaration;  
TAC P = Total approval costs for previous 
year; and  
TED P = Total number of export declarations 
for previous year.  
and: 
- approval costs are the costs of staff time 
processing and approving export 
declarations in a given year including 
overhead costs.  
- total number of export declarations raised 
is the number of export declarations raised 
in E-cert by all infant formula exporters in 
a given year.  APA#26  
The charge would be 
invoiced monthly, to 
align with invoicing 
for the use of E -cert. 
  
116  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries   Service area  Type of fee  Fee  When fee payable and by whom  Proposed Fee , charge  or levy  Comment  
64 Waiver provision  Annual levy    Director -General may grant exemption or 
waiver  
The Director -General may grant an 
exemption from, or waive or refund, any fee, 
charge, or levy specified in these regulations, 
in whole or in part, in any appropriate case 
or class of cases . APA# 30 
 
 
Part 1A – Charges for use of electronic certification system  
 Current basis  Proposed basis  Comment  
65 1 
 
 
 
 
 
 
 
 
 
 
 
2 
 
3 For industry users that access the Ministry’s electronic certification system, charges based on the following formula 
are payable  in respect of each database request and each second of time spent on the server:  
 (cost per request + cost per second) x appropriate percentage  
where –  
cost per request  is the amount fixed from time to time by the Director -General by notice under section  167(1)(ma) 
of the Animal Products Act 1999 for each database request, having regard to clause 2  
cost per second  is the amount fixed from time to time by the Director -General by notice under section 167(1)(ma) 
of the Animal Products Act 1999 for each secon d of time on the server, having regard to clause 2  
appropriate percentage  is –  
(a) for industry users of a class for which recognised agency use of the electronic certification system is not 
required, 55%:  
(b) for all other industry users, 100%.  
In setting any co st per request or cost per second, the aim is for these costs to reflect usage of the electronic 
certification system for the relevant year or other period, with regular updating if appropriate.  
This Part applies to all users of the electronic certificatio n system.   No changes to 
methodology 
proposed.  
 
 
   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   117 Part 2 – Fee for services of certification and reconciliation  
   Proposed basis  Comment  
 Quarterly fee payable by holder of export licence    
66 A fee is payable for services of certification and reconciliation provided by the New Zealand Food Safety Authority in 
relation to the regulated control scheme described in regulation 3 of the Animal Products (Regulated Control Scheme – 
Dairy Export Quota Products) Regulations 2008 (services) . 
The holder of an export licence on 1 July, 1 October, 1 January, or 1 April must pay the fee on that date ( payment date ). 
The fee is calculated as follows:  
Fee =  amount to recover for year   x   holder’s allocated qu antity  
  4  total allocated quantity  
where – 
Amount to recover 
for year  Is the amount, as determined by the New Zealand Food Safety Authority, that needs 
to be recovered to fund the services in relation to all holders of export licences for the 
financial y ear in which the payment date falls (inclusive of goods and services tax)  
Holder’s allocated 
quantity  Is the total quantity (in tonnes) of all products in all designated markets for which the 
holder holds an export licence on the payment date  
Total allocated 
quantity  Is the total quantity (in tonnes) of all products in all designated markets for which all 
holders hold export licences on the payment date  
  No changes to 
methodology 
proposed.  
 
  
118  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  6.41 APPENDIX 5  – APA NON -DAIRY – EXISTING AND PROP OSED FEES (NON -DAIRY) UNDER ANIMAL PRODUCTS ACT 1999  
 
Fees are shown as GST exclusive.  
Shaded columns and headers are  for referencing and commentary purposes . Light grey shaded content is for new proposals . Additional line spacing and column/row lines have been 
added for readability.  
 
Animal Products (Fees, Charges, and Levies) Regulations 2007  
 
Schedule 1 – Fees and charges  
Part 1 – Schedule of fees  
 
  Matter in respect of which fee payable under Animal 
Products Act 1999  Fee Proposed Fee  Comment  
67 
68 
 
69 1 Application under section 20 for registration of risk 
management programme  $122.00  plus  
assessment charge on hourly basis specified 
in Part 2  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4  
70 
71 
 
72 2 Application under section 25 for agreement to 
amendment of risk management programme  $122.00  plus  
assessment charge on hourly basis specified 
in Part 2  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remain der payable within 1 month . Common# 1 
 
 
Common#4  
73 
74 
 
75 3 Fee in relation to update of risk management programme 
under section 26  $122.00  plus  
assessment charge on hourly basis specified 
in Part 2  - $77.50 , plus  
- $155 per hour  after the first half hour, in 15-
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . APA#12  
Common# 1 
 
Common#4   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   119   Matter in respect of which fee payable under Animal 
Products Act 1999  Fee Proposed Fee  Comment  
76 
77 
 
78 4 Application under section 34 for registration of food 
safety programme as risk management programme  $88.89  plus  
assessment charge on hourly basis specified 
in Part 2  in respect of assessing of conditions  - $102.27 , plus  
- $102.27 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the  applicant on application and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4  
79 
80 
 
81 5 Application under section 54 for registration as exporter  $122.00  plus  
assessment charge on hourly basis specified 
in Part 2  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4  
82 
83 
 
84 6 Application for approval of premises for export of 
products where required under export requirements  $122.00  per hour in considering application, 
but excluding the first hour  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on appli cation and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4  
85 
86 
 
87 7 Annual exporter registration fee under section 57  $122.00  plus  
assessment charge on hourly basis specified 
in Part 2  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4  
88 
89 
 
90 8 Application under section 65G for listing as a game estate  $122.00  plus  
assessment charge on hourly basis specified 
in Part 2  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4  
91 
92 
 
93 9 Annual listing fee under section 65L  $122.00  plus  
assessment charge on hourly basis specified 
in Part 2  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4   
120  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries    Matter in respect of which fee payable under Animal 
Products Act 1999  Fee Proposed Fee  Comment  
94 
95 
 
96 10 Application under section 75 for listing as homekill or 
recreational catch service provider  $122.00  plus  
assessment charge on hourly basis specified 
in Part 2  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4  
97 
98 
 
99 11 Annual listing fee under section 77  $122.00  plus  
assessment charge on hourly basis specified 
in Part 2  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4  
100 
101 
 
102 12 Application under section 102 for recognition or 
accreditation  $122.00  plus  
assessment charge on hourly basis specified 
in Part 2  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4  
103 
104 
 
105 13 Annual recognition or accreditation fee under section 108 $122.00  plus  
assessment charge on hourly basis specified 
in Part 2  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4  
106 
107 
 
108 14 Application for provision under section 111 of substituted 
notice of recognition or accreditation  $35.56  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4  
109 
110 
 
111 15 Issue of off icial assurance under section 61  $36.00 - $32.00, plus  
- $155 per hour  after the 15 minutes , in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . APA#11   
 
 
Common#4   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   121   Matter in respect of which fee payable under Animal 
Products Act 1999  Fee Proposed Fee  Comment  
112 
113 
 
 
114 16 Reissue of official assurance under section 64(2) if 
replacement insurance demanded by importing country  $366.22 per replacement certificate plus  
assessment charge on hourly basis specified 
in Part 2 for any hours exceeding 3 hours to a 
maximum of $ 889, plus  
disbursements at cost  - $465.00, plus  
- $155 per hour  after the first three hours, in 
15-minute incremen ts, plus  
 
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . APA#10  
 
 
 
Common#4  
115 17 Issue, on request, of statement of New Zealand standard 
under section 83  $22.22  $32.00  Updated rate  
116 
117 
 
118 18 Registration of transport operator, vehicle docking 
facility operator, or wharf operator under notice issued 
under section 40  $122.00  plus  
assessment charge on hourly basis specified 
in Part 2  - $155.00, plus  
- $155 per hour  after the first hour, in 1 5-
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4  
119 
120 
 
121 20 Application to list animal material depot as required 
under notice issued under section 167 and renewal of 
listing  $122.00  plus  
assessment charge on hourly basis specified 
in Part 2  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4  
122 
123 
 
124 21 Application for issue or revocation of relay permit for 
bivalve molluscan shellfish issued under Animal 
Products (Regulated Control Scheme – Bivalve 
Molluscan Shellfish) Regulations  2006  $122.00  plus  
assessment charge on hourly basis specified 
in Part 2  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1  month . Common# 1 
 
 
Common#4  
125 
126 
 
127 22 Application for registration as bivalve molluscan 
shellfish harvest operator under Animal Products 
(Regulated Control Scheme – Bivalve Molluscan 
Shellfish) Regulations 2006  $122.00  plus  
assessment charge on hourly basis specified 
in Part 2  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4   
122  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries    Matter in respect of which fee payable under Animal 
Products Act 1999  Fee Proposed Fee  Comment  
128 
129 
 
130 23 Annual bivalve molluscan shellfish harvest operator fee  $122.00   - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4  
131 
132 
 
133 24 Application to list or renew listing as transport operators, 
sorting shed operators, or depot operators required by 
notice made under Animal Products (Regulated Control 
Scheme – Bivalve Molluscan Shellfish) Regulations 2006  $122.00  plus  
assessment charge on hourly basis specified 
in Part 2  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4  
134 
135 
 
136 26 Application to register a limited processing vessel  $122.00  plus  
assessment charge on hourly basis specified 
in Part 2  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4  
137 
138 
 
139 27 Annual limited processing vessel registering fee  $122.00  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4  
140 
141 
 
142 28 Application for approval of MAF Devices (brands/seals) 
made under Animal Products (Export Requirements for 
Branding, Marking and Security Devices) Notice 2006 
made under section 67  $122.00  plus  
assessment charge on hourly basis specified 
in Part 2  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4  
143 
144 
 
145 29 Application for recognition or accreditation under section 
100 $122.00  plus  
assessment charge on hourly basis specified 
in Part 2  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   123   Matter in respect of which fee payable under Animal 
Products Act 1999  Fee Proposed Fee  Comment  
146 
147 
 
148 30 Application to be certified as either a certified supplier 
(wild animals) or a certified game estate supplier under 
Animal Products (Specifications for Products Intended 
for Human Consumption) Notice 2004  $122.00  plus  
assessment charge on hourly basis specified 
in Part 2  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4  
149 
150 
 
151 31 Application for listing as further (pet food) processor 
under Animal Products (Specifications for Products 
Intended for Animal Consumption) Notice 2006  $122.00  plus  
assessment charge on hourly basis specified 
in Part 2  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . Common# 1 
 
 
Common#4  
152 
153 
 
154  Application to change a  recognised agency on a risk 
management plan  
  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month.  APA# 6 
 
 
Common#4  
155 
156 
 
157  Application to list as an approved halal premises under 
clause 10 (1) of the Animal Products (Overseas Market 
Access Requirements for Halal Assurances) Notice 2013   - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . APA# 7 
 
 
Common#4  
158 
159 
160  Issue of Official Assurance   - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . APA# 10 
 
 
Common#4  
161 
162 
 
163  Application to list as an approved halal organisations  
under clause 10 (4) of the Animal Products (Overseas 
Market Access Requirements for Halal Assurances) 
Notice 2013   - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on appl ication and 
any remainder payable within 1 month . APA# 7 
 
 
Common#4   
124  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries    Matter in respect of which fee payable under Animal 
Products Act 1999  Fee Proposed Fee  Comment  
164 
165 
 
166  Audit and inspection of approved halal organisations, 
halal assessment and approval personnel and issuing 
officers under clause   - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . APA# 7 
 
 
Common#4  
167 
168 
 
169  Application for approving, renewing or revoking an 
issuing officers approval  under clause 12 (1) (c) and (d) 
of the Animal Products (Overseas Market Access 
Requirements for Halal Assurances) Notice 2013   - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . APA# 7 
 
 
Common#4  
170 
171 
 
172  Issue of halal official assurances or halal attestations on a 
sanitary official assurance for product to be exported to 
any one or more of the markets  under clause 13 of the 
Animal Products (Overseas Market Access Requirements 
for Halal Assurances) Notice 2013   - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on a pplication and 
any remainder payable within 1 month . APA# 7 
 
 
Common#4  
173 
174 
 
175  Application for listing as a halal assessment and approval 
personnel and issuing officers;  under clause 15 (4) of the 
Animal Products (Overseas Market Access Requirements 
for Halal Assurances) Notice 2013   - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . APA# 7 
 
 
Common#4  
176 
177 
 
178  Application to list as a competent halal slaughter person  
under clause 21 (3) of the Animal Products (Overseas 
Market Access Requirements for Halal Assurances) 
Notice 2013 .  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . APA# 7 
 
 
Common#4  
179 
180 
 
181  Applications for re -certification as either a certified 
supplier (wild animals) or a certified game estate supplier 
under Animal Products (Specifications for Products 
Intended for Human Consumption) Notice 2013 .  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . APA# 8 
 
 
Common#4   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   125   Matter in respect of which fee payable under Animal 
Products Act 1999  Fee Proposed Fee  Comment  
182 
183 
 
184  Applications to re -list as a further pet food processor 
under clause 69E of the Animal Products (Specifications 
for Product Intended for Animal Consumption) Notice 
2014 .  - $155.00, plus 
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . APA#19  
 
 
Common#4  
185 
186 
 
187  Inspection and audit under the Animal Products Act 1999   - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month . APA#12  
 
 
Common#4  
188 
189 
 
190  Performance of  a function, power or duty that is:  
 required to be undertaken under the relevant Act, 
including subsidiary regulations and notices;  
 not prescribed elsewhere in the relevant cost 
recovery regulations.   - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month.  Updated rate  
 
 
Common#4  
191 
192 
 
193  Application for approval of a maintenance compound(s)   - $77.50 , plus  
- $155 per hour  after the first half hour, in  15-
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month.  APA#13  
 
 
Common#4  
 
 
   
126  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  Part 2 – Assessment charges on hourly basis  
 Where Part 1 specifies an assessment charge on an hourly basis that charge is to be determined as follows for each 
hour (or final part -hour) beyond the first hour spent on assessing the matter concerned:    
 Category  Fee  Proposed Fee or charge  Comment  
194 
195 
 
196 (a) For each hour (excluding final part -hour) spent by an 
officer or employee of the Ministry  
For each 15 -minute block in final part -hour 
 122.00  
 
30.50  
 - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month.   
 
 
Common#4  
 
 
197 
198 
 
199 (b) For each hour (excluding final part -hour) spent by a person 
engaged by the Ministry to assess the matter concerned 
who is not an officer  or employee of the Ministry  
For each 15 -minute block in final part -hour 133.33  
33.33  - $155.00, plus  
- $155 per hour  after the first hour, in 15 -
minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application and 
any remainder payable within 1 month.   
 
 
Common#4  
 
 
Part 3 – Costs incurred by Ministry at request of operator, etc  
 Current basis  Proposed basis  Comment:  
200 Actual and reasonable expenses incurred by an officer or employee of the Ministry 
may be recovered by the Ministry where those expenses arise from:  
(a) a request by the operator of a risk management programme, or other processor; 
or 
(b) an act or omission of an operator or processor.  Actual and reasonable costs incurred by 
an officer or employee of the Ministry 
may be  recovered  when they arise from:  
- a request by the operator of a risk 
management programme, or other 
processor;  
- an act or omission of an operator or 
processor.  
Costs would  include, but not be limited 
to, costs such as external review; expert 
review; notifi cation; product testing; 
travel and accommodation as well as 
disbursements such as photocopying, 
printing and stationery, phone, fax, video 
conferencing, postage and courier.    Common#4   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   127  
Part 4 – Travel costs  
 Current basis  Proposed basis  Comment:  
201 Where travel of a Ministry officer or employee is required for any of the matters 
specified in Parts 1, 2, 3, 7, and 8, an additional amount of $0.69 per kilometre 
travelled by the officer or employee is payable in addition to the relevant fee or 
charge.  Rate published by the per km charge as 
promulgated from time to time by the 
Commissioner of Inland Revenue under 
section DE12(3) of the Income Tax Act 
2007 . Common#2  
 
Part 5 – Cost of other work -related allowances  
 Current basis  Proposed basis  Comment:  
202 Additional amounts are payable in respect of the actual and reasonable cost to the 
Ministry of work -related allowances paid to Ministry officers and employees where 
those are fairly attributable to any of the matters specified in Parts 1, 2, 3, 7, and 8. 
Without limiting the generality of what constitutes a work -related allowance, these 
include matters such as meal allowances, clothing and laundry allowances, and field, 
standby, and isolation allowances.  Actual and reasonable costs associated 
with the activity being  undertaken.  Common#4  
   
128  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  Part 6 – Charges for use of electronic certification system  
 Current basis  Proposed basis  Comment:  
203 1 For industry users that access the Ministry’s electronic certification system, charges based 
on the following formula are payable in respect of each database request and each second 
of time spent on the server:  
 (cost per request + cost per second) x appropriate percentage  
where –  
cost per request  is the amount fixed from time to time by the Director -General by n otice 
under section 167(1)(ma) of the Animal Products Act 1999 for each database request, 
having regard to clause 4  
cost per second  is the amount fixed from time to time by the Director -General by notice 
under section 167(1)(ma) of the Animal Products Act 1999 for each second of time on the 
server, having regard to clause 4  
appropriate percentage  is –  
(b) for industry users of a class for which recognised agency use of the electronic 
certification system is not required, 55%:  
(d) for all other industry users, 100%.   No changes proposed  
 4 In setting any cost per request  or cost per second , the aim is for these costs to reflect 
usage of the electronic certification system for the relevant year or other period, with 
regular updating if  appropriate.   No changes proposed  
 5 This Part applies to all users of the electronic certification system.   No changes proposed  
 
 
   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   129 Part 7 –Verification charges  
 Current  Proposed charges  Comment:  
 Notes    
 1  The charges set out in this Part apply where any verification function under the Animal 
Products Act 1999 is carried out by an officer or employee of the Authority.    
 2  The charges set out in this Part are exclusive of goods and services tax, and goods and 
services tax on these charges will be added to the total invoice.    
 3  In this Part, –     
  after -hours callout charges  refer to charges payable for hours where a veterinary or non -
veterinary verifier performs verification functions at any place or premises outside normal 
agreed hours of work, and are chargeable for those hours in substitution for any 
establishment or circ uit charges    
  Authority  means the New Zealand Food Safety Authority    
  breakfast shift  refers to the situation where the verification functions carried out by a 
verifier in any day are commenced before 6 am    
204  circuit charges  refer to charges payable in respect of any place or premises where the 
verification functions are performed by Authority verifiers who are not permanently or 
semi -permanently based at the place or premises   APA#22   
MPI proposes to enable Verification Serv ices to 
recover the costs of non -verification functions 
and services it provides to operators.    
  disestablishment charges  means the charges payable in respect of the disestablishment 
of the position of a veterinary verifier due to the closure of an operator's premises or the 
reduction of operations at those premises    
  double time  refers to overtime hours worked by a verif ier for which the verifier is 
entitled, by his or her employment contract, to double time rates    
  establishment charges  refer to charges payable in respect of any place or premises where 
the verification functions are performed by Authority verifiers who are permanently or 
semi -permanently based at the place or premises    
205  non-veterinary verifier  means a verifier who is not a veterinarian registered under the 
Veterinarians Act 2005   APA#22  
MPI proposes to remove the differentiation in the 
circuit charging regime between veterinarian and 
non- veterinarian verifiers.   
130  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries   Current  Proposed charges  Comment:  
   penal rate 0.5  means the rate per hour of the first 3 hours of penal time worked by 
an employee during the period between —  
 (a) midnight at the end of Friday; and  
(b) midday Saturday    
  penal rate 1.0  means the rate for every hour of penal time worked by an employee other 
than hours to which penal rate 0.5 applies     
206  Penal rate 2.0 means the rate for every hour of penal time worked by an employee other 
than hours to which penal rate 0.5 and 1.0 applies   APA#2 3 
MPI proposes to create a new penal rate (2.0 x 
regular hourly rate) and insert new penal rates 
into the relevant penal rates for veterinary verifier 
and supervising veterinary verifier.  
207  penal time  refers to hours worked by a verifier for which the verifier is entitled, by his or 
her contract of employment, to penal rates, being hours (other than overtime) worked 
within a 40 -hour week from Monday to Sunday   APA#23  
MPI proposes to amend the definitio n of penal 
time to refer to Monday to Sunday instead of the 
current Saturday, Sunday or statutory holidays.  
  reserve rate  refers to the rate for hours worked by a reserve verifier    
  reserve verifier  means a temporary veterinary verifier or supervising veterinary verifier 
who undertakes the work of an establishment verifier while that verifier is on annual 
leave or is otherwise absent on a temporary basis    
  shift rates  refers to the rates applicable to the case where a verifier is entitled, by his or 
her employment contract, to extra remunerations for working shifts    
208  supervising veterinary verifier  means a veterinary verifier who has prime responsibility 
for the verification functions at a place or premises   APA#22  
MPI proposes to remove the differentiation in the 
circuit charging regime between veterinarian and 
non-veterinarian verifiers.  
  time and a half , or 1½ time , refers to overtime hours worked by a verifier for which the 
verifier is entitled, by his or her employment contract, to time and a half rates    
209  veterinary verifier  means a verifier who is a veterinarian registered under the 
Veterinarians Act 2005 .  APA#2 2 
MPI proposes to remove the differentiation in the 
circuit charging regime between veterinarian and 
non-veterinarian verifiers.  
 
   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   131    Current basis  Current fee  Proposed fee or charge  Comment:  
210 1 Establishment charge     
 A Basic hourly charge on export and game sectors     
211  For each hour normal time (but not penal time hours or 1½ or double 
time hours) spent by a verifier in verification functions  $41.04  $44.90  APA#18  
Establish a combined basic charge rate 
for circuit  and establishment.    
 B Hourly charges for verifiers    APA#18  
212 (1) Verifier      Remove the differentiation in the 
circuit charging regime between 
veterinarian and non -veterinarian 
verifiers . 
 
213 
214 
215  (a)  non-shift rates –  
 per hour  
per hour at 1½ time  
per hour at double time   
$68.12  
$82.61  
$110.15   
$70.30  
$105.50  
$140.60   
 
 
APA#23  
Create  new  penal rate (2.0 x regular 
hourly rate) and insert new penal rates 
into the relevant penal rates for 
veterinary verifier and supervising 
veterinary verifier.  
 
 
 
216 
 
 
217 
   (b)  shift rates  The relevant rate specified in 
paragraph (a), plus an 
additional rate of –  
(i) $30.00 per shift per 
verifier for evening 
shift 
(ii) $41.00 per shift per 
verifier for night shift   
 
 
$41.00  
 
 
$41.00  
   
132  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries     Current basis  Current fee  Proposed fee or charge  Comment:  
 
 
 
218 
 
 
 
219 
 
 
 
220 
   (c)  penal rates  The relevant rate specified 
in paragraph (a), plus an 
additional rate of –  
(i) $27.54 per hour per 
verifier for penal time 
worked at penal rate 
0.5 
(ii) $55.07 per hour per 
verifier for penal time 
worked at penal rate 
1.0 
(iii) Penal time worked at 
penal rate 2.0   
 
 
$35.20  
 
 
 
$70.30  
 
 
 
$140.60  
 APA#23  
Create a new penal rate (2.0 x regular 
hourly rate) and insert new penal rates 
into the relevant penal rates for 
veterinary verifier and supervising 
veterinary verifier.  
 
 
 
 
 
APA#23  
Create  new  penal rate (2.0 x regular 
hourly rate) and insert new penal rates 
into the relevant penal rates for 
veterinary verifier and supervising 
veterinary verifier.  
221   (d)  reserve rate  $55.07 per hour for each 
hour worked by a reserve 
verifier  $70.30   
 
 
222 
223 
224 (2)  Supervising verifier –  
(a)  non-shift rates –  
per hour  
per hour at 1½ time  
per hour at double time   
 
$72.50  
$89.18  
$118.91   
 
$75.10  
$112.60  
$150.20  APA#18  
 
 
 
 
225 
 
 
226 
   (b)  shift rates  
  
  The relevant rate specified 
in paragraph (a), plus an 
additional rate of –  
(i) $30.00 per shift per 
verifier for evening 
shift 
(ii) $41.00 per shift per 
verifier for night shift   
 
 
$41.0 0 
 
 
$41.00  
   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   133    Current basis  Current fee  Proposed fee or charge  Comment:  
 
 
 
227 
 
 
 
228 
 
 
 
229 
   (c)  penal rates  The relevant rate specified in 
paragraph (a), plus an 
additional rate of –  
(i) $29.73 per hour per 
verifier for penal time 
worked at penal rate 
0.5 
(ii) $59.46 per hour per 
verifier for penal time 
worked at penal rate 
1.0 
(iii) Penal time worked at 
penal rate 2.0   
 
 
$37.60  
 
 
 
$75.10  
 
 
 
$150.20  
 APA#23  
Create new penal rate (2.0 x regular 
hourly rate) and insert new penal rates 
into the relevant penal rates for 
veterinary verifier and supervising 
veterinary verifier.  
230   (d)  reserve rate  $59.46 per hour for each 
hour worked by a reserve 
verifier  $75.10   
 2  Circuit charge     
 A Basic hourly charge on primary processors who slaughter or dress 
animals other than fish      
231   Charge for each hour spent by a verifier in verification function for 
animals other than fish $20.97 per hour  $44.90  
 APA#18  
Establish a combined basic charge rate 
for circuit and establishment.    
 B  Basic hourly charge on secondary processors (other than processors 
of fish and operators of coolstores or other storage premises)     
232   Charge for each hour spent by a verifier in verification function  $20.97 per hour  $44.90   
 
 
 
 
233 
 
234 
 
235 C Annual charge for coolstores or other storage premises, and for 
processors of fish   
 (to be pro -rated on a monthly basis where verification contract for less 
than a full year)  
(a) coolstores or other storage premises, per coolstore or other 
premises  
(b) primary processing (including on a fishing vessel) of fish other 
than bivalve molluscan shellfish  
(c) processors of bivalve molluscan shellfish   
 
 
 
$1,100 per annum  
 
$549.00 per annum  
 
$1,547.00    APA# 21 
Annual charge for the coolstores, dry 
stores, shellfish and wetfish sectors  
removed from Part 7 of the Animal 
Products (Fees, Charges, and Levies) 
Regulations 2007. These sectors would 
instead be inv oiced at the basic rate 
instead.    
134  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries     Current basis  Current fee  Proposed fee or charge  Comment:  
 
236 D  Monthly charge for fishing vessels  
 Charge per vessel (in addition to any relevant charge under item C)   
$20.35    
237 E  Hourly charges for verifiers  
 (for all verification activities)    APA#18  
 
 
238 
239 
240 
241 (1) Verifier –  
(a) Non-penal rates –  
per hour (excluding seafood and coolstore premises)  
per hour for seafood and coostore premises  
per hour at 1½ time  
per hour at double time   
 
$93.04  
$93.04  
$128.85  
$171.80   
 
$120.10  
$120.10  
$180.10  
$240.1 0  
 
 
 
242 
 
 
 
243 
 
 
 
244  (b) Penal rates –  
  The relevant rate specified 
in paragraph (a), plus an 
additional rate of –  
(i) $57.00 per hour per 
verifier for penal time 
worked at penal rate 
0.5 
(ii) $85.90 per hour per 
verifier for penal time 
worked at penal rate 
1.0 
(iii) Penal rate 2.0   
 
 
$60.10  
 
 
 
$120.10  
 
 
 
$240.20  APA#23  
Create new penal rate (2.0 x regular 
hourly rate) and insert new penal rates 
into the relevant penal rates for 
veterinary verifier and supervising 
veterinary verifier.  
 
 
 
 
 
New penal rate 2.0  
 
 
245 
246 
247 
248 (2) Veterinary v erifier –  
(a) Non-penal rates –  
per hour (excluding seafood and coolstore premises)  
per hour for seafood and coostore premises  
per hour at 1½ time  
per hour at double time   
 
$93.04  
$93.04  
$128.85  
$171.80   
 
$120.10  
$120.10  
$180.10  
$240.10  APA#22  
Remove the differentiation in the 
circuit charging regime between 
veterinarian and non -veterinarian 
verifiers .  
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   135    Current basis  Current fee  Proposed fee or charge  Comment:  
 
 
249 
 
 
 
250 
 
 
 
 
251  (b) Penal rates  The relevant rate specified 
in paragraph (a), plus an 
additional rate of –  
(i) $57.00 per hour per 
verifier for penal time 
worked at penal rate 
0.5 
(ii) $85.90 per hour per 
verifier for penal time 
worked at penal rate 
1.0 
(iii) Penal rate 2.0   
 
 
$60.10  
 
 
 
$120.10  
 
 
 
$240.20  APA#23  
Create a new penal rate (2.0 x regular 
hourly rate) and insert new penal rates 
into the relevant penal rates for 
veterinary verifier and supervising 
veterinary verifier.  
 
 
 
 
 
New penal rate 2.0  
 3  
A After -hours callout charge   
Minimum charge     
252 
 
253  Minimum charge for any individual after -hours callout, however long  charge for 3 hours at the 
relevant rate under item B 
(plus flat rate $8.70 
breakfast shift charge, if 
applicable)   No change proposed.  
 B Hourly charges for verifiers      
254 
255  per hour  
 
 $75.00 (plus  
flat rate $8.70 breakfast 
shift charge, if applicable)  Relevant rate for MPI verifiers who attend, 
plus shift charge (if applicable)  
  
256 
257  per hour at 1½ time  $125.00 (plus  
flat rate $8.70 breakfast 
shift charge, if applicable)  Relevant rate for MPI verifiers who attend, 
plus shift charge (if applicable)  
  
258 
259  per hour at double time  $150.00 (plus  
flat rate $8.70 breakfast 
shift charge, if applicable)  Relevant rate for MPI verifiers who attend, 
plus shift charge (if applicable)  
  
 4  
A Disestablishment charges   
Where verifier employed by operator for less than 12 months  
Either –     
136  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries     Current basis  Current fee  Proposed fee or charge  Comment:  
260 
261 
262 
 
 
263 
264 
 
265 
  (a) the actual cost of transfer or relocation; or  
(b) the actual cost of retraining; or  
(c) the actual cost of the matters specified in paragraphs (a) and (b), 
if both are applicable; or  
(d) the lesser of – 
(i) the actual cost of redundancy; or  
(ii) the amount derived by multiplying the total ordinary pay 
during the period employed by 0.04165 – 
But in no case is the charge under paragraph (a), (b), (c), or (d) to 
exceed $55,000.    No changes proposed.  
 
 B Where verifier employed by operator for 12 months or more  
Either –    
266 
267 
268 
 
 
269 
270 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
271 
  (a) the actual cost of transfer or relocation; or  
(b) the actual cost of retraining; or  
(c) the actual cost of the matters specified in paragraphs (a) and (b), 
if both are applicable; or  
(d) the lesser of – 
(i) the actual cost of redundancy; or  
(ii) the amount calculated using the following formula:  
    (a x 0.08) + (a x 0.04)(b – 1) + (a x c x 0.0333) + (da)  
 where  
 a is the verifier’s total ordinary pay for the immediately 
preceding 12  months  
 b is the lesser of 19 or the number of completed years of 
employment with the operator  
 c is any completed months of employment in respect of an 
additional period of employment with the operator of less 
than 12 months  
 d is – 
 0.10 if the period o f employment completed is 1 year or 
more but no more than 3 years  
 0.20 if the period of employment completed is more than 3 
years but not more than 5 years  
 0.29165 if the period of employment completed is more 
than 5 years  
But in no case is the charge under paragraph (a), (b), (c), or (d) to  
exceed $55,000.    No changes proposed.   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   137    Current basis  Current fee  Proposed fee or charge  Comment:  
 
 
 
 
 
 
272 
 
 
 
 
 
273    Establishment charges  
Establishing a full -time Verification 
Services presence at an establishment. 
Recoverable costs  (on an actual and 
reasonable basis)  include, but are not 
limited to, the following:  
(a) capital items, which include:  
(i) computer terminals, monitors 
and printers;  
(ii) office furniture and storage;  
(iii) phones;  
(iv) technical equipment.  
(b) expenses, which include:  
(i) recruitment;  
(ii) costs associated with transfer or 
relocation;  
(iii) induction and training, including 
salary;  
(iv) new health and safety 
equipment;  
(v) new folders, stationery and 
lockable cupboards;  
(vi) inspection stamps, and reject and 
hold tags.   
 
 
 
   
138  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  Part 8 – Unit charges, hourly rates, and callout charges in respect of export of live animals and animal germplasm  
  Current basis  Charge ($) Proposed basis and charge:  Comment:  
  Unit charges payable for each relevant unit to be exported     
  If an animal is a zoo animal and comes within the description of 
another animal, only the unit charge for the animal as a zoo animal is 
payable.     
274 
275  Cats and dogs (including semen)(per animal or straw)  33.33   Per animal or  semen consignment   
$104.94  APA#2  
Change the cats and dogs unit fee  to per 
animal or semen straw . 
276  Equine animals (per animal)  33.33  $29.63   
277  Equine semen (per straw)  1.51 $1.02   
278  Livestock (only bovine, caprine, corvine, ovine, and porcine)  3.69 $3.85   
279  Bovine semen (per straw)  0.06 $0.06  APA#4  
APA#2  
Cap per animal charge on livestock export 
consignments to a maximum of 5,000 
animals . 
280  Caprine and ovine semen (per straw)  0.37 $0.06  APA#4  
281  Cervine semen (per straw)  2.96 $0.06  APA#4  
282  Embryos and ova (only equine, bovine, caprine, corvine, ovine) (per 
embryo or ovum)  2.96 $0.06  APA#4  
Remove equine embryos and ova from this 
category.  
283  Day-old chicks and hatching eggs (only poultry and ducklings) (per 
chick or egg)  0.002 3 $0.01   
284  Bees packages (excluding queens and bumble bees) (per kilogram)  0.35 $0.04  APA#2  
  
285 
 
 
286  Queen bees and bumble bees (other than packages) (per bee)  0.23 Queen bee (including a small number of 
attendant bees) or bumble bees (per 
queen or bumble bee)  
$0.31  APA#2  
Amend the ‘queen bees and bumbles bees 
(other than packages) (per bee)’ category . 
287  Ferrets (per animal)  1.87 $1.32   
288  Lamoids (per animal)  29.14  $50.78    
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   139   Current basis  Charge ($) Proposed basis and charge:  Comment:  
289  Birds (other than wild caught finches and wild caught rosellas) (per 
bird)  23.87  $38.00  APA#2  
Cap per bird (other than wild -caught 
finches and wild-caught rosellas) charge on 
consignments to a maximum of 30 birds.  
290  Finches (wild caught) and rosellas (wild caught) (per bird)  0.26 $0.27   
291  Zoo animals (per animal)  33.33  $104.94   
292 
 
293  Other animals and animal germplasm not specified above (per animal, 
egg, or straw)  8.80 Other animals and animals germplasm 
not specified (per consignment).  
$104.94  APA#2  
Amend the ‘other animals and animals’ 
germplasm not specified (per animal, egg 
or straw)’ category .  
 Hourly rates     
294 
 
 
 
 
295 
296 
 (1) Hourly rate for  recognised  persons who are employees of the Ministry 
undertaking specialist functions and activities necessary for the export 
of live animals or germplasm:  
 
 
(a) for each complete hour  
(b) for each 15 -minute block in a part -hour  
 
 
 
 
88.87 
22.22  
 Hourly rate for persons who are 
employees of the Ministry undertaking 
specialist functions and activities 
necessary for the export of live animals 
or germplasm:  
- $186.30, plus  
- $186.30 per hour after the first hour, 
charged in 15 -minute increments  APA#3  
Delete the word ‘recognised’ from 
‘recognised persons’.  
 
 
 
 
APA#4  
APA#5  
 
297 
298 (2) Hourly rate for services undertaken by an employee of the Ministry, on 
behalf of an exporter, to negotiate with the importing country 
alternative measures for meeting access requirements for overseas 
markets : 
(a) for each complete hour  
(b) for each 15 -minute block in a part -hour 121.98  
30.50  - $186.30, plus  
- $186.30 per hour after the first hour, 
charged in 15 -minute increments  APA#4  
APA#5  
One-hour minimum charge, with additional 
time after one hour chargeable in 15 -
minute blocks.  
299 
300 (3) Hourly rate for services undertaken by an employee of the Ministry, 
on behalf of an exporter, to negotiate new access requirements for 
overseas markets (except for exporters of cats and dogs)   
(a) for each complete hour  
(b) for each 15 -minute block in a part -hour 121.98  
30.50   APA#1  
Recover the costs of negotiating and 
maintaining market access as part of unit 
fees rather than hourly rate fees.  
 
  
 
     
140  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries    Current basis  Charge ($) Proposed basis and charge:  Comment:  
 Callout charges  
Callout charges  for recognised persons who are employees of the Ministry 
undertaking specialist functions and activities at any place or premises 
outside normal agreed hours of work and necessary for the export of live 
animals or germplasm     
301 (a) where an employee is entitled, by his or her contract of employment, to 
time and a half rates  112.92  per hour or part of an 
hour $252.17  per hour or part of an hour  Updated rate.  
302 (b) where an employee is entitled, by his or her contract of employment, to 
double time rates 136.97  per hour or part of an 
hour $318.04  per hour or part of an hour  Updated rate.  
303 
 
304 (c) where an employee works on a public holiday within the meaning of 
the Holidays Act 2003  384.62  per day or part of a 
day, plus  
136.97  for each hour or part 
of an hour worked  $845.13  per day or part of a day , plus  
 
$211.28  per hour or part of an hour  Updated rates.  
 
 
   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   141 Schedule 2 – Levies  
1. The levies set out in this schedule are payable by – 
(a) operators of risk management programmes in respect of operations under the programme:  
(b) operators of hides and skins export approved premises:  
(c) operators of fishing vessels who are operating under – 
(i) a risk management programme and who undertake primary processing of fish and bivalve molluscan shellfis h; or 
(ii) the regulated control scheme set out in the Animal Products (Regulated Control Scheme – Limited Processing Fishing Vessels) Regulations 2001  
2. The levies set out in this schedule are payable irrespective of who performs any verification or other functi on in relation to the processing operations.  
3. The levies per head set out in clause 1 are exclusive of goods and services tax, and goods and services tax on those levies w ill be added to the total invoice.  
 
 Current basis  Proposed basis and charge:  Comment:  
305 1 Levies per head where animals slaughtered and dressed  
The following levies are payable by the operators (not being homekill or recreational catch service 
providers) of premises or places where the animals specified are slaughtered and dressed, on the 
basis of the number of animals slaughtered and dressed:   The Meat Industry Association (MIA) has 
provisionally suggested ( prior to seeing 
the proposed schedule of fees below) that 
any revised levy could include a further 
Industry Innovation Fund component of up 
to 1.5 c  per lamb equivalent for lambs, 
sheep, bobby calves and cattle, additional 
to the 1c per lamb equivalent that is 
presently used for research supported by 
that Fund. The 1.5c per lamb equivalent 
would be additional to the base levy 
proposed.   
Rates based on the se proposal s are shown  
below.  
MIA and MPI are seeking  feedback 
(concept and level) on this proposal as part 
of the overall consultation process.  
   Operators that 
process wholly or 
partly for export  Operators that process 
only for consumption 
within New Zealand  Process wholly or partly for export1 / 
Process only for consumption within 
New Zealand *  
306 
307  Lambs, bobby calves, goats  $0.10 per head  $0.03 per head  $0.121 per head  
$0.04* per head  $0.1351  (excluding goats) with MIA levy  
308 
309  Sheep  $0.11 per head  $0.03 per head  $0.141 per head  
$0.04* per head  $0.1571 with MIA levy  
310 
311  Pigs $0.24 per head  $0.08 per head  $0.311 per head  
$0.09* per head  As proposed by MPI   
142  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries   Current basis  Proposed basis and charge:  Comment:  
312 
313  Cattle, horses  $0.76 per head  $0.21 per head  $0.861 per head  
$0.25* per head  $0.9741 with MIA levy  
314 
315  Deer  $0.86 per head  $0.10 per head  $1.571 per head  
$0.19* per head  As proposed by MPI  
316 
317  Ostriches, emus  $6.54 per  head $1.02 per head  $22.001 per head  
$3.50* per head  As proposed by MPI  
318 
319  Poultry  $0.004399 per bird  $0.00255 per bird  $0.0613381 per bird  
$0.003925* per bird  As proposed by MPI  
320 
321  Other species (other than fish)  $0.20 per head  $0.20 per head $0.271 per head  
$0.27* per head  As proposed by MPI  
 2 Annual levies for fish  
The following levies are payable on the basis of 
greenweight tonnage of fish or bivalve molluscan 
shellfish processed on the fishing vessel:      
322  (a) primary processors of fish other than bivalve 
molluscan shellfish  
  $0.42 per tonne of fish  
(a) processed on a 
fishing vessel that 
are – 
(i) filleted at sea 
for 
consumption in 
New Zealand; 
or 
(ii) otherwise 
processed at sea 
for 
consumption in 
New Zealand 
and that are not 
delivered to an 
onshore 
primary 
processor 
(except for the 
purposes of 
storage or 
transport); or  $0.20 per tonne of fish  
(a) processed on a fishing vessel that 
are – 
(iii) filleted at sea for consumption 
in New Zealand; or  
(iv) otherwise pr ocessed at sea for 
consumption in New Zealand 
and that are not delivered to an 
onshore primary processor 
(except for the purposes of 
storage or transport); or  
(b) processed by an onshore processor 
except for fish that are – 
(c) filleted at sea for consumption 
in New Zealand; or  
otherwise processed at sea for 
consumption in New Zealand and that 
are only transported or stored by the 
onshore processor; or    
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   143  Current basis  Proposed basis and charge:  Comment:  
(b) processed by an 
onshore processor 
except for fish that 
are – 
(i) filleted at sea 
for 
consumption in 
New Zealand; 
or 
(ii) otherwise 
processed at sea 
for 
consumption in 
New Zealand 
and that are 
only 
transported or 
stored by the 
onshore 
processor; or  
323    $0.82 per tonne of fish  
(a) processed on a 
fishing vessel that 
are –  
(i) filleted at sea 
for export; or  
(ii) otherwise 
processed at sea 
for the purposes 
of export and 
are not 
delivered to an 
onshore 
primary 
processor 
(except for the 
purposes of 
storage or 
transport); or  
(b) processed by an 
onshore processor $0.50 per tonne of fish  
(a) processed on a fishing vessel that 
are –  
(iii) filleted at sea for export; or  
(iv) otherwise processed at sea for 
the purposes of export and are 
not delivered to an onshore 
primary processor (except for 
the purposes of storage or 
transport); or  
(b) processed by an onshore processor 
except for fish that are – 
(iii) filleted at sea for consumption 
in New Zealand; or  
otherwise processed at sea for the 
purposes of export and that are only 
transported or stored by the onshore 
processor    
144  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries   Current basis  Proposed basis and charge:  Comment:  
except for fish that 
are – 
(i) filleted at sea 
for 
consumption in 
New Zealand; 
or 
(ii) otherwise 
processed at sea 
for the purposes 
of export and 
that are only 
transported or 
stored by the 
onshore 
processor  
324  (b) primary processors of bivalve molluscan 
shellfish   $3.88 per tonne of 
bivalve molluscan 
shellfish processed (if 
an operator processes 
only for consumption in 
New Zealand); or  $1.50 per tonne of bivalve molluscan 
shellfish processed (if an operator 
processes only for consumption in New 
Zealand); or   
325    $5.65 per tonne of 
bivalve molluscan 
shellfish processed (if 
an operator processes 
wholly or partly for 
export)  $2.90 per tonne of bivalve molluscan 
shellfish processed (if an operator 
processes wholly or partly for export)   
326 3 Annual levy for coolstores and other storage 
premises  
Operator of a coolstore or other storage premises, 
per coolstore or other premises   $190 per annum  $207.30 per annum   
 5 Annual levy for primary or secondary animal 
processing premises or places that do not include 
animal slaughter    Process wholly or partly for export  / 
Process only for consumption within 
New Zealand   
327 
328  (a) annual levy for bee products  $258 per annum * $577.50 per annum1 $471.80 * per annum  
$1005.701 per annum    
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   145  Current basis  Proposed basis and charge:  Comment:  
329 
  (b) annual levy for egg products  $191 per annum for 
all processors   $527.30  per annum for all processors   
330 
331  (c) annual levy for animal feed products  $326 per annum * $769 per annum1 $684.10* per annum  
$769.601 per annum   
332 
  (d) annual levy for dual operator butchers  $222 per annum for 
all processors   $256.50  per annum for all processors   
333 
334  (e) annual levy for renderers  $264 per annum * $1,252 per annum1 $132.80* per annum  
$559.701 per annum   
335 
  (f) annual levy for export of animal products –
non-consumption  $71.11  per annum 
for all processors   $136.00 per annum for all processors   
336 
337  (g) annual levy for primary or secondary 
processors (processing animal material or 
animal product not covered under 
paragraph (a) to (f))  $848  per annum * $1,054 per annum1 $710.10 * per annum  
$784.501 per annum   
 * Operators that process only for consumption within New Zealand  
1 Operators that process wholly or partly for export.     
338 Levy on listed, or re -listed, homekill and recreational catch service providers   $100 per year on  application for listing 
or re-listing.  APA#14  
Annual levy for listed, or re -listed, 
homekill and recreational catch service 
providers under section 76 of  the Animal 
Products Act 1999.  
 
  
146  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  7 Cost recovery proposals under the Animal Welfare Act 1999  
7.1 OVERVIEW  
As a humane society we have responsibilities to ensure our animals’ needs are met. Animal 
welfare is also increasingly important for accessing premium markets and differentiating New 
Zealand’s products. MPI issues Animal Welfare Export Certificate s (AWECs)  before any live 
animal can be exported, which helps to ensure that any animal welfare risks during travel are 
minimised.  
This is the first review of fees  for animal welfare activities  since 2008 . 
7.2 ACTIVITIES UNDER THE  ANIMAL WELFARE ACT 1 999 
7.2.1 Intro duction  
Cost recovery under the Animal Welfare Act is provided for under the Animal Welfare 
Export Certificate (AWEC) Regulations 1999. Activities that are cost -recovered include the 
issuing of AWECs and the Veterinary Inspector time associated with proces sing those 
certificates.  
Further details of MPI’s activities under the AWA are provided in s ection  7.5, Appendix 1.  
7.3 POLICY PROPOSALS  
AWA#1 – Charge for animal welfare export functions performed by non -veterinarians  
7.4 AWA#1 – CHARGE FOR ANIMAL WEL FARE EXPORT FUNCTION S 
PERFORMED BY NON -VETERINARIANS  
7.4.1 Background  
The Animal Welfare Export Certificate Regulations 1999 include charges for the costs of 
veterinarians employed by the Ministry to perfor m functions in accordance with Part 3 of the 
Animal Welfare Act 1999.  
7.4.2 Problem  definition  
MPI cannot recover  costs  for work done by non -veterinarians  
The Animal Welfare Export Certificate Regulations 1999 include charges only for MPI 
veterinarian staff. The y do not provide for charging for work done by non -veterinarian staff 
who are involved in processing AWECs. This results in under -recovery of the costs incurred 
for providing these services.  
7.4.3  Proposed  cost recover y for non -veterinarian work associated with  live animal export  
MPI proposes that the Animal Welfare Export Certificate Regulations 1999 also allow MPI to 
recover the costs of work done by non -veterinarians, as well as veterinarians, in accordance 
with Part 3 of the Animal Welfare Act 1999, and any other costs incurred in delivering the 
services. These proposals will help ensure the Ministry recovers the full cost of providing 
these services to the users who benefit from the services. This proposal would also align the 
Animal Product (Fees, Charges, and Levies) Regulations 2007 and the Animal Welfare 
Export Certificate Regulations 1999. The required changes to the Animal Welfare Export 
Certificate Regulations 1999 to give effect to this are:  
 clause 5: change the reference from 'any veterinarian' to 'a ny person';  
 clause 6 (a) and (b): change from 'veterinarian' to 'any person employed by the Ministry'; and   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   147  clause 7: establish hourly rates for:  
- Veterinarians undertaking specialist functions necessary for the issue of an animal welfare 
export certificate  under section 46 of the Animal Welfare Act 1999. (The rate for these 
veterinarians would align with the rate charged for veterinarians in Part 8, hourly rate 1, of the 
Animal Product (Fees, Charges, and Levies) Regulations 2007.)  
- Ministry employees to pro cess and consider an application for an animal welfare export 
certificate under section 42 of the Animal Welfare Act 1999. (The rate for these employees 
would align with the rate charged for veterinarians in Part 8, hourly rate 2, of the Animal 
Product (Fe es, Charges, and Levies) Regulations 2007.)  
MPI also proposes that disbursements associated with these activities be recoverable on an 
actual and reasonable basis.  
7.4.4 Questions for consideration  
Question 7.4 
1) Do you agree with the proposed method of charging for support staff that assist in 
issuing Animal Welfare Export Certificates?  
2) If not, what is your preferred option for cost recovery of support staff that assist i n 
issuing Animal Welfare Export Certificates, and what are the reasons for this 
preference ? 
  
148  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  7.5 APPENDIX 1  – MPI ACTIVITIES UNDER  THE ANIMAL WELFARE A CT 1999  
7.5.1 Standard  setting  
The following standards are developed, promulgated and maintained under the Animal 
Welfare Act 1999 ( AWA ): 
 publishing guidelines for the issue of Animal Welfare Export Certificates (AWECs) ; 
 gazetting exemptions for animals to need AWECs;  
 developing codes o f welfare;  
 developing codes of ethical conduct . 
7.5.2 Approvals  
The approvals programme issues AWECs to regulated parties  under the AWA and associated 
regulations.  
7.5.3 Animal Welfare Group  
The Animal Welfare Group is responsible for managing risks to animal welfare  in the New 
Zealand animal production and animal processing industries; in research, teaching and testing 
sectors (RTT); during exports of live animals; and in sectors where animals are used for 
companionship, recreational or working purposes.   
The Animal Welfare Group’s regulatory functions include providing standards, guidance and  
implementation support to these sectors to ensure requirements under the AWA are met.  
Compliance and monitoring  
The Animal Welfare Group works closely with MPI’s Verification Se rvices, who have more 
than 200 warranted Animal Welfare Officers at processing plants throughout New Zealand.  
Monitoring of animal welfare of animals presented for slaughter is conducted by MPI 
Verification Service staff.  Most  of these staff are veterinar ians who are also warranted Animal 
Welfare Officers.  Costs for a ll activities of MPI Verification Services staff at slaughter 
premises, including any animal welfare activity, is recovered from the meat processing 
industry.  
The monitoring and compliance service area under the AWA for production animals is 
provided by the Compliance Directorate in the Operations Branch , and  is funded by the 
Crown. The SPCA provides monitoring and compliance services for companion animals , and 
this is largely funded by public donations. The SPCA  also provide s some services for 
monitoring and compliance with production animals, particularly in relation to  lifestyle farms, 
and MPI funds a total of $400 ,000 a year  for training in this area.  
Other c ompliance activities include:  
 activities undertaken under section 141, including maintaining a register and the costs 
associated with managing these animals;  
 other veterinary inspections;  
 investigating complaints from the public.  
Animal Exports Team  
The Animal Welfare Group works closely with  the Animal Exports Team, which is  
responsible for processing AWEC applications and issuing an in -principle AWEC.  
Verification Services works in the animal exports area, with some port veterinary inspectors 
having del egated authority to issue Animal Welfare Export Certificates under the AWA. 
Costs for t hese activities are recovered under the Animal Welfare Export Certificate 
Regulations.   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   149 7.6 APPENDIX 2 – EXISTING AND PROPOSE D FEES UNDER ANIMAL WELFARE AC T 1999  
Fees are shown as GST exclusive.  
Shaded columns and headers are  for referencing and commentary purposes . Light grey shaded content is for new proposals . Additional line spacing and column/row lines have been 
added for readability.  
 
Animal Welfare Export Certificate Regulations 1999  
  Function, power, or duty for which fee or charge 
payable  Fee or charge   Fee or charge payable by  Proposed fee  Comment  
1 4 Animal welfare export certificate application fee  
The fee required by section 42(2)(c) of the Act to 
accompany an application for an animal welfare export 
certificate is $24  $21.33  Applicant (R5)  $21.33  No change proposed.  
 
 
 
2 
 
 
 
3 6 Basis of amount payable  
The amount of any costs payable under regulation 5 [costs 
of veterinarian employed by Ministry] is to be determined – 
(a) by applying an hourly rate to the time spent by the 
veterinarian in providing the services including – 
(i)  any waiting time; and  
(ii) any travelling time; and  
(b) by applying a mileage allowance to the distance 
travelled by the  veterinarian for the purpose of 
performing the services.     
 
 
(a) no change proposed  
 
 
 
(b) Per km charge as promulgated from 
time to time by the Commissioner 
of Inland Revenue under section 
DE12(3) of the Income Tax Act 
2007.  Common#2  
 
 
 
 
4 
 
5 7 Hourly rate  
The hourly rate that applies for the purposes of regulation 6 
[basis of amount payable] is, –  
(a) in the case of the time spent within usual hours, $96 
per hour; and  
(b) in the case of time spent outside usual hours, $143.40 
per hour.   
 
 
$85.33  per hour  
 
$127.47  per hour  Applicant (R5)  
  
 
 
$186.30 per hour  
 
$252.17 per hour    
150  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries    Function, power, or duty for which fee or charge 
payable  Fee or charge   Fee or charge payable by  Proposed fee  Comment  
 
 
 
 
 
6 
 
7 8 Calculation of costs at hourly rates  
 Subject to clause (2), any costs required to be 
determined under regulation 6(a) by applying an 
hourly rate specified in regulation 7 are calculated by 
adding –  
(a) one quarter of the hourly rate; and  
(b) the product of – 
(i) one quarter of the hourly rate; and  
(ii) the number (if any) of complete periods of 
15 minutes in excess of the first 15 minutes 
spent by the veterinarian on the matters 
specified in regulation 6(a); and  
(c) where any time in excess of the first 15 minutes 
spent by the veterinarian on the matters  
specified in regulation 6(a) is not an exact 
multiple of 15 minutes, one quarter of the 
hourly rate.     AWA#1  
All time spent by an 
officer or employee of 
the Ministry would be  
subject to :  
- minimum charge of 
one hour , plus 
- additional  hours 
charged at the 
relevant hourly rate 
in 15 -minute 
increments.  
8   Where time in excess of the first 15 minutes is spent 
by the veterinarian on the matters specified in 
regulation 6(a), the amount of the fee prescribed by 
regulation 4 must be deducted  from the amount of the 
costs calculated in accordance with sub clause (1) of 
this regulation.      
9 9 Mileage allowance  
The mileage allowance that applies for the purposes of 
regulation 6(b) is 54 cents a kilometre.  $0.48  per kilometre  Applicant (R5)  Per km charge  as promulgated from 
time to time by the Commissioner of 
Inland Revenue under section DE12(3) 
of the Income Tax Act 2007.  Common#2  
 
   
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   151 8 Cost recovery proposals under the Wine Act 2003  
8.1 OVERVIEW  
Wine is a growing export market. The Ministry continues to support development of the 
industry through administration of the Wine Export Certification System and standards setting 
for exports.  
This is the first review of fees in the Wine area since the introduction of the Wine Reg ulations 
2006. Wine -related activities are principally Crown -funded, with the Ministry providing a 
range of services under the Wine Act, including electronic certification of exports and 
overseas market access assistance.  
Revenue from wine -related activiti es in 2014/15 is forecast to total $0.170 million. The 
proposals contained in this document would result in forecast revenue for 2015/16 of $2.100 
million, primarily through a levy on export product.  
The main proposals are to : 
 introduce a levy to recover t he cost of domestic standard setting and compliance;  
 cease rebates that currently cover the cost of laboratory testing to support the issue of 
official assurances for specific export markets;  
 introduce a one cent per litre levy on wine exported, to cover export standards setting, 
market access, export certification/e -certification costs.  
8.2 ACTIVITIES UNDER THE  WINE ACT 2003  
The Wine Act 2003 requires the Minister for Food Safety and the Director -General of MPI to 
take all reasonable steps to ensure that, where funding for the wine regulatory programme is 
not provided for by the Crown, the direct and indirect costs of administering the Act are 
recovered through fees, levies, or otherwise.  
Cost recovery provisions are given effect through the making of regul ations. The cost 
recovery section of the Wine Regulations 2006 provides for the setting of fees and charges for 
costs to be recovered under the Wine Act, and for setting the timing of annual fee payments.28  
In 2006, the Government decided to continue provi ding Crown funding for export assurance , 
export standard setting  and market access  of $1.985 million per year.  At the time, the 
Government’s rationale for ma king the decision was that the w ine export sector was in its 
infancy and the costs to be recovered were small.  
At present, the Crown pays for:  
 policy advice in relation to the Wine Act and regulations made under it;  
 joint standard -setting for Australia and New Zealand;  
 multilateral standard -setting;  
 export standard -setting;  
 enforcement activities for non-compliance;  
 the administration of the Wine Export Certification Service  (Wine E -Cert) , includin g the 
cost of chemical analysis;  
 compliance and systems audit.  
                                                
28 The Wine Regulations provided for a fee of $68.63 per winery per annum for standard setting, which was set prior to the 
implementation of the Act in 2004.   
152  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  The wine industry pays for the New Zealand Standards programme.  In 2013/14, New Zealand 
Winegrowers paid MPI $151,000, whi ch equated to $216 per winery.  
Further information on MPI’s regulatory activities is provided in Appendix 1, section  8.14. 
8.3 CROWN FUNDING FOR THE WINE  REGULATORY PROGRAMME  
Continued funding of wine standard setting, market access and export assurances activities is 
inconsistent with the treatment of similarly regulated activities in the animal product export 
and plant export sectors.  
Costs for plant export sectors are recovered through administrative means as there is no 
primary legislation covering production and export of plants and plant materials. Approvals 
are funded by an application fee and hourly rate charges. New Zealand and export standard -
setting, market access and compliance and systems audit are funded using export certificate 
fees. Negotiations of equivalences are funded by an hourly rate.  
Continuing Crown funding for wine is also inconsistent with the Government’s policy  of 
using cost recovery to encourage efficient use of MPI’s resources by service users. In 
addition, the current system is administratively inefficient, as MPI rebates the cost of 
laboratory analyses of wine samples when an official assurance is required. This covers nearly 
5,000 wine samples each year.  
8.4 COST RECOVERABLE MPI ACTIVITIES UNDER THE  WINE ACT 2003  
MPI performs a  number of regulatory functions as part of the wine programme  that contribute 
to positive outcomes for the New Zealand wine industry. Cos ts recovered include the costs of 
administering the Wine Act and maintaining MPI’s ability to regulate the wine industry. 
Annual costs are calculated as a forecast average over a three -year period and then recovered 
on an annual basis.  
Winemakers and expor ters (who are not always winemakers) are the primary beneficiaries 
and users of the functions performed by MPI. The fundamental benefit to winemakers is 
being able to operate and produce wine that is ‘fit for its intended purpose’ and can then be 
sold in N ew Zealand and/or exported. Because some do not own the product they process, the 
benefit is not about adding value to product. The New Zealand Winegrowers 2014 Annual 
Report reports that there are 699 wineries in New Zealand. Of these, 614 fall into categ ory 1 
(small), 69 into category 2 (medium), and 16 into category 3 (large).29 
The wine regulatory work programmes, including the setting of standards and specifications 
under the Wine Act 2003, are established in consultation with industry. Consultation  is 
managed through regular dialogue with New Zealand Winegrowers, the Fruit Wine & Cider 
Makers Association and other key industry stakeholders.  
MPI also consults directly with industry representative bodies on specific work programme 
proposals.  
8.5 CESSATION OF REBATES FOR WINE SAM PLE TESTING  
Some export markets require an official assurance for New Zealand wine, which includes 
laboratory test results to verify compliance with the importing country’s standards and 
requirements. The amount and cost of export wine testing is directly related to the amount of 
wine exported.  
                                                
29 Small winery produces 0 -200,000 litr es per annum; a medium winery produces 200,001 litres to 2,000,000 litres per 
annum; and a large winery produces greater than 2,000,000 litres per annum.    
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   153 Wine companies pay laboratories for tests at the time of testing. MPI currently rebates wine 
businesses for the full cost of wine export tests, up to a capped limit of $160 per sample. A 
wine bus iness becomes eligible for this rebate at the point at which the results from these tests 
are used to support an official assurance. In 2014/15 MPI rebates are forecast at around $0.8 
million, for about 5,000 samples tests.  
Rebates were originally offered when New Zealand’s wine industry was in its infancy. The 
wine industry is now a mature industry and the condition for rebating no longer applies. The 
practice of rebating the cost of testing will cease from 1 July 2015.  
8.6 POLICY PROPOSALS   
Wine#1 – Charge for changes to  the recognised agency  (or person)  on a Wine Standards 
Management Plan  
Wine#2 – Charge for minor amendments to  a Wine Standards Management Plan  
Wine#3 – Recover costs  for processing a small winemaker exemption notification  
Wine#4 – Recover costs for verification, inspection and audit  
Wine#5 – Recover costs for New Zealand  Standards and Compliance functions via a levy  on 
New Zealand  Winegrowers  
Wine#6 – Recover the cost of f unding for  Export Standards setting , Market  Access and export 
certification costs  
Wine# 7 – Recover costs for wine E -Cert 
 
8.7 WINE#1 – CHARGE FOR CHANGES T O THE RECOGNISED AGENC Y (OR 
PERSON)  ON A WINE STANDARDS MANAG EMENT PLAN  
8.7.1 Background  
MPI incurs costs when change s to a recognised agency  (or person) on a wine standards 
manageme nt plan under the Wine Act 2003 are requested. These costs are  associated with 
updating databases, reissuing formal doc ument s, delegate sign -off and filing.  
8.7.2 Proble m definition  
Cost recovery is yet to be  implemented for process ing applications to change a recognised 
agency , or recognised person,  on a wine standards management  plan under the Wine Act 
2003.  
8.7.3 Proposed  cost recovery for processing chang es to  a recognised agency  (or person)  
on a wine standards management plan  
MPI proposes to establish a new fixed fee of $77.50 (based on half an  hour of billable time ), 
plus an hourly rate assessment charge  of $155, chargeable in 15 -minute increments after the 
first half hour . This rate would be included  in the Schedule of the Wine Regulations 2006 . 
The proposed cost recovery method and rate are consistent with the approach taken for 
approval, accreditation and recognition functions for other sectors.   
154  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  8.7.4 Questions  for considerati on 
Question 8.7 
1) Do you agree with the proposed method of charging for changes to the recognised 
agency (or person) on a wine standards management plan?  
2) If not, wha t is your preferred method of charging for changes to the recognised agency 
(or person) on a wine standards management plan, and what are the reasons for this 
preference?  
 
8.8 WINE#2 – CHARGE FOR MINOR AME NDMENTS TO  A WINE STANDARDS 
MANAGEMENT PLAN  
8.8.1 Background  
MPI proce sses notifications of  minor amend ments to  a wine standards management plan 
under section 2 3 of the Wine Act 2003 . MPI incurs costs associated with updating databases, 
reissuing formal doc uments , delegate sign -off and filing.  
8.8.2 Problem  definition  
Cost recovery is yet to be implemented for processing notifications of  minor amend ments to  a 
wine standards management plan under section 23 of the Wine Act 2003.  
8.8.3 Proposed charge for  minor amend ments to  a wine standards management plan  
MPI proposes to establ ish a new fixed fee of $77.50 (based on half an  hour of billable time ), 
plus an hourly rate assessment charge  of $155, chargeable in 15 -minute increments after the 
first half hour. This rate would be included  in the Schedule of the Wine Regulations 2006 . 
The proposed cost recovery method and rate are consistent with the approach taken for 
approval, accreditation and recognition functions for other sectors.  
8.8.4 Questions  for consideration  
Question 8.8 
1) Do you agree with the proposed method of charging for minor amendments to a wine 
standards management plan?  
2) If not, what is your preferred method of charging for minor amendments to a wine 
standards management plan, and what are the reasons for this preference?  
 
8.9 WINE#3 – RECOVER COSTS  FOR PROCESSING A SMALL WINEMAKER 
EXEMPTION NOTIFICATION S 
8.9.1 Background  
MPI processes small winemaker exemption notifications under clause 5A of the Wine 
Regulations 2006, including updating the exemption database and confirming the exemption.  
8.9.2 Problem definition  
Cost recovery has yet to be implemented for  processing small winemaker exemption 
notifications under clause 5A of the Wine Regulations 2006.    
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   155 8.9.3 Propos ed cost recovery for processing a small w inemaker exemption notification   
MPI proposes to establish a new fixed fee of $155 (based on an hour of billable time ), plus an 
hourly rate assessment charge  of $155, chargeable in 15 -minute increments after the first 
hour. This rate would be included  in the Schedule of the Wine Regulations 2006 . 
The proposed cost recovery method and rate are consistent with the approach taken for 
approval, accreditation and recognition functions for other sectors.  
8.9.4 Questions  for consideration  
Question 8.9 
1) Do you agree with the proposed method of charging for processing small winemaker 
exemption notifications ? 
2) If not, what is your preferred method of charging for  processing small winemaker 
exemption notifications , and what are the reasons for this preference?  
 
8.10 WINE#4 – RECOVER COSTS FOR VE RIFICATION, INSPECTI ON AND AUDIT  
8.10.1  Background  
MPI’s Wine Officers are empowered under the Wine Act 2003 to verify, inspect and audit . 
8.10.2  Problem  definition  
MPI cannot  recover  costs  for inspection or audit  
The current regulations do not allow cost recovery for inspection or audit. When compliance 
problems with an operator or exporter are detected, it may be necessary to inspect or aud it the 
operator and work with them to bring about compliance. These services are considered private 
goods and should therefore be cost -recoverable on that basis.  
MPI cannot recover costs for compliance follow -up 
As noted above, MPI may be required to work with individual operators to ensure 
compliance. This is an important activity for which we cannot recover costs under current 
regulations. Receiving this service is considered a private good, and the associated costs of 
providing it should be met by those who cause them to be incurred.  
MPI cannot recover costs  for verification  
The market for wine verification is contestable and serviced by the private sector. MPI has a 
role as a verifier of ‘last resort’ and must be able to provide verification services if required. 
To date, MPI has not been required to act as a verifier of last resort. Verification is considered 
a private good and is usually charged at an hourly rate, with other costs recovered as 
disbursements on an actual and reasonable basis.  
8.10.3  Proposed co st recovery for verification, inspection and audit under the Wine Act 2003  
MPI proposes to establish an hourly rate charge of $155 for cost recovery of verification, 
inspection, audit and other individual -focused compliance activities under the Wine Act. 
Disbursements associated with these activities would be recoverable on an actual and 
reasonable basis.    
156  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  8.10.4  Questions for consideration  
Question 8.10 
1) Do you agree with t he proposed method of charging for verification, inspection and 
audit services by Wine Officers?  
2) If not, what is your preferred method of charging for verification, inspection and audit 
services by Wine Officers, and what are the reasons for this preferenc e? 
 
8.11 WINE#5 – RECOVER COSTS FOR NE W ZEALAND  STANDARDS AND 
COMPLIANCE FUNCTIONS  VIA A LEVY  ON NEW ZEALAND WINEG ROWERS  
8.11.1  Background  
MPI performs a range of functions for the domestic wine sector , including provision of :  
 a New Zealand standard  setting programme;  
 a compliance programme.  
 
These functions are club or industry goods , and principally relate  to the making and 
processing of wine and wine products . 
The Wine Regulations 2006 enable MPI to recover an annual fee of $300 on wine businesses 
for standard  setting. These fees are not being charged currently because they are funded by 
the Crown . 
New Zealand Winegrowers Inc makes a voluntarily payment to MPI of $151,000 a year 
towards the cost of the New Zealand standards programme. No payment is made  by non -
grape wine producers. Compliance programme costs are currently Crown -funded, but in other 
areas prosecutions and investigations are Crown -funded while inspections and other operator -
specific monitoring activity are individually funded. Fifty percen t of MPI’s wine compliance 
resources for wine are spent on domestic compliance activities.  
Wine made from fruit other than grapes is also regulated under the Wine Act. Domestic grape 
wine sales as a proportion of total sales have decreased over the last t hree years from 97.9 
percent to the current 96.9 percent, while non -grape wine sales have increased from 2.1 
percent to the current 3.1 percent.  
The current levy on wine businesses prescribed in the regulations ha s never been enforced and 
may not be the mo st equitable method of recovery.  For example, the current fixed fee levy on 
wine businesses of $300 in the regulations has no correlation to domestic sales production, 
and therefore to the level of each operator’s benefit or use. Wine businesses selling la rge 
volumes of wine domestically would pay the same amount as wine businesses selling small 
volumes.  
8.11.2  Problem definition  
In determining the appropriate cost recovery method there are two questions to consider:  
 From whom should costs be recovered?  
 How should  costs be recovered?  
All New Zealand wine businesses benefit from provision of New Zealand standards and a 
robust compliance programme. There are two options for targeting cost recovery:  
 Target all wine businesses, including non -grape wine businesses.    
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   157  Targ et industry bodies such as New Zealand Winegrowers, an industry body representing 
grape growers and grape wine makers, and the Fruit Wine & Cider Makers Association of 
New Zealand In c. 
 
Options  
There are three main approaches for recovering costs, and a nu mber of options for how cost 
recovery is implemented:  
 Option 1: Continue negotiating voluntary payments from New Zealand Winegrowers Inc . 
 Option 2: Impose a levy on wine industry bodies.  
 
Option 2 would involve s etting an annual charge based on the direct and indirect costs of 
providing the New Zealand standards progr amme and the compliance programme. New 
Zealand Wine growers would administer collection of the levy. This would replace the 
voluntary payment of $151,000 currently paid by New Zealand Winegrowe rs with an amount 
based on a formula, which is likely to be around $330,000 in 2015; or  
 
 Option 3: Impose a levy on all wine businesses or holders of a wine standards 
management plan , using one of the following methods:  
a) a uniform fixed annual levy on wine businesses . 
b) a uniform fixed annual levy on holders  of a wine standards management plan . 
c) a differential levy  based on wine business output from the previous year. There would 
be three charges based on three  ranges of wine business output (0  to 200,000 litre s a 
year; 200,001 litres to 2,000,000 litres a year ; and greater than 2,000,000 litres a year).  
d) a levy on each litre of wine produced.  
 
Analysis of options  
An analysis of the options to fund New Zealand standards and compliance functions is 
provided in Table 13. 
Table 13: Options to fund New Zealand Standards and Compliance functions  
Option  Analysis  
Option 1: Continue 
negotiating voluntary 
payments from New Zealand 
Winegrow ers Inc  Continuing to negotiate voluntary payments from New Zealand Winegrowers would be 
administratively simple and effective at recovering the costs of the New Zealand standards 
programme and compliance programme. However, without a statutory mandate it creates a 
risk that funding could be withdrawn by New Zealand Winegrowers in future. Therefore this 
option is not preferred.  
Option 2: Impose a levy on 
wine industry bodies 
(preferred)  Imposing a levy on New Zealand Winegrowers would also be administratively simple and 
effective at recovering the costs of the New Zealand standards programme and compliance 
programme.  
New Zealand Winegrowers is funded by a levy on grape wine. Imposing a l evy is equitable 
as all wine growers and makers benefit from the New Zealand standards programme. 
Recovering a share of compliance costs through a levy and a share through direct operator 
costs encourages wine maker compliance to minimise costs. This appro ach has a slight risk 
in that New Zealand Winegrowers could cease operating and be unincorporated, and 
therefore MPI’s revenue security would be stopped. However, in our view, this risk is 
minimal.  
There are two key risks with this option:  
 Industry may not  agree to provide funding for New Zealand Winegrowers to pay the 
levy. 
 MPI could increase charges before New Zealand Winegrowers is able to adjust its levy 
to collect additional revenue from the industry to the meet the increased cost.  
Imposing a levy on t he Fruit Wine & Cider Makers Association is not feasible currently as  
158  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  the Association’s Commodity Levies Act 1990 Order has expired and the association 
cannot currently collect a levy from non -grape wine makers.  
Option 3: Impose a levy on 
all wine busines ses Imposing a uniform fixed levy on all grape wine businesses (699 in 2014) and non -grape 
wine businesses or, alternatively, holders of a wine standards management plan (239 in 
2014), would not be equitable as it would not reflect different levels of outp ut, benefit or 
contribution to risk.  
MPI’s preferred approach under this option would be to impose a levy on each litre of wine 
produced based on wine business output from the previous year. This approach would be 
the most equitable. However, it would impo se higher transaction and compliance costs than 
the alternative options would, particularly the option of collecting revenue directly from 
industry bodies, as it would require:  
 MPI to collect data and invoice each party;  
 operators to submit returns to MPI and process and pay MPI’s invoice.  
These costs could be minimised by coordinating cost recovery with the collection of 
revenue under the Commodity Levies (Wine grapes) Order 2010.  
Imposing a levy solely on the output of non -grape wine businesses to recoup  a 3.1 percent 
share of New Zealand Standards and compliance costs would not be efficient, as the 
collection and compliance costs would be disproportionately high relative to the revenue 
collected.  
8.11.3  Propos ed annual levy on New Zealand Winegrowers  
MPI’s preferred approach is to  establish an annual levy on New Zealand Winegrowers. The 
levy would be a set charge based on the direct and indirect costs of providing the New 
Zealand standards programme and 50 percent of  compliance costs30. The levy  amount rather 
than the formula  would be prescribed in the regulations.  
MPI prefers this approach because it is administratively simple and, compared with imposing 
a levy on all wine businesses, has significantly lower administrative costs and minimal 
additional compliance costs for the wine sector.  
For the present, MPI does not propose to impose a levy on the Fruit Wine & Cider Makers 
Association, nor does it propose to impose a levy on non -grape wine output as this would not 
be efficient. MPI notes that non-grape wine’s market share of domestic sales volumes is 
increasing. We will monitor development and reconsider imposing a levy if the Fruit Wine & 
Cider Makers Association resumes collecting a levy, or non -grape market share increases to 
the point where  it is efficient to levy non -grape wine businesses.  
8.11.4  Calculating the New Zealand Winegrowers levy  
For the purposes of calculating the annual levy, MPI would use a formula similar to the 
example provided below. However at this stage we are not proposing to build this formula 
into the regulations, as it may be necessary to modify our approach over time.  
         vy   y      y
                 g                             
 
Where,  
DI = Total d irect and indirect costs of the New Zealand Wine Standards P rogra mme . 
                                                
30 50% represents the estimated allocation of compliance service time between domestic and export focussed producers.    
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   159 Direct and indirect costs may include any accrued surpluses and deficits from the previous 
four years not already recovered  in line with section 87(3) .31 
C = Wine compliance costs  
Proposed notices  for 2015/16 annual levy on New Zealand Winegrowers  
The proposed annual levy payable by New Zealand Winegrowers for 2015/16 would be  
approximately $330,000.  
8.11.5  Questions for consideration  
Question 8.11 
1) Do you agree with the proposed method of cost recovery for standards and compliance 
functions for the domestic wine sector?  
2) If not, what is your preferred method of cost recovery for standard s and compliance 
functions for the domestic wine sector?  
 
8.12 WINE#6 – RECOVER THE COST OF FUND ING FOR  EXPORT STANDARDS 
SETTING , MARKET ACCESS AND EXPORT CERTIFICA TION COSTS  
8.12.1  Background  
Export standard setting, market access , wine export certification,  Wine E -Cert, and  
compliance and systems audit activities are club goods that are currently Cro wn-funded  
MPI’s performs a range of functions for the export wine sector, including:  
 the export standard setting programme;  
 the market access programme;  
 complia nce and systems audit activities related to export.  
These functions are mostly related to the export of wine and wine products, and are 
considered club or industry goods as consumption (use) by one person does not detract from 
consumption by another and us ers can be excluded from the benefits of consumption at low 
cost.  
There are two groups of beneficiaries from the services – wine businesses and overseas 
consumers.  
Charging wine businesses is more efficient than charging the consumers for several reasons:  
 Consumers are outside New Zealand’s jurisdiction while wine businesses are clearly 
identifiable.  
 Transaction and collections costs are significantly lower for collection from wine 
businesses, and wine businesses are well placed to pass the cost on to end consumers;  
 Wine businesses are better placed than overseas consumers to value and monitor the 
benefits of MPI services, relative to their cost.  
 Cost recovery from wine businesses incentivises industry to:  
- moderate demand for services;  
- implement effective r isk management to minimise the need for MPI services or 
interventions.  
                                                
31 MPI does not intend to implement cost recovery for any deficits incurred prior to 1 July 2015.   
160  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  The Wine Regulations 2006 allow MPI to recover an annual charge based on three ranges of 
wine business output (0 to 200,000 litres a year; 200,001 litres to 2 million litres a year; and  
greater than 2 million litres a year).  
These fees are not being charged currently because they are Crown -funded.  
8.12.2  Problem definition  
MPI proposes to introduce cost recovery for export standard setting and market access. The 
methods allowed under the curre nt regulations have never been implemented and may not be 
the most equitable or efficient approach.  
The cost recovery options are shown in Table 14. 
Table 14: Cost recovery options for standard setting, market access and Wine E -cert, and compliance 
systems audit  
Options  Analysis  
Option 1: Impose a flat levy on all wine 
exporters.  
 
 This approach would not be equitable as it would not be based on export volume and 
therefore would not reflect the value of the benefits received. It could potentially result in 
small exporters paying a disproportionately large share,  while large exporters pay a 
disproportionately small share.  
This option would be administratively efficient as MPI can efficiently identify and invoice 
all wine exporters.  
Option 2: Impose a levy on each litre of 
wine exported.  
The levy would be imposed on 
businesses exporting more than 10,000 
litres a year, to minimise administrative 
costs and ensure that MPI is not issuing 
levy invoices that amount to less than 
$100.  This option would be less equitable than Option 3 but more equitable than Option 1 as i t 
bands producers into groups based on a range of output, rather than targeting charges 
based on output.  
This option is administratively efficient as MPI can efficiently identify and invoice all wine 
businesses. This option may impose additional complianc e costs as it would require all 
wine businesses to make returns to MPI each year about their output. Wine businesses 
already provide returns to MPI and the New Zealand Customs Service, so providing 
additional returns to MPI would add a minimal cost.  
Optio n 3: Recover costs through Wine E -
Cert for:  
 confirmation of export 
eligibility;  
 determination of 
consignment export 
eligibility;  
 issue of official 
assurances;  
 processing requests to 
amend, revoke or reissue 
an official assurance.  This approach would not b e equitable as it would not be based on export volume and 
therefore would not reflect the value of the benefits received. It could potentially result in 
small exporters paying a disproportionately large share, while large exporters pay a 
disproportionately  small share.  
This option is more administratively efficient and would have lower transaction costs than 
the alternative options would. All exporters would use Wine E -Cert and be required to 
pay associated costs. Recovering other costs associated with expo rt standard  setting, 
market access and compliance and system audit through this mechanism would have a 
low marginal cost. This option would also impose significantly fewer compliance costs on 
businesses as they would not need to make returns to MPI or fund  an MPI cost recovery 
audit programme.  
 
The option of imposing a levy on New Zealand Winegrowers was not pursued as MPI is 
better placed to collect a levy.  
8.12.3  Propos ed levy on each litre  of wine exported  
MPI proposes to  impose a levy on each litre of wine exported.  The amount recovered would 
be in the order of  one cent per litre in 2015 . 
The levy would be imposed on applicants for export consignment approval. This means that 
wine businesses whose product is exported would be liable to pay the levy. Wine bus inesses 
that make applications on behalf of third parties wishing to export their wine would need to 
make a commercial decision as to whether, and how, to pass on that cost.    
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   161 This approach is preferred because i t is equitable, administratively efficient and  has relatively 
low transaction and co mpliance costs for the sector.  
8.12.4  Calculating the levy  
For the purposes of calculating the annual levy, MPI would use a formula similar to the 
example provided below. However at this stage we are not proposing to build th is formula 
into the regulations, as it may be necessary to modify our approach over time.  
  vy                                            
               
 
Where,  
EC = sector contribution to total export cost = (total direct and indirect Wine Market Access 
costs + total direct and indirect Wine Export Standard Setting costs + total direct and indirect 
Wine Export Certification costs + 50 percent of total direct and indirect Compliance 
Programme costs)32 
       = total annual volume o f wine in litres exported by a wine businesses exporting more 
than 10,000 L per annum (in the previous year).  
Proposed amount of 2015/16 levy on wine litres exported  
The proposed levy for 2015/16 would be approximately 1  cent per litre . 
8.12.5  Questions for cons ideration  
Question 8.12 
1) Do you agree with the proposed method of cost recovery for export -related functions in 
the wine sector?  
2) If not, what is your preferred method of cost recovery for export -related functions in the 
wine sector?  
 
8.13 WINE# 7 – RECOVER COSTS FOR WINE E -CERT  
8.13.1  Background  
Wine E -Cert is a private good that is currently Crown -funded  
All grape wine exported from New Zealan d must meet the export eligibility requirements that 
are set under the Wine Act 2003. These requirements ensure that the safety, traceability and 
quality of wine exported from New Zealand are maintained.  
MPI uses the Wine Export Certification Service (WECS ) to process applications to determine 
whether wine is eligible for export  and issues export eligibility statements for each 
consignment of wine to confirm that eligibility. MPI also issues official assurances for some 
countries where overseas market acces s requirements have been agreed between New Zealand 
and overseas governments. An official assurance confirms that the wine exported from New 
Zealand meets the requirements of the importing country.  
                                                
32 Direct and indirect costs may include any accrued surpluses and deficits from the previous four years not already recovered 
in line with section 87 (3).  MPI does not intend to implement cost recovery for any costs incurred prior to 1 July 2015.   
162  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  MPI has re -developed the information technology system use d for wine export certification 
(Wine E -Cert) to manage the risks of system failure arising from the age of the existing 
system, and to enhance the capability of the system to keep up with evolving trade practices.  
Wine E -Cert services are considered priva te goods but are not currently cost -recovered. The 
Schedule in the Wine Regulations 2006 allows MPI to recover the costs of Wine E -Cert 
through. Table 15 sets out the current charges that were promulgated in 2006, but have never 
been charged.  
Table 15: Cost recovery options Wine E -cert 
Matter  in respect  of which  fee or charge  payable  Cost  recovery  
method  Fee or 
charge  $ 
Application to determine whether wine eligible for export  per application  20.68  
Statement of confirmation that wine eligible for export  per confirmation  5.91 
Issue of official assurance  per certificate  8.82 
8.13.2  Problem definition  
Current cost recovery items do not encourage efficient use of MPI’s resources or support 
equity  
The current Wine E -Cert cost recovery items in the Wine Regulations 2006 wil l enable MPI 
to recover costs. However, the current items could be refined to encourage efficient use of 
MPI’s resources and to more accurately charge users for the marginal costs of using MPI’s 
services. More accurate charging supports equity as it reduces the risk that other exporters  
will have to cross -subsidise services  demanded by other exporters . 
The areas w here more targeted cost recovery is needed are as follows:  
 export eligibility statements based on sensory testing, chemical testing or both, and 
subsequent amendment s differenti ation needed because chemical testing incurs greater 
costs for MPI associated with MPI’s E -Star information system;  
 issue of official assurance s and subsequent amendment s;  
 processing requests to  revoke or reissue an official assurance  that take more than 15 
minutes, which is a good proxy for the average amount of time it takes MPI to issue an 
official assurance.  
 
Options  
MPI considered three options:  
 Option 1: maintain the status quo.  
 Option 2: enhance the charging regime for Wine E -Cert.  
 Option 3: recove r Wine E -Cert costs via the levy on exports.  
MPI’s preferred option is Option 3, to recover the costs of Wine E -Cert through the 
levy as it has lower transaction and administrative costs for MPI and industry and is 
relatively equitable as it requires expor ters to pay the costs for Wine E -Cert based on 
their share of exports. Option 2 would encourage more efficient use of Wine E -Cert 
but has higher transaction and administrative costs for MPI and industry. MPI intends 
to monitor industry’s use of Wine E -Cert following the introduction of cost recovery 
and will propose a more detailed charging regime for E -Cert if necessary.    
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   163 8.13.3   Proposed changes to recover costs for  items  for export assurance  
MPI proposes to recover the costs of Wine E -Cert through the levy on ex ports.  
8.13.4  Questions for consideration  
Question 8.13 
1) Do you agree with the proposal to recover Wine E -cert costs through the (proposed) 
levy on exports?  
2) If not, what is your preferred method of cost recovery for Wine E -cert costs?   
164  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  8.14 APPENDIX 1  – MPI ACTIVITIES UNDER  THE WINE ACT 2003  
8.14.1  New Zealand  standards programme  
The Ministry  develops , implements, monitors,  and reviews safety and composition standards 
for the production, processing, transportation, storage , and sale of food and food -related 
products in New  Zealand. This includes the following activities related to both grape and fruit 
winemaking : 
 administering the Wine Act 2003 ; 
 reviewing  and maintaining standards for  wine, including prescribing minimum 
percentages of inputs required to label or identify wine in terms of vintage, variety , or area 
of origin  (grape wine only) ; keeping records and mak ing returns as a means of ensuring 
the truthfulness  of information, integrity of processes, and safety of wine;  
 developing and reviewing guidance material to assist wineries to comply with safety and 
labelling standards ; 
 reviewing and updating the Code s of Practice for w ine standards management plans for 
grape wine and for fruit wine, cider and mead;  
 providing advice to winemakers and verifiers on meeting legislative requirements;  
 managing recognition of agencies and persons for verification activities with  respect to 
wine standards management plans;  
 reviewing and maintaining  verification requirements to ensure that standards are met ;  
 reviewing and monitoring winemakers and verifiers’ compliance with standards . 
8.14.2  Export standards p rogramme  
The Ministry  develo ps, implements , monitors and reviews  systems , standards  and processes 
for export food and food -related products.  It also develops and implements verification 
standards and verification processes for export requirements, and manages the provision of 
officia l assurances for  grape  wine exports, including overseeing the administ ration of  the 
export eligibility system . This includes the following activities:  
 administering  export components of the Wine Act ; 
 managing recognition of recognised laboratories for expo rt laboratory analysis ; 
 monitoring performance of recognised laboratories;  
 managing the contract for w ine export certification with New Zealand Winegrowers;  
 managing the contract for  the random sampling programme for export ; 
 monitoring and managing the out puts from the random sampling programme;  
 providing export advice  to industry operators;  
 developing  and maint aining  the electronic platform for wine export certification ; 
 reviewing and monitoring wine business operators  and verifiers ’ compliance  with export 
standards . 
8.14.3  Market access p rogramme  
The Ministry  negotiates market access conditions and establishes overseas market access  
requirements (OMARs) with the relevant authorities of countries importing New Zealand 
products  on behalf of exporters . This includes managing bilateral agreements, trading partner 
relationships , and equivalency negotiations.  
The market access programme also provides strategic and operational input into the export 
standards programme, as it affects trade and MPI’s  bilateral  relationships.    
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   165 MPI also provides regulatory input into pluri -lateral forums such as the World Wine Trade 
Group and the APEC Wine Regulatory Forum, which have a focus on regulatory alignment to 
improve trade in wine, and the International Organisation of W ine and Vine (OIV) which, 
although not a standard setting body, does establish resolutions that are sometimes adopted 
into EC regulation.  
8.14.4  Compliance and system audit  
The functions that the Ministry  perform s in this area include : 
 responding to and managing critical non -compliance;  
 regularly collecting and assessing information to check complian ce with regulatory 
requirements;  
 random sampling and testing of products across the spectrum ;  
 monitoring and assessing recognised agencies and persons ; 
 scheduled audi ting of industry or business systems and processes ; 
 responding to  inquiries and providing information to industry on compliance . 
  
166  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  8.15 APPENDIX 2 – EXISTING AND PROPOSE D FEES UNDER THE WIN E ACT 2003   
Fees are shown as GST exclusive.  
Shaded columns and headers are  for referencing and commentary purposes . Light grey shaded content is for new proposals . Additional line spacing and column/row lines have been 
added for readability.  
 
Wine Regulations 2006  
Schedule – Fees and charges  
  Matter in re spect of which fee or charge 
payable  Cost recovery method  Fee or charge   Proposed fee  Comment  
1 
2 
 
3  Registration of wine standards management 
plan based solely on template approved by 
Director -General  Fixed charge plus hourly rate  $122.00 , plus  
$122.00  per hour (or part 
hour) after the first hour  - $155.00, plus  
- $155 per hour  after the first hour, in 
15-minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application 
and any remainder payable within 1 
month.  Updated rates  
 
 
Common#4  
4 
5 
 
6  Registration of wine standards management 
plan not based solely on approved template  Fixed charge plus hourly rate  $122.00 , plus  
$122.00  per hour (or part 
hour) after the first hour  - $155.00, plus  
- $155 per hour  after the first hour, in 
15-minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application 
and any remainder payable within 1 
month.  Updated rates  
 
 
Common#4  
7 
8 
 
9  Registration as an exporter under section 49 
of Act  Fixed charge plus hourly rate  $122.00 , plus  
$122.00  per hour (or part 
hour) after the first hour  - $155.00, plus  
- $155 per hour  after the first hour, in 
15-minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application 
and any remainder payable within 1 
month.  Updated rates  
 
 
Common#4    
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   167   Matter in re spect of which fee or charge 
payable  Cost recovery method  Fee or charge   Proposed fee  Comment  
10 
11 
 
12  Application for amendment to wine 
standards management plan under section 
22 of Act  Fixed charge plus hourly rate  $122.00 , plus  
$122.00  per hour (or part 
hour) after the first hour  - $155.00, plus  
- $155 per hour  after the first hour, in 
15-minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application 
and any remainder payable within 1 
month.  Updated rates  
 
 
Common#4  
13 
14 
 
15  Recognition of agency or person under 
section 69 or 70 of Act  Fixed charge plus hourly rate  $122.00 , plus  
$122.00  per hour (or part 
hour) after the first hour  - $155.00, plus  
- $155 per hour  after the first hour, in 
15-minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application 
and any remainder payable within 1 
month.  Updated rates  
 
 
Common#4  
16 
17 
 
18  Periodic recognition fee under section 77 of 
Act Fixed charge plus hourly rate  
 
 
 $122.00 , plus  
$122.00  per hour (or part 
hour) after the first hour  - $155.00, plus  
- $155 per hour  after the first hour, in 
15-minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application 
and any remainder payable within 1 
month.  Updated rates  
 
 
Common#4  
19  Application to determine whether wine 
eligible for export  Per application  $21.00   Wine#7  
Change to recovery of 
wine export certification 
costs through a levy on 
grape wine exports.  
20  Statement of confirmation that wine eligible 
for export  Per confirmation  $6.00  Wine#7  
Change to recovery of 
wine export certification 
costs through a levy on 
grape wine exports.  
21  Issue of official assurance  Per certificate  $8.96  Wine#7  
Change to recovery of 
wine export certification 
costs through a levy on 
grape wine exports.   
168  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries    Matter in re spect of which fee or charge 
payable  Cost recovery method  Fee or charge   Proposed fee  Comment  
22  Standards setting; development of guidance 
material, templates, codes of practice, 
market access standards; systems audit and 
compliance  Fixed annual charge, per wine 
business  $266.67  Annual levy on New Zealand 
Winegrowers of $330,000  Wine#5  
Change to recovery of 
domestic standards costs 
via a levy on NZ 
Winegrowers.  
 
 
23 
 
24 
 
 
 
25 
  Development of market access standards 
and programme  Differential annual charge, per 
exporting winery:  
(a) large winery (production over 2 
million litres per annum)  
(b) medium winery (production of 
200 001 litres or more per 
annum, but less than 2 million 
litres)  
(c) small winery (production less 
than 200 000 litres per annum)   
 
$7,196.00  
 
$523.00  
 
 
 
$43.00  Annual levy of $0.01 per litre of wine 
exported, for businesses exporting more 
than 10,000 L per annum  Wine#6  
Wine#7  
 
 
 
 
 
 
 
 
26 
27 
 
28     Performance of a function, power or 
duty that is:  
 required to be undertaken under the 
relevant Act, including subsidiary 
regulations and notices;  
 not prescribed elsewhere in the 
relevant cost recovery regulations.  
- $155.00, plus  
- $155 per hour  after the first hour, in 
15-minute increments, plus  
- actual and reasonable costs . Common  #5 
 
 
 
 
29 
30 
 
31     Verification, inspection, audit and other 
individual -focused compliance 
activities under the Act:  
- $155.00, plus  
- $155 per hour  after the first hour, in 
15-minute increments, plus  
- actual and reasonable costs  
Payable within 1 month.  Wine#4    
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   169   Matter in re spect of which fee or charge 
payable  Cost recovery method  Fee or charge   Proposed fee  Comment  
 
32 
33 
 
34     Compliance follow -up fee:  
- $155.00, plus  
- $155 per hour  after the first hour, in 
15-minute increments, plus  
- actual and reasonable costs  
Payable within 1 month.  Wine#4  
 
 
 
35 
36 
 
37 
     Processing small winemaker exemption 
notifications under clause 5A of Wine 
Regulations  
- $155.00, plus  
- $155 per hour  after the first hour, in 
15-minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application 
and any remainder pa yable within 1 
month.  Wine#3  
 
 
 
38 
39 
 
40 
     Processing amendments to a wine 
standards management plan under 
section 23 of the Act:  
- $77.50 , plus  
- $155 per hour  after the first hour, in 
15-minute increments, plus  
- actual and reasonable costs  
Payable by the  applicant on application 
and any remainder payable within 1 
month.  Wine#2  
 
 
 
41 
42 
 
43 
     Processing changes to a recognised 
agency on a wine standards 
management plan under section 23 of 
the Act:  
- $155.00, plus  
- $155 per hour  after the first hour, in 
15-minute increments, plus  
- actual and reasonable costs  
Payable by the applicant on application 
and any remainder payable within 1 
month.  Wine#1  
  
170  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  9 Proposals that impact across multiple cost recovery regimes  
9.1 BACKGROUND  
The current structure of the Ministry is a result of the merger of different agencies that 
administered a range Acts that provide for cost recovery. Because of this there are differences 
in the approach to cost recovery between sectors.  
Some cost recovery issues, or features of them, are common across the different cost recovery 
regimes. The Ministry is therefore proposing to amend multiple sets of regulations at the 
same time to standardise some approaches to cost recovery, and the language u sed to describe 
them.  
As a means of seeking feedback from all affected sectors, these multi -regime issues have 
grouped for consultation purposes. Implementation for individual cost recovery regimes will 
be through the Regulations made under the authority o f individual Acts.  
9.2 POLICY PROPOSALS  
Common#1 – Align hourly rate charges  
Common#2 – Use Inland Revenue Department vehicle mileage rates  
Common#3 – Recover costs for support staff involved in specialist services  
Common#4 – Recover other costs incurred by MPI  
Common#5  – Charge for performance of function, power or duty under the Act, Regulations 
and Notices not prescribed elsewhere  
Common#6 – Correct use of the term ‘l evy’ 
Common#7 – Update references to recognised persons and agencies  
Common#8 – Align veterinary professional rates across biosecurity and food regulations  
 
9.3 COMMON#1 – ALIGN HOURLY RATE CH ARGES  
9.3.1 Background  
The food safety cost recovery regulations prescribe hourly rate charges using a number of 
different approaches, for example:  
 Animal Products  (Fees, Charges, and Levies) Regulations – one hour of time, with time 
thereafter charged on the basis of an assessment charge  at hourly increments until the last 
half hour, which is done in 15 minute increments;  
 Animal Products (Dairy Industry Fees and Ch arges) Regulations 2007 – similar approach, 
but prescribed in a different manner;  
 Agricultural Compounds and Veterinary Medicines (Fees and Charges) Regulations 2002 
– different approach;  
 Animal Welfare Export Certificate Regulations 1999 – different approach.  
9.3.2 Regimes affected by this proposal  
This change would apply to the following regulations:    
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   171  Animal Product s (Fees, Charges, and Levies) Regulations 2007 ; 
 Animal Product s (Dairy Industry Fees and Charges) Regulations 2007 ; 
 Agricultural Compounds and V eterinary  Medicines (Fees and Charges) Regulations 
2002;  
 Animal Welfare Export Certificate Regulations 1999;  
 Wine Regulations 2006.  
9.3.3 Problem definition  
The different hourly rate charging approaches under each set of regulations adds complexity 
for staff p erforming similar functions under the different Acts as they may be required to 
follow different administrative processes for charging for services under each Act.  
Options considered  
The Ministry considered two options:  
 Option 1 ─ maintain the status quo ( inconsistent wording across multiple regulations).  
 Option 2 ─ adopt a common approach across regulations, to the extent possible.  
MPI’s preferred approach is to establish a common approach across regulations. This will 
help to ensure consistency (and there by promote efficiency) for staff performing similar 
functions under the different Acts.  
The majority of cost -recoverable activity falls under the Animal Products Act 1999. 
Extending the approach prescribed in Part 1 and Part 2 of Schedule 1, of the Animal Products 
(Fees, Charges, and Levies) Regulations 2007 to regulations under other Acts is considered 
the most appropriate approach to take. A minimum charge of one hour also allows for the 
administrative costs associated with invoicing and collection.  
9.3.4 Propo sed alignment of hourly rate charging approach in keeping with the animal 
products fees  
All time  spent by an officer or employee of the Ministry  would be chargeable at:  
 a minimum charge of one hour, at the appropriate rate for the activity;  
 an hourly rate, charged in 15 -minute increments, for any time in excess of the first hour.  
The Ministry proposes to apply this approach to the following regulations, with any necessary 
modifications:  
 Animal Product s (Fees, Charges, and Levies) Regulations 20 07; 
 Animal Product s (Dairy Industry Fees and Charges) Regulations 2007 ; 
 Agricultural Compounds and Veterinary  Medicines (Fees and Charges) Regulations 
2002;  
 Animal Welfare Export Certificate Regulations 1999;  
 Wine Regulations 2006.  
9.3.5 Questions for consider ation  
Question 9.3 
1) Do you support the adoption of a common approach for hourly rate charging under the 
various food sector cost recovery regimes?  
2) If not, what is yo ur preferred approach for each of the food sector cost recovery 
regimes, and what are your reasons for this preference?   
172  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries   
9.4 COMMON#2 – USE INLAND REVENUE D EPARTMENT VEHICLE MI LEAGE 
RATES  
9.4.1 Background   
The Ministry recovers vehicle costs using mileage rates prescribed in the regulations for each 
regime. A number of different rates are currently in force, and these rates can quickly become 
out of date.  
Similarly, the various regulations prescribe the bases for recovery of other costs incurred by 
the Ministry w hen delivering services to users.  
The Inland Revenue Department (IRD) collects data on the costs of operating a motor 
vehicle, and the Commissioner promulgates a standard vehicle mileage rate under section 
DE12(3) of the Income Tax Act 2007.  
The Ministry proposes to remove ‘static’ references in the current regulations and adopt the 
periodic rate promulgated by the Commissioner of Inland Revenue.  
9.4.2 Regimes affected by this proposal  
This change would apply to the all cost recovery regulations:  
 Biosecurity (Co sts) Regulations 2010 ─ veterinary inspectors only;  
 Animal Product s (Fees, Charges, and Levies) Regulations 2007 ; 
 Animal Product s (Dairy Industry Fees and Charges) Regulations 2007 ; 
 Agricultural Compounds and Veterinary  Medicines (Fees and Charges) Regulat ions 
2002;  
 Animal Welfare Export Certificate Regulations 1999;  
 Wine Regulations 2006.  
9.4.3 Problem definition  
The vehicle mileage rates are prescribed in various regulations and quickly become out of 
date. MPI’s  collective employment agreement with its verifiers and some other staff provides 
for charging at the rate published by the Commissioner of Inland Revenue under section DE 
12 (3) of the Income Tax Act 2007. The current rate33 is $0.77 cents per kilometre.  
The difference in employment agreement rates and the regulated rates for mileage and other 
costs can also lead to a discrepancy in the costs the Ministry recovers from service users and 
the reimbursements made to Ministry staff for some activities.  
9.4.4 Propose d change to a common approach for mileage rates and the recovery of any 
other travel costs  
MPI proposes to a mend  various regulations to provide for  cost recovery of motor vehicle 
costs at the  rate promulgated from time to time by the Commissioner of Inland  Revenue 
under section DE 12 (3) of the Income Tax Act 2007 . 
This proposal would apply to the travel costs for veterinary inspectors only in the Biosecurity 
(Costs) Regulations 2010.  
                                                
33 http://www.ird.govt.nz/technical -tax/op -statement s/os-review -milage -rate-2014.html    
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   173 This proposal will support efficiency and equity.  
9.4.5 Questions for considera tion 
Question 9.4 
1) Do you agree with the proposal to harmonise vehicle mileage rates and other travel 
costs across the various cost recovery regimes?  
2) Do you agree w ith the use of the mileage rate promulgated from time to time by the 
Commissioner of Inland Revenue under section DE12(3) of the Income Tax Act 2007?  
3) If not, what  is your preferred approach to mileage rates for each cost recovery regime, 
and what are your reasons for th ese preference s? 
 
9.5 COMMON#3 – RECOVER COSTS FOR SU PPORT STAFF INVOLVED  IN 
SPECIALIST SERVICES  
9.5.1 Background  
Support staff  members  within the Ministry  perform  essential but non -specialist services that 
support the delivery of specialist certification. This includes the maintenance and 
administration of registers and the preparation and filing of documents.  
MPI is able to recover costs for these services, but no  mechanism currently exists in the 
various regulations to do this.  
9.5.2 Regimes affected by this proposal  
This change would apply to the following regulations:  
 Biosec urity (Costs) Regulations 2010;  
 Animal Product s (Fees, Charges, and Levies) Regulations 2007 ; 
 Animal Product s (Dairy Industry Fees and Charges) Regulations 2007 ; 
 Agricultural Compounds and Veterinary  Medicines (Fees  and Charges) Regulations 
2002;  
 Animal Welfare Expor t Certificate Regulations 1999;  
 Wine Regulations 2006.  
9.5.3 Problem definition  
By way of example, as part of the process for issuing live animal and germplasm export 
certificates, MPI support staff prepare paper export certificates that are issued by recognised 
persons. This practice is more cost -effective than using specialist recog nised persons, and 
allows recognised persons to focus on technical matters instead of administration.  
Part 8 of the Animal Product (Fees, Charges, and Levies) Regulations 2007 does not include 
a provision for MPI to recover the costs of non -recognised pers ons involved in specialist 
functions and activities necessary for the export of live animals or germplasm. Consequently, 
MPI cannot full y recover  the cost  of these services.  
This problem could be resolved by only using expert staff whose time can be cost -recovered 
for undertaking this work, but this is a very inefficient use of their time. Another option 
would be to build administration time into levies, but this does not apportion the costs as 
directly as a fee to that person or group who caused the costs to be incurred.  
A similar problem exists for other cost recovery regimes.   
174  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  9.5.4 Proposed charges for support staff involved in export certification  
MPI proposes to create a new cost reco very item in  each of  the relevant r egulations to allow 
MPI to recover for ti me spent by other employees undertaking  functions and activities 
necessary for the production of certificates or provision of expert services . 
9.5.5 Questions for consideration  
Question 9.5 
1) What is your preferred method for cost recovery of support staff time across the various 
cost recovery regimes?  
2) If you prefer different methods for individual cost recovery regimes, what are these 
methods and what are your reasons for these preferences?  
 
9.6 COMMON#4 – RECOVER OTHER COSTS INCURRED BY MPI  
9.6.1 Background  
Other costs include incidental and additional costs that the Ministry incurs during the delivery 
of services to users. These costs are often unpredictable and vary depending on the nature of 
the service provided.  
These costs include categories such as external review, expert review, notification, product 
testing, travel and accommodation, as well as disbursements such as photocopying, printing 
and stationery, phone, fax, video co nferencing, postage and courier charges.  
9.6.2 Problem definition  
Inconsistent regulatory approaches add administrative complexity, particularly for staff that 
work across multiple regimes.  
9.6.3 Proposed charges for support staff involved in export certification  
MPI proposes that a ctual and reasonable costs incurred by an officer or employee of the 
Ministry may be recovered when  they arise from : 
 a request by the operator of a risk management programme , or other processor;  
 an act , or omission , of an operator or process or. 
MPI proposes that recoverable costs include, but not be limited to, costs such as external 
review , expert review , notification , product testing , travel and accommodation , as well as 
disbursements such as  photocopying , printing and stationery , phone, fax, video conferencing , 
postage and courier  charges . 
MPI proposes that a common approach for recovering other costs be applied to the following 
regulations, with any necessary modifications:  
 Biosec urity (Costs) Regulations 2010;  
 Animal Product s (Fees, Charges, and Levies) Regulations 2007 ; 
 Animal Product s (Dairy Industry Fees and Charges) Regulations 2007 ; 
 Agricultural Compounds and Veterinary  Medicines (Fees  and Charges) Regulations 
2002;  
 Animal Welfare Export Certificate Regulations 1999;  
 Wine Re gulations 2006.    
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   175 9.6.4 Questions for consideration  
Question 9.6 
What is your preferred approach for the recovery of incidental costs incurred by the Ministry 
for delivery of services to users for each cost recovery regime (or for all cost recovery 
regimes )? 
 
9.7 COMMON#5  – CHARGE FOR PERFORMANC E OF FUNCTION, POWER  OR 
DUTY UNDER THE ACT, REGULATIONS AND NOTI CES NOT PRESCRIBED 
ELSEWHERE  
9.7.1 Background  
MPI provides a range of functions, powers and duties under various Acts , and subsidiary 
regulations and notices  and standards . The various cost recovery regulations prescribe fees, 
charges and levies for specific f unction s, power s or duties under the  relevant  Act, regulations 
and notices . 
Item 23 of the Schedule of the Biosecurity (Costs) Regulations 2010 enables MPI to recover 
the costs of p erforming a function, power, or duty — 
- required to be undertaken under the Act or regulations made under the Act; and  
- not prescribed elsewhere in the Sc hedule . 
The item is payable as an hourly rate for each adviser involved and is payable by the person 
whose actions resulted in the specific f unction , power or duty being required.  
The Ministry is proposing to adopt this approach for other cost recovery regimes.  
9.7.2 Problem definition  
The Ministry currently cannot charge for the exercise of functions, powers or duties under 
Acts, regulations and notices unless they are prescribed for that regime.  
It is not practical or possible to specify all of MPI’s functio ns, powers or duties under all Acts 
and subsidiary regulations and notices, or the associated fees or charges for them, in an 
exhaustive manner. There are two main reasons:  
 The Ministry was not aware of the function, power or duty when the regulations were  
promulgated.  
 The function, power or duty under the Acts, and subsidiary regulations and notices is 
new. For example, halal -related services were not included in the Animal Product (Fees, 
Charges, and Levies) Regulations 2007, and were subsequently added b y the Animal 
Products (Overseas Market Access Requirements for Halal Assurances) Notice 2013.  
MPI’s inability to recover costs for the exercise of functions, powers or duties under the Acts 
and subsidiary regulations and notices is causing it to under -recover the cost of delivering 
these services.  
9.7.3 Proposed fees for performance of function, power or duty under the Act, Regulations 
and Notices not prescribed elsewhere  
The Ministry proposes to include cost recovery for p erformance of a function, power or duty 
that is:   
176  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries   required to be undertaken under the relevant Act , including subsidiary regulations and 
notices ; 
 not prescribed elsewhere  in the relevant cost recovery regulations.  
The hourly rate would be the relevant rate for other services provided under the e mpowering 
Act. MPI proposes that this approach be applied to the following regulations, with any 
necessary modifications:  
 Animal Product s (Fees, Charges, and Levies) Regulations 2007 ; 
 Animal Product s (Dairy Industry Fees and Charges) Regulations 2007 ; 
 Agricultural Compounds and Veterinary  Medicines (Fees  and Charges) Regulations 
2002;  
 Animal Welfare Export Certificate Regulations 1999;  
 Wine Regulations 2006.  
The item would be payable by the person whose actions resulted in the specific f unction , 
power or duty being required.  
This proposal would support equitable cost  recovery and efficient service delivery.  
9.7.4 Questions for consideration  
Question 9.7 
What is your preferred method of cost recovery for time spent performing functions, powers 
or duties not specified elsewhere for each cost recovery regime (or for all cost recovery 
regimes)?  
 
9.8 COMMON#6 – CORRECT USE OF THE T ERM ‘L EVY’ 
9.8.1 Background  
MPI imposes levies on some products to fund industry good services. For historic reasons, 
when some cost recovery regulations were created, certain charges (industry goods) were 
described in regulatio ns as ‘standard’ charges, when from a legal perspective these are 
actually levies.  
9.8.2 Regimes affected by this proposal  
This change would affect the:  
 Animal Product s (Fees, Charges, and Levies) Regulations 2007 ; 
 Animal Product s (Dairy Industry Fees and Charg es) Regulations 2007 ; 
 Agricultural Compounds and Veterinary  Medicines (Fees  and Charges) Regulations 
2002;  
 Animal Welfare Expor t Certificate Regulations 1999;  
 Wine Regulations 2006.  
9.8.3 Problem definition  
The regulations inappropriately describe certain cost recovery items as ‘fees’ and ‘charges’ 
when, in law, they are ‘levies’.  
The options are:  
 Option 1: maintain the status quo;    
Ministry for Primary Industries   Consultation Paper on Proposed Revisions to the Cost Recovery Regime   177  Option 2: update the descriptions.  
The Ministry’s preferred approach is to update the descriptions to remove ambiguity and 
clarify t he application of the various types of charges.  
9.8.4 Proposed re -categorisation of fixed fees as levies  
MPI proposes to change the terminology used for items recovering industry good costs in the 
various regulations from ‘fees’ or ‘charges’ to the legally corre ct term ‘levies’. This proposal 
involves no changes to fees.  
9.8.5 Questions for consideration  
Question 9.8 
Do you have any concerns about the proposed clarification of use of the term ‘levy’?  
 
9.9 COMMON#7 – UPDATE REFERENCES TO  RECOGNISED PERSONS A ND 
AGENCIES  
9.9.1 Background  
The Agricultural Compounds and Veterinary Medicines Act 1997, Animal Products Act 
1999, and Wine Act 2003 have been amended since the relevant cost recovery regulations 
were last reviewed.  
9.9.2 Regimes affected by this proposal  
This change would affect the:  
 Animal Product s (Fees, Charges, and Levies) Regulations 2007 ; 
 Animal Product s (Dairy Industry Fees and Charges) Regulations 2007 ; 
 Agricultural Compounds and Veterinary  Medicines (Fees and Charges) Regulations 
2002;  
 Animal Welfare Export Certificate Regulations 1999;  
 Biosecurity (Costs) Regulations 2010;  
 Wine Regulations 2006.  
9.9.3 Problem definition  
The references in regulations to the relevant part s of the Agricultural Compounds and 
Veterinary  Medicines Act 1997, Animal Products Act 1999, and Wine Act 2003 relating to 
recognised persons and agencies are out of date.  
9.9.4 Proposed amendments  
MPI proposes to amend the cost recovery regulations to update t he references to the relevant 
parts of the Agricultural Compounds and Veterinary  Medicines Act 1997, Animal Products 
Act 1999, and Wine Act 2003 relating to recognised persons and agencies.  
This is a minor and technical adjustment to cost recovery regulations to make changes to 
update the regulations. It involves no changes to fees.   
178  Consultation Paper on Proposed Revisions to the Cost Recovery Regime  Ministry for Primary Industries  9.9.5 Questions for consideration  
Question 9.9 
Do you have any concerns about the proposed updates to references to the Agricultural 
Compounds and Veterinary Medicines Act 1997, Animal Products Act 1999, and Wine 
Act 2003 in various regulations?  
 
9.10 COMMON#8 – ALIGN VETERINARY PRO FESSIONAL RATES ACRO SS 
BIOSECURITY AND FOOD  REGULATIONS  
9.10.1  Background  
MPI has a responsibility to service users to ensure that charges for similar activities and 
services across different regulations are consistent, and that the rationale for differential 
charging is clear.  
9.10.2  Problem definition  
Veterinary inspectors undertake a variety of activities and functions under biosecurity and 
food legislation.  
Current hourly rates for veterinary inspector activities were set prior to the creation of MPI 
from its predecessor agencies. These predecessor agencies had different c ost (including 
overhead) structures. As a result, veterinary inspectors undertaking similar work, but now 
with the same cost structure, are being recovered at different rates for activities undertaken 
under biosecurity and food legislation.  
The options con sidered were:  
 Option 1: maintain the status quo;  
 Option 2: amend the veterinary inspector hourly rates in the Biosecurity (Costs) 
Regulations to align with that specified in the relevant food regulations (proposed rate of 
$186.30 per hour).  
9.10.3  Proposed charge s 
The proposal is to amend the veterinary inspector rate in the Biosecurity (Costs) Regulations 
to $186.30 per hour to align with the rate proposed in the relevant food sector regulations.  
9.10.4  Questions for consideration  
Question 9.10 
Do you have any concerns about the proposed alignment of charging rates for 
veterinarians under the biosecurity cost recovery regime and the food cost recovery 
regime?