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AgVetLink: Number 65, December 2007

ACVM Act cost recovery

The current ACVM fees and charges were set five years ago in 2002. Since then a number of factors have changed, not the least of which are the new and altered functions under the revised ACVM Act.

Consultation

Early in the New Year, NZFSA Policy Group and the ACVM team hope to consult on cost recovery under the ACVM Act and some new fees and charges. NZFSA's 2006 consultation document, Cost Recovery Policy and Framework, will form the basis for the ACVM fees and charges review and can be found on the NZFSA website (http://www.nzfsa.govt.nz/policy-law/publications/reports/index.htm).

The 2008 consultation is likely to be in two steps. The first consultation will be on the basis of an early budget that uses the NZFSA assumptions for the 2008/09 financial year, with a second round in February or March based on refined budget figures. The consultation documents will be placed on the NZFSA website as soon as they are available.

We will be taking written submissions and running a series of meetings around the country for interested and affected parties, probably in February.

Proposed changes

In addition to proposing an increased hourly rate and an increased annual fee, NZFSA is also proposing several changes in relation to the annual fees.

Timing of due date

At present the annual fee must be paid by 1 July every year. We are proposing a change to 1 October in order to avoid double handling and accruals at year end. This means that if the proposal is successful, the next annual fee will be due on 1 October 2008, and it will cover 15 months of activity.

Single fee

We are proposing to have a single annual fee for all products rather than a differentiated charge for products used on 'food-producing animals and crops' and those that are not.

The reason for the differentiation was to reflect the additional work done in setting standards for residues, but the current definition does not achieve this. For instance, NZFSA undertakes work on residues of vertebrate toxic agents, such as cyanide and 1080, but this work is not reflected in the annual fee for these products.

New services

Charges need to be made for some new services under the updated ACVM Act, including exemption in special circumstances. Where the exemption is a product specific one, it is proposed that the work be charged at the hourly rate, plus disbursements, in the same way that applications for registration are charged.

Monitoring

Where a need for surveys or for regular monitoring programmes across a particular set of approval holders (for instance 'persons' who are required to operate under an approved operating plan) is identified, consideration will be given to cost recovery via an annual fee against the approval.

Review

It is likely that the fees and charges will be reviewed again within 12 months because considerable change is expected over this period because of the implementation of the updated ACVM Act and the expected delivery of an IT system to support NZFSA’s approval processes (including ACVM ones).

The ACVM team has already reviewed some processes and introduced the Smart Track system (see page 4), which significantly reduces the time and cost for certain types of applications.

We expect that the ability to provide a range of services on-line will further reduce costs for simple applications and for administrative additions and changes once the system is delivered in 12 to 18 months' time.