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Summary of Submissions on the Transition Policy and Related Implementation Discussion Document

17 Cost Recovery

Introduction

The discussion document does not detail proposals for cost recovery standards in the new regime, but notes that the development of these standards is the responsibility of NZFSA. There was a specific proposal, however, that ‘persons’ will incur the cost of the preparation and evaluation of the custom-made contents of their Food Control Plan.

The discussion document also proposes that ‘persons’ remain subject to their TAs existing registration, inspection and cost-recovery processes under the current regime until their Food Control Plan is registered.

Overview of Submissions

Ten submitters all of whom were from government organisations made comments in relation to cost recovery under the new regime.

Summary

The principal concern expressed by submitters was about a lack of detail relating to the proposed fee structure. There was also concern as to who will design the fee structure. The discussion document notes that it is NZFSA’s responsibility to develop cost recovery standards; however, one submitter, a TA, commented that

“the proposed fee structure should be devolved to TAs, so that the true costs of the service may be recovered.”

This was not necessarily the general view expressed by all the submitters. It is useful to note, however, as it highlights the desire of TAs to set fees for the services they will be required to provide.

NZFSA levy

There was notable objection to the proposal that TAs cost recover on behalf of NZFSA through a form of levy. Such an arrangement, it is argued, would not provide the transparency in cost recovery arrangements that businesses expect from government.

Private goods

Although there was no indication of cost recovery proposals in the discussion document, several submitters suggested that treating the registration and compliance monitoring of Food Control Plans as private goods is the best way to ensure TAs recover their costs. It was also noted that, as business bears the cost of compliance, not all associated costs will be recovered. This is especially the case in smaller or rural TAs where geographic coverage may increase operating costs that cannot in fairness in their view be passed on to ‘persons’.

In tandem with suggestions to cost recover TA activities as private goods, there was a correspondingly strong objection to funding for cost-recoverable activities from general rates revenue.

Public goods

Submitters also suggested that costs for public good activities associated with education, administration and general liaison should be cost recoverable from NZFSA or central government.

Registration fees

Three submitters commented on the lack of understanding as to how the registration fee structure will be cost recovered. One TA wrote:

“What is not clear is the ability for TA’s to operate a cost-recovery fee structure and who will be setting this fee structure? As the transitional period is over 5 years, will a dual fee registration structure apply, i.e. some businesses will have “transitioned” while others will be ‘awaiting’ transition”.

Dual charges

The question was also raised as to how businesses will react to the possibility that their current annual registration fee is payable knowing their Food Control Plan registration date is nearing. This is an issue of timing but also links to other concerns about the simultaneous functioning of two systems during the transition period.