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Cost Recovery Proposals under the Animal Products Act 1999

2 Background

Cost recovery for animal products was first implemented under the Meat Act 1981 in the late 1980s. Procedures for cost recovery remained largely unchanged until the implementation of the Animal Products Act. During the Animal Products Act transition period, cost recovery progressively moved from the Meat Act regime to the Animal Products Act regime. The transition period finished on 1 July 2006.

During the transition period a number of changes were made to the cost recovery regime. In 2002 NZFSA Verification Agency (NZFSAVA) charging mechanism moved from industry levies to charges based on the level of service provided. E-cert charging moved from industry levies to charges based on export eligibility requirements and use of the system. Those charging systems are not subject to this review. Nor are dairy fees and charges or fees for export of live animals, which are also set under the Animal Products Act. Those will be subject to separate proposals at a later date.

A number of factors have influenced the need to review the cost recovery regime;

• Some of the existing fees and charges do not fully meet government guidelines for cost recovery (which were developed after the Meat Act regime was put in place)

• The formation of NZFSA has changed the nature and therefore spread of indirect costs and overheads

• The restructure of NZFSA away from sector based service delivery to a functionality based service delivery approach over a wider base of services has necessitated a change in how services are costed and allocated to sectors or services delivered.