Australian Customs Service
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The Customs Outcome

Effective border management that, with minimal disruption to legitimate trade and travel, prevents illegal movement across the border, raises revenue and provides trade statistics

The goal of Customs is to provide the nation with effective border management in line with the Government’s commitments to increase border protection.

In 2004-05, Customs protects Australia’s interests by detecting, controlling and, where appropriate, preventing the entry and exit of individuals and goods that had the potential to adversely affect the safety or quality of life in Australia.

In addition, Customs protected Australia’s revenue base through effective collection of revenue and the administration of certain government industry schemes and trade measures.

Customs strengthened maritime security capability by:

Following the successful Southern Ocean surveillance and enforcement program undertaken in 2003–04, the Government extended the interim program. In cooperation with the Australian Fisheries Management Authority and supported by Defence and the Australian Antarctic Division, Customs conducted surveillance and armed patrols for vessels engaged in illegal fishing. This also protects Australia’s sovereign interests in, and the environmental values of, the Southern Ocean.

Between November 2002 and November 2003, Customs established Container Examination Facilities at the ports of Sydney, Melbourne, Brisbane and Fremantle, with a smaller facility in Adelaide commencing operations in March 2005. The increased examination capacity is a core element of Australia’s border protection strategy under the Government’s Tough on Drugs and Protecting our Borders policies.

Customs, with the Department of Foreign Affairs and Trade and the Department of Immigration and Multicultural and Indigenous Affairs, expanded the trial of an automated biometric border-processing system. Customs received funding to upgrade and install an additional automated biometric border-processing transaction point with passport biometric chip-reading capacity.

Customs continued with the reengineering and integration of business processes for cargo management to improve service delivery to industry and to make greater use of technology. A consultative approach with industry is providing a smooth transition from the old to the new systems.

In 2004–05 Customs:

Customs duties collected amounted to over $5b in 2004–05 (over $5b in 2003–04). In addition, Customs administered $1366m of Government concessions including $548m under the Tariff Concession Scheme ($479m in 2003–04) and $121m in duty drawbacks to industry ($106m in 2003–04).

Customs measures performance against the Outcome and five Output targets set in 2004–05 Portfolio Budget Statements and Additional Estimates Statements. Targets include quantity and quality performance measures (for the Outputs) and effectiveness measures (for the Outcome).

Customs performance against the targets set at the beginning of the year are below.

Figure 3: Outcome performance against targets set in 2004–05 Portfolio Budget Statements

Effectiveness indicators

Measures

Target*

Actual

* Targets may be performance targets, service level targets or estimates.

** Performance targets cannot be estimated through any reliable statistical or other method.

# Revenue excludes the dollar value of Automotive Competitiveness and Investment Scheme (ACIS) credits acquitted (moneys forgone by Customs). ACIS Credit is a duty liability not paid but acquitted against a credit granted under the ACIS set out in the ACIS Administration Act 1999.

Funding for Outcome and Outputs

The prices for the Outcome and Outputs are calculated using activity-based costing information and attributed across the outputs to provide a complete picture, including for Enabling Outputs (see Figure 4).

Approximately 73 per cent of Customs costs can be directly attributed to an Output. For the remaining 27 per cent, the costing model allocates overhead expenses to Outputs on a staff full time equivalence (FTE) per Output basis.

Resources allocated for the Outcome

Figure 4: Resources allocated for the Customs Outcome 2004–05
 

(1)

(2)

Variation

Budget*

Actual results

(column 2 minus column 1)

2004–05

2004–05

 

$’000

$’000

$’000

Administered Expenses

255

4 612

4 357

(including third party outputs)

     

Total Administered Expenses

255

4 612

4 357

Price of Agency Outputs

     

Output 1 – Facilitation of the legitimate movement of goods across the border, while intercepting prohibited and restricted imports and exports

329 235

329 675

440

Output 2 – Facilitation of the legitimate movement of people across the border, while identifying illegal movements

107 926

117 899

9 973

Output 3 – Civil maritime surveillance and response#

317 531

306 953

-10 578

Output 4 – Administration of Customs duty and indirect taxes, other border-related revenue collections, and import/export statistics

190 964

162 790

-28 174

Output 5 – Anti-dumping and countervailing administration

5 283

7 816

2 533

Total Price of Outputs**

950 939

925 133

-25 806

Revenue from Government (Appropriation) for Agency Outputs

758 296

758 296

0

Revenue from other sources

192 643

203 918

11 275

Total revenue for Outputs

950 939

962 214

11 275

TOTAL PRICE FOR OUTCOME 1

951 194

929 745

-21 449

(Total Price of Outputs and Administered Expenses)

     

Total Revenue for Outcome 1

951 194

966 826

15 632

(Total Revenue for Outputs and Aministered expenses)

     
       

Average Staffing Level (Number)

   

2004–05

(full-time equivalents, including inoperatives)

   

  4 686 

* Full-year budget, including additional estimates.

** Total Price of Outputs and Total Revenue for Outputs compares the total of the prices derived from estimated revenue to the total of the prices derived from actual expenses. The difference between the ‘actual total price of outputs’ and the ‘actual total revenue for outputs’ reflects Customs operating surplus for the year.

# Price includes the resources received free of charge from the Australian Defence Force.

Figure 5: Resources allocated for the Customs Outcome 2005-06
 

Budget*
2005–06
$’000

Administered Expenses

280

(including third party outputs)

 

Total Administered Expenses

280

Price of Agency Outputs

 

Output 1 – Passenger movement and intelligence

261 600

Output 2 – Border compliance and enforcement

375 800

Output 3 – Cargo regulation, trade facilitation and revenue collection

104 400

Output 4 – Civil maritime surveillance and response#

236 600

Total Price of Outputs**

978 400

Revenue from Government (Appropriation) for Agency Outputs

783 265

Revenue from other sources

195 135

Total Price of Outputs

978 400

TOTAL FOR OUTCOME 1

978 680

(Total Price of Outputs and Administered Expenses)

 
   

Average Staffing Level (Number)

2005–06

(full-time equivalents, including inoperatives) 4 902

* Budget as announced in the Portfolio Budget Statements. Revised structure.

** Total Price of Outputs compares the total of the prices derived from estimated revenue to the total of the prices derived from actual expenses. The difference between the actual total price of outputs and the actual total revenue for outputs reflects Customs operating surplus for the year.

# Price includes the resources received free of charge from the Australian Defence Force.
Portfolio Budget Statements

The total price of Outputs in the initial 2004–05 Portfolio Budget Statement was $879.900m, including an appropriation of $702.619m and revenue from other sources of $177.281m.

Customs was also appropriated an equity injection of $19.471m in 2004–05. This included the provision of capital funds associated with initiatives such as biometrics, Container Examination Facilities, enhanced security arrangements, the Neutron Scanner program and preparation for the Melbourne Commonwealth Games 2006.

Portfolio Additional Estimates Statements

After Portfolio Additional Estimates hearings, the total price of Outputs was revised to $950.939m (up $71.039m). This reflected an increase in funding for new Government initiatives and additional funding from the review of Customs financial position.

Actual expenditure

Details on the actual expenditure of Customs in 2004–05 are shown in Figure 4. Further information on this expenditure is available in the financial statements and accompanying notes.

Review of Customs financial health

An independent review of Customs financial position was conducted in 2004–05 to assess the future funding requirements of Customs. The review was contracted to Ernst and Young on behalf of Department of Finance and Administration and Customs. It was completed in October 2004 and included a comprehensive assessment of activities, costs and ways to improve Customs financial position. The government adopted the report which now also provides a workload measurement device for passenger processing.

Increased Quarantine Intervention

In 2001–02 the Government approved additional funding to strengthen Australia’s quarantine programs through the Increased Quarantine Intervention (IQI) initiative. This was in response to the outbreak of foot and mouth disease in the United Kingdom and Europe. As part of the initiative Customs committed to inspecting all high volume/low value (HVLV) consignments imported through air express couriers and screening all international mail. The Government has extended quarantine border security funding until at least 2008–09.

Customs achieved 100 per cent inspection of HVLV consignments and postal items in conjunction with the Australian Quarantine and Inspection Service. In addition to the interception of items presenting a quarantine risk, inspections also resulted in the detection of narcotics, weapons and other prohibited imports.

Proceeds of crime

As part of the Government’s proceeds of crime legislation, $885 314 was provided for enhanced closed circuit television monitoring at airports.

Customs initiated five new proceeds of crime investigations. As at 30 June 2005, six investigations had been concluded and 16 are under active investigation.

Customs contribution to other agencies

Customs provides a range of services to assist almost 100 Federal and State agencies to achieve their outcomes. Customs services provided to key agencies are detailed below. These services are normally governed by agency-to-agency Memorandums of Understanding and Service Level Agreements which are periodically reviewed.

Customs also administers legislation on behalf of these and other government agencies, especially in relation to the movement of goods and people across the Australian border.

Australian Federal Police

  • referrals at the border under criminal legislation, including drug detections, persons of interest, (for example criminal activity or potential terrorists) and undeclared excess currency
  • civil maritime surveillance and response activities for people smuggling and remote area logistic support

Australian Fisheries Management Authority

  • regulation of the import/export of certain fish products
  • civil maritime surveillance and response

Australian Quarantine and Inspection Service

  • assist in the delivery of quarantine inspection services for goods, people, ships and aircraft at the border and remote ports
  • logistic support within the Torres Strait
  • civil maritime surveillance and response

Australian Taxation Office

  • administration of revenue collection activity including Tourist Refund Scheme, the Passenger Movement Charge, Customs duty and indirect taxes, the goods and services tax, the luxury car tax and the wine equalisation tax

Department of Defence

  • resources, including surveillance and response assets, in support of Operation Relex II (people smuggling focus)
  • assessment and clearance functions and referrals for restricted exports on the Defence and Strategic Goods List

Department of Health and Ageing

  • providing expertise and advice on the National Drug Strategy policy on import and export of substances
  • identifying new substances which may require regulation at the border
  • contributing to the whole-of-government position on licit and illicit drugs
  • prohibiting the import of viable materials derived from human embryo clones
  • prohibiting the import and export of human embryo clones
  • regulating the movement of drugs and other substances

Department of Immigration and Multicultural and Indigenous Affairs

  • clearance functions for passengers and crew at international airports and seaports
  • civil maritime surveillance and response

Department of the Environment and Heritage

  • assessment and clearance functions and referrals for restricted imports and exports, including endangered species (flora and fauna), ozone hazardous waste and cultural heritage
  • provision of intelligence
  • investigations into actual or suspected breaches of relevant Acts and/or Regulations
  • examinations of cargo where there is a suspected or actual breach of a relevant Act or Regulation
  • assistance in transportation, storage and disposal of hazardous waste and ozone depleting substances
  • collection and provision of data in relation to illegal fishing and environmental information in the Southern Ocean
  • assistance in environmental protection in the Ashmore Islands Nature Reserve
  • civil maritime surveillance and response.

Other agencies contribution to Customs Outcome

Australian Federal Police

  • investigation of Commonwealth offences
  • provision of intelligence information
  • training support for investigations officers and training in use of force for National Marine Unit/Southern Oceans Maritime Patrol Response (SOMPR) officers

Australian Fisheries Management Authority

  • targeting information on threats in Australian Fishing Zone
  • training of Customs officers on fisheries legislation and enforcement procedures
  • support SOMPR with embarked fisheries officers

Australian Quarantine and Inspection Service

  • providing assistance to Customs during vessel inspections, clearance of passengers and crew and surveillance functions. This includes shared use of x-rays, CCTV and joint vessel patrols within Australian waters
  • referral of animal or plant products (prohibited under the Environment Protection and Biodiversity Conservation Act 1999), narcotics, dutiable items, undeclared currency and community protection items (including weapons) that are detected during quarantine inspection of ships, aircraft, passengers and incoming international mail
  • providing support to Customs in acheiving 100 per cent inspection of HVLV consignments

Australian Taxation Office

  • information as necessary and authorised by law and released under the Memorandum of Understanding between Customs and the Australian Taxation Office with particular reference to Schedule 2, Excise matters. These matters generally relate to industry information, and the exportation and importation of alcohol, tobacco and petroleum which may have revenue consequences for the payment of Excise duty

Department of Defence

  • resources in support of civil maritime surveillance and response
  • secondment of staff to Coastwatch and the Joint Offshore Protection Command
  • provision of intelligence
  • scientific advice in relation to emerging technologies
  • training and technical advice to assist in the identification of goods on the Defence and strategic goods list
  • logistic and training support for arming Australian Customs Vessels with deck-mounted weapons systems

Department of Health and Ageing

  • providing expertise and advice on health related licit and illicit drug issues
  • ensuring operational and policy responses reflect whole-of-government position on licit and illicit drugs
  • regulating the movement of drugs and other substances

Department of Immigration and Multicultural and Indigenous Affairs

  • immigration clearance training
  • decisions on entry clearance
  • expert document examination

Department of the Environment and Heritage

  • assistance in assessment and clearance functions and referrals for restricted imports and exports, including endangered species (flora and fauna), ozone depleting substances, hazardous waste and cultural heritage
  • provision of intelligence and expert technical advice
  • providing appropriate training for Customs officers
  • storage and security of ozone depleting substances
  • assistance in respect of the transportation, storage and disposal of hazardous waste
  • provision of comprehensive medical support and infrastructure for SOMPR
  • medical and dental support for sOMPR
  • policy advice on matters relating to the Commission for the Conservation of Antarctic Marine Living Resources for fisheries patrols.

 

 

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