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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.

Customs measures performance against the Outcome and four Output targets set in 2005-06 Portfolio Budget Statements and Additional Estimates Statements. Targets include quantity and quality performance measures (for the Outputs) and effectiveness measures (for the Outcome).

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

Figure 4: Outcome performance against targets set in 2005-06 Portfolio Budget Statement

Effectiveness indicators	Measures	Target*	Actual
Minimum disruption to legitimate trade and travel
Cargo facilitation	Proportion of electronically lodged import declarations where an authority to deal is transmitted within 15 minutes of finalisation of details	97%	ICS 99.9% COMPILE 99.4%
Passenger facilitation	National proportion of arriving international passengers processed through the entry control point within 30 minutes of joining the queue	95%	94.7%
Prevent illegal movement across the border
Illicit drugs	Weight and number of drug detections by significance of offence	**	See figure 9
	Weight of drug detections by mode of importation	**	See figure 8
	Trends in the number and weight of drug detections	**	See figures 10 -14
Other prohibited goods	Trends in the number of detections and/or seizures of other prohibited imports	**	See figure 16 and figure 23
Civil maritime surveillance	Undetected vessels subsequently found to have breached the Australian border	**	See figure 38
Raise revenue
Revenue collection	Significant revenues collected (Including Customs Duty, GST collected and Passenger Movement Charge)	$7 393 million (net of GST deferred)	$7 535m^#

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

In 2005-06 Customs:

cleared 6.1m air cargo consignments and 2.0m sea cargo consignments (5.5m air cargo and 1.8m sea cargo in 2004-05)
processed over 21.7m people through international airports and seaports (20.9m in 2004-05)
achieved over 99 per cent proportion of electronically lodged declarations where an authority to deal is transmitted within 15 minutes of receipt of finalisation of details (99.4 per cent in 2004-05)
achieved a 94.7 per cent proportion of arriving international passengers processed through the entry control point within 30 minutes of arrival (95.1 per cent in 2004-05)
conducted over 4 300 surveillance flights over coastal and offshore areas, equating a total area of more than 142m square nautical miles (4 400 surveillance flights over an area of about 140m square nautical miles in 2004-05)
seized 83kg cocaine (197kg of cocaine in 2004-05), 413kg of MDMA (ecstasy) (2 378kg of MDMA in 2004-05), 90kg of amphetamine-type stimulants (157kg of amphetamine type stimulants in 2004-05), 47kg of heroin (173kg of heroin in 2004-05) and 47kg of cannabis (4kg of cannabis in 2004-05)
Collected customs duties amounting to over $5b in 2005-06 (over $5.6b in 2004-05). The reduction in collections reflects the impact of Free Trade Agreements with United States and Thailand and other tariff reductions. In addition, Customs administered $1 738m of Government concessions including $1 038m under the Tariff Concession Scheme ($552m in 2004-05) and $117m in duty drawbacks to industry ($121m in 2004-05).

Funding for Outcomes and Outputs

The process 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 5). Approximately 74 per cent of Customs costs can be directly attributed to an Output. For the remaining 26 per cent, the costing model allocates overhead expenses to Outputs on a staff full-time equivalent (FTE) per Output basis as well as using IT usage and square metre drivers.

Resources allocated for the Outcome

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

	Budget^*	Actual expenses	(column 2 minus column 1)	Budget^**
	(1)	(2)	Variation
	2005-06	2005-06		2006-07
	$’000	$’000	$’000	$’000
Administered Expenses	280	259	(21)	280
(including third party outputs)
Total Administered Expenses	280	259	(21)	280
Price of Agency Outputs
Output Group 1 – Passenger movement and intelligence	280 515	279 414	(1 100)	297 732
Output Group 2 – Border compliance and enforcement	397 055	391 106	(5 949)^	448 827
Output Group 3 – Cargo regulation, trade facilitation and revenue collection	111 430	118 801	7 372⁺	126 292
Output Group 4 – Civil maritime surveillance and response^#	236 617	237 030	413	258 145
Total Price of Outputs^***	1 025 616	1 026 351	735	1 130 996
Revenue from Government (appropriation) for Agency Outputs	833 902	827 267	(6 635)	934 589

Revenue from other sources	195 214	201 745	6 531	196 407
Total price from departmental outputs	1 029 116	1 029 012	(104)	1 130 996
Total Price of Outputs	1 025 896	1 026 610	714	1 131 276
TOTAL FOR OUTCOME 1	1 029 396	1 029 271	(125)	1 131 276
(Total Price of Outputs and Administered Expenses)
			2005-06	2006-07
Average Staffing Level (Number)
(full-time equivalents, including inoperatives)			5 160	5 297

* Full-year budget, including additional estimates.
** Budget as announced in the Portfolio Budget Statement.
*** 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.
^ The variation primarily relates to lower costs associated with the transportation of foreign fishers than had been budgeted for.
+ The variation primarily relates to an adjustment to Customs funding associated with the transportation and storage of firearms.

Portfolio Budget Statement

The total price of Outputs in the initial 2005-06 Portfolio Budget Statement was $978.446m, including appropriation of $783.265m and revenue from other sources of $195.181m.

Customs was also appropriated an equity injection of $16.452m in 2005-06. This included the provision of capital funds associated with initiatives such as Biological and Chemical Agent Screening and expansion of the closed circuit television networks on the waterfront and at airports.

Portfolio Additional Estimate Statement

After Portfolio Additional Estimate hearings the total price of Outputs was revised to $1025.616m, an increase of $47.170m. This reflected an increase in funding for new Government initiatives relating to aviation security and illegal foreign fishing. Additional funding of $3.500m was provided in the supplementary additional estimates for the testing, transportation and storage of firearms.

Customs contribution to other agencies ¹

We provide a range of services to assist almost 100 Federal and State agencies to achieve their outcomes. The relationship between Customs services provided to key agencies and Customs Outputs are detailed below.

These services are normally governed by agency-to-agency Memorandums of Understanding and Service Level Agreements which are periodically reviewed.

We also administer 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 and precursor material 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 provision of intelligence information border enforcement training provision of dogs and dog training in firearms and explosives detection provision of forensic services.	Output 1,2 and 4
Australian Fisheries Management Authority	regulation of the import/export of certain fish products civil maritime surveillance and response provision of maritime enforcement training apprehension and transportation of illegal foreign fishers.	Output 2,3 and 4
Australian Quarantine and Inspection Service (AQIS)	civil maritime surveillance and response referral of animal or plant products prohibited under the Quarantine Act 1908 detected during Customs inspection of ships, aircraft, passengers and international incoming mail provide a single window for importers/exporters through an electronic system access to Integrated Cargo System to identify goods of interest to AQIS.	Output 1,2,3 and 4
Australian Taxation Office (ATO)	administration of the Tourist Refund Scheme administration of the collection activity of Customs duty and indirect taxes, for example the goods and services tax, the luxury car tax and the wine equalisation tax in relation to imported or exported goods coordination of collection of indirect tax performance statistics information as necessary and authorised by law and released under the Memorandum of Understanding between Customs and the ATO with particular reference to excise matters.	Output 1,2 and 3
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 provision of dogs and training in detection of firearms and explosives.	Output 2,3 and 4
Department of Health and Ageing	providing expertise and advice on National Drug Strategy policy in 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 regulating the import and export of certain restricted biological material regulating the movement of drugs and other substances provision of information under the National Industrial Chemicals Notification and Assessment Scheme participating in a trial of thermal scanning equipment at Cairns Airport in support of whole-of-government pandemic planning.	Output 1,2 and 3
Department of Immigration and Multicultural Affairs	clearance functions for passengers and crew at international airports and seaports civil maritime surveillance and response.	Output 1,2 and 4
Department of Foreign Affairs and Trade (DFAT)	contribution to free trade agreement negotiations support for the World Trade Organization (WTO) Doha Round negotiations, notably on trade facilitation, anti-dumping and countervailing issues assist in the day to day management of overseas posts facilities capacity building support to relevant border agencies in Asia-Pacific region to improve border control and related management in the region assists with the distribution of ‘safe travel’ public information materials to Australians departing overseas participation in DFAT-led regional counter-proliferation outreach activities.	Output 1,2,3 and Enabling Outputs
Australian Agency for International Development (AusAID)	provision of technical assistance and capacity building focused on Customs modernisation in countries such as Papua New Guinea (under the Enhanced Cooperation Program) and Tonga provision of assistance to the Oceania Customs Organisation engagement with Association of Southeast Asian Nations (ASEAN) and Asia-Pacific Economic Cooperation (APEC) nations such as Indonesia and Philippines cooperation with AusAID in preparing country strategies as laid out in the White Paper on Australia’s overseas aid program.	Enabling Outputs
Department of the Environment and Heritage	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 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 foreign fishing and environmental information in the Southern Ocean assistance in environmental protection in the Ashmore Reef National Nature Reserve civil maritime surveillance and response collection of the Product Stewardship for Oil levy on imported petroleum products.	Output 1,2,3 and 4
Department of Transport and Regional Services	prohibiting import of motor vehicles unless a valid Import Approval exists provision of advice on the application of the Customs Tariff Act 1995 policing airport and port security issuing Australian Security Identification Card and the Maritime Security Identification Card development and implementation of a range of measures to enhance air cargo security assistance to the Office of Transport Security.	Output 1,2 and 3
Department of Industry, Tourism and Resources	ensuring compliance with the TRADEX^* scheme providing input regarding the World Customs Organization (WCO) Harmonised System for Tariff Classification implementation and administration of tariff-based industry assistance measures administration of preferential duty rules regulation of the import and export of uranium regulating the export of rough diamonds under the Kimberley Process Certifications Scheme administering the import provisions of the Trade Marks Act 1995 and the Olympic Insignia Protection Act 1987.	Output 2 and 3
Department of Conservation and Land Management (Western Australia)	detection and prevention from export of illegally taken native flora and fauna.	Output 1,2 and 3
Western Australia Department of Fisheries	assist in the detection and apprehension of illegal foreign fishing vessels through Coastwatch surveillance and border controls in State waters assist in the transport and processing of illegal foreign fishermen apprehended either aground or in State waters participate in Sea Ranger pilot program with indigenous communities at One Arm Point in the Kimberley region provide surveillance information to Western Australian Fisheries vessels on Federal taskings in the Kimberley area of operations.	Output 2 and 4
Tasmania Police	provision of detector dog for state based offences and activities provision of intelligence information provision of detection technology for State based offences and activities contributing to the Police Expo.	Output 1 and 2

¹ Customs has included details of contribution from three State Government agencies, as examples of its support for State agencies. Customs receives support from all States.
^* This scheme is administered by AusIndustry and allows importation without payment of duty or sales tax when the goods are intended for export

Other agencies contribution to Customs Outcome ²

Australian Federal Police	investigation of Commonwealth offences provision of intelligence information training support for officers involved in surveillance operations provision of operational support for joint or multi-agency operations provision of forensic services support in prosecutions for breaches of Prohibited Imports Regulations.	Output 1,2 and 4
Australian Fisheries Management Authority	targeting information on threats in Australian Fishing Zone training of Customs officers on fisheries legislation and enforcement procedures support Southern Ocean Maritime Patrol and Response (SOMPR) with embarked fisheries officers.	Output 2 and 4
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, 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 international incoming mail providing support to Customs in achieving their targets for examination of incoming air cargo consignments.	Output 1,2,3 and 4
Australian Taxation Office (ATO)	information as necessary and authorised by law and released under the Memorandum of Understanding between Customs and ATO with particular reference to 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.	Output 2 and 3
Department of Defence	resources in support of civil maritime surveillance and response secondment of personnel to Coastwatch, the Joint Offshore Protection Command and SOMPR 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 logistic and training support for SOMPR.	Output 2,3 and 4
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 provision of advice to Customs to inform its position under the National Industrial Chemicals Notification and Assessment Scheme.	Output 1,2 and 3
Department of Immigration and Multicultural Affairs	immigration clearance training decisions on passenger and crew entry clearance expert document examination.	Output 1,2 and 4
Department of Foreign Affairs and Trade	advice on WTO aspects of Australia’s anti-dumping and countervailing legislation provision and management of overseas facilities for Customs representatives security of overseas representatives at Australian missions assists with coordination of overseas capacity building projects.	Output 1, 2, 3 and Enabling Outputs
Australian Agency for International Development	provision of funding to Customs to enable Customs modernisation programs in Papua New Guinea (under the Enhanced Cooperation Program), Tonga and Indonesia.	Enabling Outputs
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, dental support and infrastructure for SOMPR policy advice on matters relating to the Commission for the Conservation of Antarctic Marine Living Resources for fisheries patrols.	Output 1, 2, 3 and 4
Department of Transport and Regional Services	provision of Vehicle Import Approvals provision of advice on the application of the Motor Vehicle Standards Act 1989 contributing to the administration of the airport and port security framework development and implementation of a range of measures to enhance air cargo security.	Output 1,2 and 3
Department of Industry, Tourism and Resources (DITR)	provision of advice on the application of the TRADEX scheme provision of advice on Australia’s trade interests to assist in developing Australian Customs position on international trade issues under the WCO Harmonised Trade System (HS) provision of advice on amendments to rules of origin under Australia’s free trade agreements arising out of changes to the HS and out of agreed changes to the agreements facilitation of various legislative reforms and amendments, including changes to item 31 and 71 duty concession by-laws, and changes to the Customs Act 1901 to allow for importation by pipeline provision of advice on anti-dumping matters, particularly in 2006-07 concerning issues relating to the administration of the anti-dumping system as part of the joint Customs-DITR study provision of policy advice on country of origin labelling requirements and other trade descriptions under the Commerce (Trade Descriptions) Act 1905 provision of policy advice on the Trade Marks Act 1995 and the Olympic Insignia Protection Act.1987.	Output 2 and 3
Department of Environment and Conservation (Western Australia)	provide information and support to Customs operations relating to the import of exotic animals and export of illegal native flora and fauna.	Output 1,2 and 3
Western Australia (WA) Department of Fisheries	assist in detection and apprehension of illegal foreign fishing vessels through the reporting of information gathered by WA Fisheries Officers whilst undertaking compliance patrols, and resulting from any subsequent investigations into, or court proceedings initiated against illegal foreign fishers for potential breaches of WA Fisheries legislation provide ongoing assistance to enhance border security throughout the Kimberley region. This is demonstrated through: assistance in detection and apprehension of illegal foreign fishing vessels through the reporting of information gathered by WA Fisheries Officers whilst undertaking compliance patrols in the Kimberley region the initiation and delivery of ‘Operation Pandanus’ - a compliance operation involving WA Fisheries Officers and members of the Bardi Aboriginal community working closely with Customs to undertake a range of compliance activities both at-sea and on-land in areas frequented by illegal foreign fishers provide information to Coastwatch to assist with illegal foreign fishing vessel taskings in the Kimberley area of operations.	Output 2 and 4

²Customs has included details of contribution from three State Government agencies, as examples of its support for State agencies. Customs receives support from all States.

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