Budget 2026: Costello announces $70.7m to fight ‘clear and present danger’ at NZ border
Friday, 22 May 2026
More X-rays, bigger warehouses and intelligence operatives overseas are among a suite of initiatives announced by the Government to beef up border protection.
The Government announced funding of $70.7 million over four years aimed at intercepting illicit tobacco and drugs at the border as part of Budget 2026.
Customs Minister Casey Costello said the money would be spent on new cargo X-ray equipment, increased security at ports and airports as well as bigger warehouses for storing seized illicit goods.
Costello said there was a “clear and very present danger” at the New Zealand border.
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“In 2025, Customs seized nearly 15 million illegal cigarettes and eight tonnes of illicit loose tobacco at the border,” she said.
Costello said that crime groups were increasingly targeting the South Pacific as a “transit hub”.
“In the first six weeks of this year, a staggering 14 tonnes of cocaine was seized in the Pacific,” she said
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Costello said the spend would include $35.9m from “third party revenue” - levies on importers.
This recognised that “criminal groups leverage legitimate trade routes for their activity”, she said.
She said that fees would be applied “per package” rather than “per consignment”, which reflected the growth in e-commerce and small package shipment.
Budget 2026 would also provide $10.6m over four years for an “initiative” that would create four new international posts in the Pacific, South America, Middle East and Europe, Costello said.
She said the “international liaison posts” would be “key conduits for establishing relationships that provide valuable intelligence”.
“Their establishment will be phased in over the four years with officers stationed first in the Pacific and South America, in response to a significant increase in drug-smuggling through those regions,” Costello said.
They would add to 11 representatives that Customs already across the globe providing “on the ground knowledge”.
At the announcement, Customs unveiled new underwater sea drones.
Costello said it would help combat “sea chests” attached to the bottom of ship hulls to smuggle in illicit goods.
“We used to have to put down dive teams, so we couldn't do [check] as many,” she said.
“Sometimes they [the chests] are not even known to the ship itself,” she said.
Larger more modern x-rays were also on show at the Customs facility, which will allow officers to search a higher volume of containers each day.
“Wherever there is a legitimate supply chain, there will be an illicit supply chain that comes in behind it,” said Costello.
“We have to be a little bit commodity agnostic because these enemies of ours will do whatever they can to make money, whether that is scamming, tobacco, drugs, people trafficking - all of these cartels are about making money.”
Customs group manager Paul Campbell said New Zealand “remains a persistent vector for drug smuggling”.
“We have recently commenced Operation Kiwa, a New Zealand joint agency Pacific maritime counter drug operation involving customs, NZDF and the GCSB.”