Government pockets $2.6b a year from international tourists.

Monday, 11 June 2018

Tourists contribute $1.47b in GST annually.

The tourism industry has been quick to leap on a new report showing the Government pockets more than $2.6 billion a year from international tourism.

Tourism Industry Aotearoa (TIA) has strongly opposed Government plans for a new border tax on overseas visitors and chief executive Chris Roberts said the report on the financial benefits and costs of international tourism showed visitors more than paid their way.

Small towns such as Tekapo have come under increasing pressure from tourism and want more Government help to pay for infrastructure.

He said the report commissioned by the Ministry of Business Innovation and Employment and prepared by Deloitte Access Economics provided independent confirmation of the take from tourists and the figures were no surprise to the industry.

'At a time when the Government is planning to introduce another tax – a new border levy on some of these international visitors – it is extremely helpful that we now have some data showing the size of the contribution these visitors are already making.'

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'We have been pointing out for some time that the single biggest beneficiary of a successful tourism industry is the Government – and this report backs that up,' said Roberts. 'It shows there's no financial reason for another tax and that it will be symbolic more than anything else.'

According to the Deloitte report the Government collected $3.27b a year in international tourism-related revenue, spent $638m, receiving a net gain of more than $2.6b.

The revenue included GST ($1.47b), motor vehicle taxes ($264m), along with estimates of corporate taxes ($999m) and income taxes ($353m) from businesses serving tourists.

An additional $59m was collected in visitor charges and $125m from other sources.

Government costs associated with international visitors included land transport funding ($328m), Tourism New Zealand ($117m); spending by the Departments of Conservation ($60m), Immigration ($60m), Customs ($36m), and MBIE ($28m). ACC accounted for $4m.

Tourism is the country's biggest export earner contributing more than 20 per cent of foreign exchange earnings.

But when it came to net benefits, local government did not fare so well.

The report looked three key regions - Southland, Nelson and Auckland - where visitor numbers had increased increased more than 75 per cent over the past five years.

Deloitte said it was difficult to measure spending and income related specifically to international tourists and the figures were 'indicative only.'

They suggest Auckland Council spent up to $40m more than it earned from international tourism in the year to June 2017, with the bulk of its $93m to $103m in revenue coming from its investment in the port and airport.

Southland District Council spent an estimated $1.2m to $1.5m more than it received in revenue which came mostly from levies paid on Milford Sound cruises and ferry tickets to Stewart Island.

Nelson City Council's deficit was the lowest at $600,000 to $700,000.

The estimates were based on income from sources such as government grants, commercial rates, charges for car parks, toilets and entry to museums and galleries.