Tourism industry pans more visitor taxes and seeks reduction in border levy

Friday, 10 November 2017

Tourists spend $95m a day in New Zealand and the industry says the challenge is to manage and sustain growth.

The tourism industry has again panned the idea of more visitor taxes and claims a border levy headed for a $15m surplus should be decreased.

In a briefing paper prepared for new Minister Kelvin Davis, Tourism Industry Aotearoa (TIA) outlined a lengthy wish list of 24 recommendations.

It said additional taxes were not favoured and if introduced they had to be fair, applied nationally, and ring-fenced for investment into regional tourism infrastructure.

The briefing said the $22 border clearance levy was 'brought together in haste' before the 2015 budget with very limited analysis or consultation.

TIA said the Ministry for Primary Industries and the Customs Service had advised it was now 'over-collecting' with a surplus of at least $15m forecast by next June and that justified a reduction in the levy.

* Councils seek $35m worth of tourism infrastructure

* Labour plans $25 charge on international visitors to pay for tourism facilities

* Mixed reaction to $178m in extra tourism and DOC funding**

During the election campaign Labour announced a new $25 a head border tax on international visitors to raise $75m a year to fund infrastructure and conservation.

TIA chief executive Chris Roberts said it was probably unworkable as their discussions with airlines and travel gents indicated it would be extremely difficult to differentiate between bookings from international passport holders, and those from Kiwis returning home.

'You would have to somehow get into the software booking system of every airline in the world so quite how you would implement it is unknown.

'We've done some research and there's only one border tax in the world we can find where the locals are exempted, and that's in Mexico, but they're actually charged it and have to seek a refund.'

The ministerial briefing said the Government already collected $1.2b a year in GST from international tourists and it needed to invest more in tourism infrastructure and the Department of Conservation.

When it came to divvying up money, TIA wanted a system 'free from political influence.'

Roberts said the current system where an independent panel including industry representatives recommended projects to the Minister for sign off worked well, but it was not yet clear what the new Government planned.

'It's probably to the advantage of ministers not to be the decision maker because they could be lobbied incessantly.'

Auckland City Council this year introduced a targeted rate on commercial accommodation to pay for tourism promotion, and Queenstown mayor Jim Boult has been a vocal advocate for a regional bed tax on the accommodation sector to help pay for much needed infrastructure.

But TIA said local government should be discouraged from introducing ad hoc taxes because a range of regional taxes would be confusing for visitors.

Environmental issues were also raised in the briefing and TIA said management of fresh water was inherently tied to the wellbeing of the tourism industry.

The Government needed to demonstrate a serious commitment to protecting the environment through measures such as establishing marine protected areas and making progress on Predator Free New Zealand.

Tourism directly employs 188,000 New Zealanders and TIA estimated it would require an extra 53,000 employees by 2021.

It said the Government and industry needed to work together to overcome acute labour shortages and to attract more Kiwis to work in tourism.

This required immigration rules that allowed employers to hire suitably qualified staff when they could not find New Zealanders to fill vacancies.

TIA chief executive Chris Roberts said they looked forward to discussing their priorities with Minister Davis, and to hearing about plans for his portfolio when he gave his first major speech at a tourism summit in Wellington on Tuesday.