Aucklanders risk rates rise if no bed levy to lure major events

Monday, 25 August 2025

Auckland missed out on Taylor Swift’s world tour. The city doesn’t want this to happen again.

If the Government continues its hard line on blocking Auckland Council from bringing in a bed levy to fund major events, Aucklanders’ rates could rise by 0.4%.

But the Prime Minister is refusing to budge saying the council has “plenty of money”.

“I’ve said up front, very clearly, that we’re not looking at a bed tax or a bed levy,” Christopher Luxon told The Post.

“I just reject the narrative that’s how it has to be done.”

The rates rise warning is contained in a proposal councillors are set to vote on this week which would see Auckland Council underwriting a $30m fund that would allow the city to bid for and secure major events with long lead times.

It says if no solution is found the city could lose SailGP, which has expressed interest in long-term agreements to secure commercial partnership.

The proposed fund will not exceed $10m a year and be reviewed annually by council.

But the funding pitch comes with a warning that if the underlying funding gap isn’t resolved through sustainable means, like a bed night levy, it will need to be paid for through targeted or general rates.

“In a worst-case-scenario approving the underwrite facility could lead to unavoidable rates rises of a further 0.4 per cent per annum,” the report says.

There are criteria events would need to meet, including a set amount of GDP generation, bed nights, return on investment and have a cost-benefit ratio of more than 1.15.

American country star Luke Combs played two sold out shows at Eden Park in January.

The fund would allow Auckland to bid for and agree to events that require six or more years’ lead time, like the FIFA Women’s World Cup, or events decided six months out from delivery that require a verbal commitment within a few weeks from first approach, for example US country singer Luke Combs’ concert at Eden Park.

Events like these spur wider economic implications, like private investment in tourism infrastructure, such as the development of high-end hotels. For example, the addition of 5000 hotel beds over the past five years was predicated on events like APEC, the America’s Cup, and SailGP, the proposal says.

Auckland risks missing out on high-value opportunities because TAU’s current level of funding doesn’t allow it to enter into major events commitments with multi-year lead times.

The marketing and funding for major events comes from $7m set aside from the City Centre Targeted Rate, mayoral office underspend and industry contributions. But the package is set to run out and there is an underlying funding gap, the proposal says.

SailGP has said it needs long-term commitments from Auckland for further regattas.

The proposal says a bed levy, or similar mechanism, to fund destination marketing and major events was an approach commonly used in international cities and the underlying principle is that those who benefit most from these activities, such as visitors and the tourism sector, should contribute directly to their funding rather than relying solely on general rates.

“The current funding model is unsustainable. Auckland requires a long-term, nationally supported solution to fund major events, destination marketing, and visitor attraction. As New Zealand’s primary gateway and economic hub, Auckland needs appropriate investment to maintain a strong regional economy and remain competitive in the global tourism market.”

Staff say the proposed $30m facility could be treated as a contingent liability, with the expectation that future funding sources, like a bed night visitor levy or other sustainable mechanism, would offset the commitment over time.

TAU’s $27 million destination marketing and major events budget was previously half covered by the Accommodation Provider Targeted Rate but this was suspended in 2020 due to Covid-19 border closures, resulting in reduced expenditure.

Reinstating this rate would require public consultation through an annual or Long-Term Plan.

Auckland mayor Wayne Brown and the city’s business leaders have been piling pressure on the Government to allow the city to charge a bed tax, arguing it’s vital to giving the city’s struggling economy a boost.

Brown wants the bed levy to be set at 2.5%, which would raise $27 million. He believes would be enough to attract the likes of a Taylor Swift concert or a State of Origin match.

Cities often need to pay upfront around $3m-$4m to bring in each major event.

Brown said the Government was cold on the idea because of the word “tax”.

“They [the Government] use the word tax so they can say no more taxes. It's just dumb, it's not a tax any more than it would be a targeted rate. The people who've asked for it are the industry it would be collected from.”

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