The International Visitor Levy - not what it says on the tin

Sunday, 4 January 2026

The permanent toilets at DOC's Kidds Bush campsite were closed for an upgrade in 2021. Four years on, portaloos continue to mar the view - a symptom of the cash-strapped department's $300m worth of deferred maintenance.

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The International Visitor Levy was introduced to help manage the impacts of ballooning tourist numbers. So why is it instead funding millions in marketing to lure even more international visitors, while DOC warns conservation is about to go backwards, and tourist towns can't afford to upgrade overflowing toilets? Nikki Macdonald investigates.

Wind around the shore of Lake Hāwea near Wānaka, dodging campervans and cows, and you come to what seems the perfect lakeside campground.

From the grassy clearing under the mountain beech trees, you can see the ever-changing waters - and eight HireKING portaloos in a row.

When the Kidds Bush campsite’s permanent toilets closed in 2021, because they were found to be non-compliant, the Department of Conservation (DOC) promised their $486,000 replacement would be built the following year.

But “other priority work prevented progress”. So for the past four years, DOC has instead paid $650 a week to truck sewerage out twice-weekly in summer.

And across the isthmus at Laka Wānaka, DOC’s Boundary Creek campsite has been “temporarily closed” for that same four years, also because of non-compliant toilets. The upgrades are among $300 million worth of maintenance the cash-strapped department has had to defer nationwide.

Over the Crown Range in tourism mecca Queenstown, the town’s sewerage system is so stuffed it’s literally overflowing into the Shotover River. And further north on the tourist trail, Tekapo has installed user-pays loos to help the region’s 5500 residents fund the $500,000 it costs annually to maintain its toilets.

So why is the International Visitor Levy (IVL) established to help fund exactly this kind of tourist infrastructure instead being diverted to pay for marketing to bring in more international tourists, and being used to swap out existing government funding, instead of adding to the pie?

DOC's Boundary Creek campsite on Lake Wānaka has been 'temporarily closed' for four years, because of non-compliant toilets.

“This is a cynical misuse of IVL funds for a purpose for which those funds were never intended,” says Griffith University professor of tourism, James Higham, of the marketing spend. “The IVL was introduced to manage high growth and increasing pressures on our infrastructure and natural assets, and now it’s being used to fuel further growth. It’s extraordinary.”

A bit of history

The idea of a green tax to ensure tourists help preserve the natural wonders they come to see has been around since at least the 2000s.

“There was a strong feeling that, for tourism to be sustainable, we needed to be investing much more in healthy nature,” says former Conservation Minister and IVL co-creator Eugenie Sage. So in 2019, the government passed a law to enable it.

“It was always intended to fund both infrastructure and conservation - nature being the essential infrastructure, but sewage systems, recreational walks, other activities also being a key part,” Sage says.

Tourism pressure at visitor icons like Milford Sound prompted the introduction of a visitor levy to help manage their impact and pay for tourism infrastructure. (File photo)

What it wasn’t intended to fund, she says, was marketing to bring in more tourists.

“It's gone back to this focus on, promote, promote, promote, bums on seats and extract as much as we can from nature, without caring about the yawning credibility gap,” Sage says.

The original 2018 IVL consultation document has 54 mentions of infrastructure, 35 mentions of conservation, and zero mentions of marketing or promotion.

The law says the levy’s purpose is to fund “conservation” and “infrastructure used for tourism”. But the drafters also threw in a catch-all, “other initiatives related to tourism”.

When consulting last year on the plan to increase the IVL from $35 to $100, the Ministry of Business, Innovation and Employment (MBIE) canvassed support for spending the tourism portion on marketing. Just 23% of respondents were in favour, while 53% disagreed.

“That wasn't the deal,” says Environmental Defence Society chairman, Gary Taylor. “The deal was that it would be used for tourism infrastructure, and there's a lot of that that needs improvement. To use it to try to increase tourism when your infrastructure is, in many respects, stuffed, is illogical.“

But scan MBIE’s list of funded IVL projects, and the largest single grant is $41.9m to “marketing New Zealand as a visitor destination”, followed by $40m for cycle trails.

Tourism Minister Louise Upston says “the IVL can be used for tourism marketing if Ministers decide that is a priority”. In 2025/26 alone $19.5m is tagged for international promotion.

“There’s a short term focus on getting visitor numbers up, an emphasis which in time will shift,” Upston says.

In a December 2024 letter, Finance Minister Nicola Willis told former tourism minister Matt Doocey “we need to ensure we give levy payers and the wider public clarity over how IVL revenue is spent”.

Yet we’re still telling visitors “the IVL is your contribution to maintaining the facilities and natural environment you will use and enjoy during your stay”.

Despite the IVL's tourism component being largely spent on marketing, we're still telling tourists it's being used for infrastructure and conservation.

Mat Woods, of regional tourism organisation Destination Queenstown, says tourists don’t mind paying on those terms.

“They're actually happy to pay the $100 at the border because they know it's helping with conservation or mixed use infrastructure. It'd be interesting to ask what they think if they were told it was being used for marketing.

“What it says on the tin is not exactly what we're using it for.”

Where is the IVL going?

Trying to find out exactly how the IVL is being spent is headache-inducing. A tangle of Treasury papers discuss fiscal headroom, appropriation shortfalls and hypothecation.

But DOC director-general, Penny Nelson, helpfully explained it to Parliament’s Environment Select Committee during scrutiny week in early December.

Of the $190m forecast revenue from the increased IVL (growing to $229m from next year), DOC gets $55m a year for new projects.

With more than 4000 native species threatened with extinction or at risk of becoming threatened, DOC boss Penny Nelson says conservation will go backwards if funding doesn’t increase.

Tourism gets $35m a year. In 2025/26, 80% of that goes to “increasing international demand”.

Any revenue beyond that $90m is split 50/50 between conservation and tourism, but provides no extra benefit to either. That’s because it simply replaces existing Crown money.

“It funds general conservation activities and it automatically results in a reduction in Crown funding,” Nelson explained. ”So it’s essentially a swap.”

So while additional revenue technically goes to conservation and tourism, as required by the law, in reality it frees up money for the Government to spend elsewhere. From 2024/25-2028/29, that amounts to an extra $785m for Crown coffers.

Mueller Hut at Mt Cook was last year so overwhelmed with visitors that DOC had to close it to day walkers (which visitors pay nothing for) while it organised a helicopter to empty the full toilets.

‘We will go backwards under existing baselines’

DOC plans to spend 60% of its new IVL funding on projects for nature, and 40% for visitors.

Back at Kidds Bush, at Lake Hāwea, DOC says it’s now planning a replacement toilet block. Not for this summer, though.

The conservation portion of the IVL has funded significant initiatives, from wilding pine removal to a Tongariro Alpine Crossing management plan, to a project considering the future of kakapo. But it could fund a whole lot more if it wasn’t now being swapped out for existing funding, says Gary Taylor, of the Environmental Defence Society.

“The pressures on the Department of Conservation right now are extreme, and unprecedented…The whole of the IVL should be directed to the two areas that it’s supposed to be directed to.”

Nelson told the Environment Committee the department is so stretched, they’re fighting to hold the line on conservation.

They’ve cut 264 jobs - 15% of their core workforce - to meet the Government’s savings target. And they’re facing surging visitor numbers, climate change pressures and a doubling of post-storm repair costs in the past five years.

“Major challenges threaten our ability to sustain this work, and we will go backwards under existing baselines,” Nelson said.

While modelling showed $2 billion a year is needed for nature to thrive, an extra $150m a year on top of the $365m in existing biodiversity spending “would ensure ecosystems and species don’t go backwards”, Nelson said.

“New Zealand’s future depends on valuing healthy nature. If we don’t invest in nature-based assets, the country will look vastly different in the next 20 to 50 years.”

The region that hosts half our international visitors, but hasn’t seen a cent of IVL infrastructure funding

Destination Queenstown boss Mat Woods is stuck in traffic. Again.

Despite major congestion problems, the Queenstown Lakes district has received no infrastructure funding from the IVL.

He’s heading to a meeting near the airport and is crawling at 7kph. After 17 minutes, he’s moved about 1km.

While New Zealand as a whole hasn’t yet regained its pre-Covid tourist numbers, the Queenstown region hit that milestone way back in 2023. For the past 12 months, they’ve grown another 10.6%.

That means congestion - on the roads, the sewerage system.

Beloved by tourists for its colourful lupins, dark skies and mountain, Tekapo’s sewerage system is designed for 3000 people a day, but having to cope with 10,000. (File photo)

As in tourist-tired Barcelona, the locals are getting tetchy, with a tourism approval rating of just 19. The visitors are also noticing.

“This will be my last time to Queenstown,” writes Sharyn from Australia, on a travel blog. She has been holidaying in New Zealand since 1986. “It’s disgusting, the traffic is the worst, and prices for things…I will be telling my friends to avoid you as well.”

But despite the fact about half of all international tourists visit Queenstown, the region hasn’t seen a cent of infrastructure funding from the IVL. (Upston says Queenstown will benefit from the IVL marketing spend, because it will bring in more tourists, and therefore more cash.)

The area’s congestion is partly due to a rapidly growing population, Woods concedes. But try driving to the airport at 10am, when residents have gone to work or school, but visitors have just checked out of their hotels, and the impact of tourism is inscribed in the endless tailbacks.

He’s not against the government funding tourism marketing. But it should come from Crown coffers, not tourist levies.

“We would like to see that money returned to its original purpose, which was conservation, and mixed-use infrastructure.”

But even then, that wouldn’t pay for the impact of the extra tourists the government wants, Woods says. He argues Queenstown needs a local bed tax on top to help fund facilities.

Mackenzie mayor Scott Aronsen is also driving, but pulls over to chat. The roads in his region are so jammed with unpredictable tourist traffic you can’t afford to be distracted at the wheel.

With travellers doing three-point turns on blind bends, and wandering into the middle of the state highway to take photos, he’s so worried about road safety he just bought a dash cam to gather evidence.

“The days of pussyfooting around and being nice are over, because, it’s a lot more serious than what people probably realise.”

Up to 700 cars a day visit Aoraki Mt Cook, with cars sometimes flanking the highway for 1.5km. The IVL is funding a paid parking trial there and at Punakaiki and Franz Josef to try to manage the mayhem. (File photo)

As mayor of one of the regions with the smallest population to tourist ratios, road safety is just one area he wants government help with. With just 5500 ratepayers and an annual bill of $500,000 just to clean toilets, the council has introduced user-pays loos at Tekapo and plans more for Pukaki.

Tekapo’s sewerage plant was built for 3000 people a day, but is having to cope with 10,000. And tiny Burkes Pass and Fairlie, on the highway from Queenstown to Christchurch, both need sewerage upgrades. Then there’s $700,000 to clear snow off the footpaths.

Their two freedom camping areas host 120-130 vans a night, and so much accommodation at Tekapo has been converted to Airbnbs that there’s no staff accommodation, so workers are are driving 43km every day from Fairlie to clean motels and units.

“We’re at capacity. For us to have more tourists, we need more infrastructure,” Aronsen says.

When the IVL increased to $100, he assumed they’d get a slice of that. Because if tourists have a bad experience and post it on social media, no amount of aspirational ads will undo that.

“Forty-two million going into marketing: No, no, no. Let's get our priorities realigned, and let's go to the likes of Queenstown, Central Otago, the Mackenzie that are really suffering. Because obviously Queenstown is just a right royal cluster in there.

DOC used $1.83m in IVL funding to come up with a sustainable management plan for the Tongariro Alpine Crossing.

“Let's talk to the regions, which are the jewels in New Zealand's tourism crown, and let's make sure that these regions are functioning as well as they possibly can.

“Because if they're not, then we've got a problem…If we're putting our district at risk because we've got a bad reputation, because we can't keep our toilets clean, then we need to realign our priorities, and that's what government needs to do.”

Mt Cook has had some IVL funding, with some conservation IVL funding going into pest control. This year, it’s also funding DOC’s trial of paid carparking in the mountain village.

Two West Coast tourism hotspots - Punakaiki and Franz Josef - are also part of that trial.

Taranaki Mountain Shuttles owner Rob Needs says Taranaki is a tourism backwater, with capacity to take five times as many visitors. (File photo)

Franz Josef Wilderness Tours director Dale Burrows says any money generated from car park fees should stay in the area.

And he doesn’t think the IVL should fund tourism marketing, while local facilities moulder.

“I think that’s wrong…Where we operate, down at Lake Mapourika, there’s still a long-drop toilet…I’ve got my staff down there filling the potholes where we come off the highway, because they’re so bad.”

The best tourism promotion, he argues, is giving visitors a better experience.

“They shouldn’t need to spend it on marketing, because by spending it on improved infrastructure and being able to cope with the tourists…people are going to go away with a better story.”

What about the North Island?

One of DOC’s earlier IVL-funded projects was a management plan for the infamously congested Tongariro Alpine Crossing.

Taranaki’s Pouakai Crossing has plenty of room for more tourists, says Needs.

Ruapehu Scenic Shuttles operator Colin Baker wasn’t a fan of the resulting plan, which includes a voluntary booking system that he says is “a complete waste of time” because no-one checks.

Even after the devastating Tongariro fire, his shuttle business is almost at capacity, so he doesn’t need more tourists. But even if he did, he wouldn’t support spending IVL money to get them.

“Spending on marketing when we haven’t got the infrastructure in place, doesn’t make any sense to me at all. That would be my biggest grumble about the International Visitor Levy is the waste of money, where it’s not being spent on facilities - basic infrastructure.”

But travel the Forgotten World Highway west to Taranaki and Rob Needs is feeling, well, a bit forgotten.

That morning, the Taranaki Mountain Shuttles owner drove a single walker to the Pouākai Crossing.

He’s the biggest shuttle operator in Taranaki, but in Tongariro, he’d be the smallest. The business is so marginal he has to keep a day job.

“Doing the Pouākai Crossing on a busy day in Taranaki would be maybe 50 or 60 people. Tongariro is 3000.

“Pretty much every day in summer, I leave home at six o’clock, run shuttles, drive home, jump out of my shuttle vehicle into my work vehicle. And then I finish work, go and pick up any people that need picking up, and then get home about six o’clock.

“So the commitment to tourism is a high personal time cost.”

With the infrastructure and accommodation of a small city, Needs reckons Taranaki could take 500% more tourists. But he doubts IVL spending on international tourism promotion will help.

“If it’s being spent on marketing to get more visitors to New Zealand, that’s probably going to benefit Tongariro, Hobbiton and Queenstown…Why would we want to send people to already busy places?”

Both Higham and Woods advocate a national tourism authority or commission to help set tourism infrastructure priorities.

At the moment, the IVL is subject to the decision making of the national government of the day, but the issues are felt acutely at local and regional levels,Higham says.

“It's like lots of kids and not many lollies in the lolly scramble. They're all squabbling for crumbs of funding through the IVL, and then the government comes along and says, ‘actually, for the next two or three years, we'll use it for marketing’.

“We actually need a framework for decision making around funding that's not political.

“I think ultimately, for the IVL to be successful, it's got to be focused on protecting nature as our key infrastructure for tourism…From a sustainable tourism point of view, it just seems blindingly obvious.”

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