Government kills off ‘bed tax’ for struggling tourism hotspots

Thursday, 3 April 2025

Tourism Minister Louise Upston has ruled out a “bed tax”, cutting down a campaign by the Auckland and Queenstown mayors.

The dismissal of a bed tax, or a levy on tourist bed-nights, will disappoint Auckland mayor Wayne Brown and advocates including lobby group Local Government New Zealand, who say it is needed to better fund tourism infrastructure and services.

Upston had in January said she remained “open” to helping councils implement a so-called bed tax, though it was not an “immediate priority”.

But in response to The Post’s questions on Wednesday, she confirmed the policy would not be pursued.

“This term we've said we're not introducing any new taxes.

“As the Minister of Tourism and Hospitality, I have not asked for any work [on a bed tax]. My focus is getting more visitors into the country and getting more customers for our businesses.”

Upston became Tourism Minister in a January Cabinet reshuffle, taking the portfolio from Matt Doocey, who was demoted. Brown has previously complained that Doocey was working on a bed tax policy, but had managed to “stuff up” the idea.

The Post sought copies of any papers held by the Tourism Minister regarding the prospective policy under the Official Information Act.

Upston’s office confirmed there were five such documents, but refused to release the documents to protect the “confidentiality of advice tendered by ministers and officials”.

The title of the documents were similarly withheld except for one, prepared for a June meeting with “Auckland local government”. The last document was dated November 2024.

Upston said while she had not been “actively looking” at a bed tax, she was interested in the sector’s funding challenges.

“I want to understand how significant the funding challenges are, and whether they are of councils making.

“Those are the sort of conversations I’m having at the moment, is just listening to understand if there's a problem, the size of the problem and therefore, what the solutions might be so it's very early days.”

The denial of a bed tax comes after the Government declined to help keep the America’s Cup competition in Auckland, due to it requiring a $75 million or more contribution.

Brown had said a bed-night levy would have allowed Auckland to meet its share of the event’s costs. Auckland Minister Simeon Brown also said on Monday the Government was “not into just putting new taxes in place”.

Wayne Brown declined to comment on Wednesday. His spokesperson said a considered response was required and could not be given by deadline.

Auckland Council has also sought a bed tax in its pitch for a regional deal to the Government, saying it was the “best mechanism” to generate sustainable funding for the tourism and events sector “and will have major benefits for the nation”.

Local Government Minister Simon Watts said the Government would “pretty soon” determine which regions it would strike deals with under the regional deal policy.

Any initiatives in the deals would “need to be agreed between central Government and local government”.

“The officials are working through the proposals that we've received around the country. It [a bed tax] is an issue that has been noted, including by those down in Queenstown and also Auckland, historically.”

But it was “not something that we're currently working through”.

Local Government New Zealand President Sam Broughton, also the Selwyn mayor, said a bed tax “would make a significant difference for many councils, but it is only one tool”.

“Currently councils are disincentivised from investing in infrastructure and services for tourism, and this needs to change.

“We’re very keen to work with the Government on other ways to incentivise community investment.”

Queenstown mayor Glyn Lewers did not respond to a request for comment.