As usual Newshub got their weekend story out of The Nation: Paula Bennett rejects calls for tourist tax (it wasn’t a story until Bennett said she didn’t support a tourist tax).
More than 18 million visitors come through the gates at Auckland Airport each year and Mayor Phil Goff says local government can’t cope with the tourism boom.
Instead, he says a tax could help.
“Ideally the Government could put on a bed tax across the country and a small arrival tax and share it amongst local Government – that would be most equitable,” he told Newshub.
But Ms Bennett has scuttled that, saying she’s not a fan. She says tourists already pay tax via GST, and she’s worried further taxes might deter travellers.
“We’ve got the best package in the world to deliver but we don’t want to be seen as a rip off,” she said.
Ms Bennett accepts there is pressure in some areas as a result of booming visitor numbers, but says it’s covered by the regional tourism fund, which has put forward $8.5 million to fund public toilets, car parking and freedom camping facilities.
And the story making has extended to other politicians.
But Green Party co-leader James Shaw disagreed.
“I don’t think New Zealand is going to be perceived as a rip off. It is an absolute premium destination, as you can tell from the visitor numbers,” he said.
Tourists already pay a border charge of between $22 and $26 and the Greens say that should be increased to help pay for infrastructure.
So there already is a form of a tourist tax, but the Greens support increasing it.
And NZ Herald joined in with Labour leader Andrew Little calls for tourist tax:
Labour leader Andrew Little wants a “tourist tax” charged at the border to help pay for tourism infrastructure, rejecting Tourism Minister Paula Bennett’s concerns it risked making New Zealand look like a “rip-off.”
Little said a “modest” levy would be ring-fenced to pass on to local councils to use on tourism-related infrastructure.
“We rapidly and urgently need new infrastructure and infrastructure upgrades targeted at tourists and the easiest and most efficient way to pay for it is just a border levy collected when you buy your ticket, and a mechanism to distribute it to local councils.”
Little said it would be simple to add the levy – since 2015 there has been a levy of about $22 to pay for border control added to the cost of a ticket. In its first five months, that had generated $27.72 million – well above the forecast income of $20.22 million.
That will be because of the boom in tourist numbers.
Tourists pay 15% GST on much of what the spend while in New Zealand. There is also a lot of tax generated in the tourism industry through employment (PAYE) and company tax.
And they also contribute to roading revenue through fuel tax.
While different opinions were extracted from politicians on this it is not likely to become an election issue if any tax was going to be an entry tax – not many international tourists vote.
But a ‘bed tax’ as suggested by Goff could be more contentious. It would be messy if it only applied to international visitors – would that be based on passports? Or country of residence?
It’s not surprising to see a mayor propose a Government imposed tax “and share it amongst local Government”, that would make rates rises a little less bad, but “that would be most equitable” is an interesting claim. Equitable for whom? The city where the biggest airport in the country is?
The administration (and cost of administration) of a bed tax could be an issue. There would be possibly substantial bureaucracy involved in collecting a bed tax and paying it out equitably to all the local bodies who want it.
Hotels and motels pay local body tax (called rates) as it is, why doesn’t Goff just increase the rates for hotels and motels and home stays?