Opinion: Goff's bed tax plan has merit

Auckland Mayor Phil Goff has been accused of trying to fleece the golden goose with his proposal for a visitor levy on hotels and other accommodation.

The proposed levy will apply to Kiwi and overseas visitors and could raise between $20 million and $30 million a year.

The charge will replace ratepayer-funded spending to attract visitors and support major events.

The council cannot set a bed tax but Goff plans to achieve the same outcome through a targeted rate on all accommodation providers, which is expected to be passed on to guests through an additional charge on their bills.

It's one of three new ideas put up by Goff to raise extra funds and to shift the weight of responsibility from ratepayers to those who benefit from living and doing business in the city when it comes to coping with its rapid growth.

The other ideas are a regional petrol tax and a targeted rate for large development.

I think the plan has merit.

Other countries, including across Europe, Britain and the United States, already have bed taxes in place.

The idea has been criticised by the Tourism Industry Aotearoa, which says visitors are already contributing heavily to the economy.

However, while it's true that the financial benefits associated with tourism are felt widely in the economy, it's also true that some benefit more than others.

New Zealand is an attractive tourist destination and the cost of the levy, between $1.50 and $4 for a backpacker and $15 to $20 for a five-star hotel room, is unlikely, in my view, to put visitors off travelling to our shores.

Many councils across the country are struggling with growing infrastructure costs and spiralling debt levels. This ultimately impacts on ratepayers, many of whom are on fixed incomes.

It's good to see a council thinking outside the square to address this problem and it will be interesting to see if the plan gains traction.

Anything that can lessen that collective burden on ratepayers should be considered.