Nicholas Jones is a New Zealand Herald political reporter.

Border levy nabs $2m in first month

January’s haul a fraction of $26.27m tipped over 6 months but tourism body unhappy.
Figures supplied to the  Herald  show that last month the border clearance levy generated $2.08 million, excluding GST. Photo / Brett Phibbs
Figures supplied to the Herald show that last month the border clearance levy generated $2.08 million, excluding GST. Photo / Brett Phibbs

A new border clearance levy has raked in more than $2 million in its first month - with that take set to rise dramatically.

The controversial levy was a surprise measure in the last Budget and kicked in at the start of the year.

People with a return ticket to or from New Zealand are now hit with a total charge of about $22 that is included in the price of their airfare.

Figures supplied to the Herald show that last month the border clearance levy generated $2.08 million, excluding GST.

Customs collected $1.142 million, and the Ministry for Primary Industries received $938,000.

The January collection is a fraction of the $26.27 million expected in the levy's first six months. About 85 per cent of passengers last month were exempt from the levy because of pre-bought tickets. That percentage will drop to zero by the end of the year.

The Tourism Industry Association's chief executive, Chris Roberts, said the industry saw the levy as unwelcome and unjustified.

Information on visitor arrivals to be released shortly would show a record January, Mr Roberts said.

"The Government is fortunate that it has been brought in at a time of very strong tourism growth, so the impact of the tax is somewhat hidden."

Although the industry had never claimed the levy would result in a fall in visitors, it believed the tax was reducing the extent of the growth.

"It is your family living in Australia who have the option of going to Bali, the Pacific Islands and New Zealand. For a family of four or five it is getting up towards another $100 cost on the New Zealand option," Mr Roberts said.

Government-commissioned research by the Sapere Group last year showed the levy could reduce the number of visitor arrivals by between 11,460 and 56,190 a year.

Based on the central estimate, the number of expected visitors would fall by 34,020 (1.4 per cent), the report found - with 77 per cent being Australians. That would reduce tourist spending by $56 million from a total forecast of $6.110 billion.

Treasury considered the report overstated the levy impact, a position also held by Customs.

Primary Industries Minister Nathan Guy said previously taxpayers had covered the cost of protecting the border from biosecurity and customs risks. "But we believe it's fairer for travellers who create the risk to pay for these services." Nicholas Jones

- NZ Herald

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