Aviation, tourism and energy writer for the Business Herald

Tourism wants more of GST windfall

The surging China tourist market helped boost visitor spending to $14.5 billion last year.  Photo / Grant Bradley.
The surging China tourist market helped boost visitor spending to $14.5 billion last year. Photo / Grant Bradley.

The tourism industry is calling on the Government to reinvest some of "the massive tax windfall" it has received from the surge in overseas visitors during the past year.

The annual Tourism Satellite Account shows the Government's collection of GST from international visitors has increased to $1.1 billion, a 20.4 per cent increase on the previous year.

The data released today shows international tourism has pumped $14.5b.

Domestic tourism spending has also grown by 7.4 per cent to $20.2b in the year to March.

When GST paid by domestic travellers is included, the total GST take from annual tourism spending has risen to $2.8b.

Tourism Industry Aotearoa chief executive Chris Roberts said the figures debunked the myth that visitors were not paying their way.

"Those same visitors also generated other income for the Government, including the new border clearance levy, petrol tax, the income taxes paid by the 188,000 people directly employed in tourism, and the company taxes paid by the thousands of businesses servicing visitors.''

The biggest tourism business, Air New Zealand, paid the Government $460 million in taxes and dividends this year, Roberts said.

He acknowledged the government did invest to attract visitors to New Zealand, through Tourism New Zealand, and funded some of the facilities used by visitors, primarily through the Department of Conservation and the new $3m-a-year Tourism Facilities Fund.

"But no matter how you calculate it, the Government's income from international visitors is many, many times greater than the costs incurred in attracting and looking after them.

"Nobody is making more money from the tourism boom than Bill English and Treasury."
The Government needs to reinvest some of its windfall profit to ensure ongoing success, he said.

"With tourism growth set to continue, the Government needs to play its part in providing the infrastructure to support that growth. The private sector is doing its bit, with hundreds of millions of dollars being spent on upgraded and new accommodation, attractions and activities.

However, some regions with small populations, along with a few tourism hot-spots, face major challenges and capital constraints. They need more of a helping hand from Government, he said.

The $3m facilities fund was only just scratching the surface.

"It could be significantly expanded to deliver real long-term benefits for the regions of New Zealand and this country's overall economic prosperity. We need to invest now to ensure future success."

Outgoing Tourism New Zealand chief executive Kevin Bowler said one in 13 New Zealanders are now directly employed in the tourism industry and this would increase as visitor numbers continue to grow.

The outlook for this summer was strong, because of the number of Chinese wanting to travel and new air links to the United States.

"I think it's going to accelerate. I think we'll have our best ever year out of the States,'' said Bowler.

"The impact of tourism spend is far ranging, benefiting retail owners, supermarkets, petrol stations, restaurants and cafes in addition to accommodation and travel spend."

About 3.4 million visitors were putting pressure on infrastructure but improving returns on hotels would encourage more investment, he said.

Bowler finishes at Tourism New Zealand on Friday after seven years and has a new job as head of drinks company Frucor.

During his tenure visitor numbers increased 37 per cent and spending was up 41 per cent.

He said the most important single factor in boosting tourist numbers was the Middle Earth campaign around the Hobbit films.

"Extremely successful Middle Earth campaigns and a deep focus on digital media helped drive significant growth in visitor numbers."

- NZ Herald

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